On April 20, 2022, a series of amendments to the Mining Law were published in the Official Gazette of the Federation that reserve the exploration, exploitation, and benefit of lithium to the State.
This amendment primarily (I) impedes the granting of lithium concessions in favor of individuals; (II) grants the right of exploration, exploitation, and benefit of lithium exclusively to the State; (III) classifies as reserve mining zones any in which lithium deposits are located, and (IV) orders the establishment of a decentralized public body in charge of the exploration, exploitation, and benefit of lithium.
Said reform, which its initiative was submitted by the Federal Executive Branch, is a result of the dismissal of the so called “Electric Counter-amendment”, which was also proposed by the Federal Executive Branch, and voted by the Chamber of Representatives on April 17, 2022.
Nonetheless, and given the fact that this amendment was made as a way to protest against the dismissal of the “Electric Counter-amendment”, it has raised several concerns between experts of the mining industry, such as:
- It may result in uncertainty to domestic and foreign investors.
- The establishment of a public body for the exploration, exploitation, and benefit of lithium, will generate an important expenditure of public funds.
- Deposits of lithium in Mexico are found in clay-state, which implies that its extraction is difficult and expensive.
- The risks of developing exploration and/or exploitation mining projects is very high and would be born entirely by the State.
- The classification of new mining reserve zones would limit the exploitation of other minerals, which its exploitation is not State-only.
Even though this amendment is of very recent creation, it will be interesting and of special relevance to observe the legal and operational strategies that both the State and individuals will implement as a result of this reform.
Should you have any questions or comments regarding the foregoing, please do not hesitate to call your usual contact in the firm.
Pablo Méndez Alvídrez / pablo.mendez@ecrubio.com