Mexico

Mexico has a civil law legal system, with mining activities primarily governed by the Political Constitution of the United Mexican States, the Mining Law, the General Law of Ecological Balance and Environmental Protection, the National Waters Law, the Agrarian Law, and various regulations concerning environmental protection, land access, foreign investment, labor, and Indigenous and community rights.

Article 27 of the Mexican Constitution establishes that all minerals and substances located in the subsoil are the property of the nation. Consequently, private parties may only explore and exploit mineral resources through rights granted by the Federal Government under the applicable legal framework.

Mining remains one of Mexico’s most important economic sectors. According to CAMIMEX’s 2025 Annual Report, the industry and its value chain contribute approximately 4.7% of GDP and 8.7% of industrial GDP, generate more than 416,000 direct jobs and 2.6 million indirect jobs, and maintain productive links with 192 economic sectors.

The principal legislation governing the sector is the Mining Law, which underwent substantial amendment in 2023. The reform strengthened environmental protection, Indigenous consultation, water management and governmental oversight, while replacing the first-in-time application system with public bidding procedures for the granting of new concessions.

Mining projects are also subject to environmental regulation administered by SEMARNAT, water regulation administered by CONAGUA and land access arrangements involving private, communal and agrarian landowners.

The sector is increasingly influenced by sustainability considerations, ESG standards, critical mineral supply chains and North American economic integration.

Mineral resources in Mexico are owned by the nation pursuant to Article 27 of the Political Constitution of the United Mexican States. Accordingly, ownership of surface land does not confer ownership of the minerals located in the subsoil, regardless of whether the land is privately owned, communal (ejido) land, agrarian land or government-owned property.

The right to explore and exploit mineral resources derives from mining concessions granted by the Federal Government under the Mining Law. Concession holders do not acquire ownership of the mineral deposit itself but are granted the exclusive right to explore and exploit the minerals covered by the concession, subject to compliance with applicable legal and regulatory requirements.

The mining sector is primarily regulated by the Ministry of Economy, which administers mining concessions, while environmental, water, labor and other sector-specific matters are regulated by the corresponding federal authorities, including the Ministry of Environment and Natural Resources (SEMARNAT) and the National Water Commission (CONAGUA).

The 2023 amendments to the Mining Law reinforced the state’s role in the administration and oversight of mineral resources, including the introduction of public bidding procedures for the granting of new mining concessions and enhanced environmental and social obligations for concession holders.

Mining concessions grant the exclusive right to exploit the mineral resources covered by the concession area; however, they do not confer ownership, possession or any other rights over the surface land where mining activities are to be conducted.

However, mining concession holders may acquire surface rights through voluntary agreements with the surface owner or possessor, including lease agreements, temporary occupation agreements, easements, purchase agreements or other contractual arrangements. Where access cannot be obtained through negotiation, concession holders may request temporary occupation, easements or, in exceptional cases, expropriation.

Surface rights are generally acquired through direct negotiation with the landowner or lawful possessor. If the parties fail to reach an agreement, the concession holder may apply to the Ministry of Economy, through the General Directorate of Mines, to initiate the corresponding proceedings for temporary occupation, easements or expropriation, subject to the payment of compensation and compliance with applicable legal requirements.

Surface owners or possessors may oppose the requested use and participate in the relevant proceedings.

Under Article 27 of the Political Constitution of the United Mexican States, all mineral resources located in the subsoil are the property of the nation. Private parties may only explore and exploit such resources through mining concessions granted by the Federal Government through the Ministry of Economy, in accordance with the Mining Law and its regulations.

Mining rights derive from an administrative act issued by the competent federal authority. Following the 2023 amendments to the Mining Law, mining concessions may only be granted through a public bidding process conducted by the Ministry of Economy.

Mining concessions grant the exclusive right to exploit the minerals covered by the concession area and are generally granted for a term of 30 years, renewable once for an additional 25-year period, subject to compliance with applicable legal requirements.

To maintain a concession in good standing, concession holders must comply with the obligations established in the Mining Law, including reporting requirements, payment of mining duties and compliance with applicable environmental, water and other regulatory obligations.

Mining concessions may be assigned, transferred or encumbered, provided that the corresponding transaction is recorded with the Public Mining Registry.

In addition to federal mining concessions, mining projects typically require permits and authorizations from federal, state and municipal authorities relating to environmental matters, land use, construction, water rights and other operational aspects of the project.

In practice, mining companies operating in Mexico generally classify and report mineral resources and mineral reserves in accordance with internationally recognized standards applicable to the relevant stock exchange or financing market. These commonly include the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards, National Instrument 43-101 (NI 43-101), the Australasian JORC Code and, in certain cases, the SEC mining disclosure rules applicable in the United States.

Mining activities in Mexico are primarily regulated by the General Law of Ecological Balance and Environmental Protection (LGEEPA), its implementing regulations, the General Law for the Prevention and Integral Management of Waste, the National Waters Law and the General Law on Climate Change.

The principal environmental authority is the Ministry of Environment and Natural Resources (SEMARNAT), while the Federal Environmental Protection Agency (PROFEPA) is responsible for environmental enforcement and compliance.

Mining projects generally require an Environmental Impact Authorization (Manifestación de Impacto Ambiental or MIA) from SEMARNAT before construction and operation may commence. Depending on the characteristics of the project, additional permits may be required, including land-use change authorizations for forested areas, water concessions and discharge permits issued by the National Water Commission (CONAGUA), and permits relating to hazardous waste management.

Certain areas are subject to special environmental protection, including Natural Protected Areas (Áreas Naturales Protegidas), where mining activities may be restricted or prohibited depending on the applicable management program and zoning regulations.

Environmental permitting has become increasingly relevant following the 2023 amendments to the Mining Law, which strengthened the environmental obligations applicable to mining concession holders and reinforced the role of environmental considerations in the development of mining projects.

Community relations have become an increasingly important component of mining project development in Mexico and are supported by constitutional protections, international treaties and specific provisions of the Mining Law. The Mexican Constitution recognizes the rights of Indigenous Peoples, while Mexico is also a party to ILO Convention No. 169, which establishes the right of Indigenous communities to be consulted regarding measures that may directly affect them.

The 2023 amendments to the Mining Law strengthened these protections by requiring a prior, free, informed, culturally appropriate and good-faith consultation process with Indigenous and Afro-Mexican peoples or communities located within the area of a proposed mining concession. The consultation process is conducted by the competent governmental authorities and must take place before the granting of the concession.

In addition, the Mining Law provides that, where Indigenous or Afro-Mexican communities are affected, the concession holder must enter into the corresponding land access agreements and, under certain circumstances, provide economic benefits to the affected communities, including a consideration equivalent to at least 5% of the profits derived from the mining activity.

As a result, community engagement has become a critical component of project development and risk management. In practice, mining companies increasingly implement community development, stakeholder engagement and sustainability programs aimed at fostering long-term relationships with local communities and securing a social licence to operate.

The practical implementation of these consultation requirements remains one of the most closely monitored aspects of the 2023 reform and is expected to be further clarified through future regulations and administrative practice.

In Mexico, ESG-related obligations arise from a combination of the Mining Law, environmental legislation, labor regulations and corporate governance requirements.

The principal legal framework includes the Mining Law, the General Law of Ecological Balance and Environmental Protection, the Federal Environmental Liability Law, the National Waters Law and applicable health and safety regulations.

The 2023 amendments to the Mining Law significantly strengthened ESG considerations by enhancing environmental obligations, introducing consultation requirements for Indigenous and Afro-Mexican communities and reinforcing sustainable water management principles.

In addition to legal requirements, many mining companies operating in Mexico voluntarily adopt internationally recognized standards, including Towards Sustainable Mining (TSM), the Global Reporting Initiative (GRI) Standards and the Sustainability Accounting Standards Board (SASB) framework.

As a result, ESG considerations have become increasingly important in permitting, financing and community engagement. A notable example is Agnico Eagle’s Pinos Altos operation in Chihuahua, which renewed its Sustainability Committee in 2024 to promote participatory governance, dialogue and collaboration between local communities and the company as part of its long-term sustainability strategy.

Illegal mining is not generally regarded as one of the principal challenges facing Mexico’s formal mining sector. Nevertheless, unauthorized extraction activities have been reported in certain regions of the country and may involve environmental damage, tax evasion, safety risks and conflicts over land and natural resources.

In response, the Mexican government has strengthened oversight of mining activities through regulatory reforms, environmental enforcement and coordination among federal authorities, including the Ministry of Economy, the Federal Environmental Protection Agency (PROFEPA) and public security agencies. Mining activities conducted without the required concessions, permits or environmental authorizations may be subject to administrative, civil and criminal sanctions.

Mining companies typically address these risks through compliance programs, community engagement initiatives, cooperation with governmental authorities and security measures designed to protect concession areas and maintain lawful operations.

Mexico has adopted various measures to address climate change and promote sustainable development, including the General Law on Climate Change and its commitments under the Paris Agreement.

The 2023 amendments to the Mining Law strengthened environmental requirements applicable to mining activities, including mandatory mine restoration, closure and post-closure programs approved by SEMARNAT. The reforms also reinforced protections relating to water resources, tailings facilities and environmentally sensitive areas.

Water management has become a key issue for the mining sector. Mining companies must comply with water concession requirements administered by CONAGUA and increasingly focus on water efficiency and sustainable resource management.

In addition to regulatory obligations, mining companies continue to adopt sustainability and ESG initiatives aimed at reducing emissions, improving energy efficiency and minimizing environmental impacts.

Critical minerals are becoming increasingly important in Mexico due to their role in the energy transition and North American supply chains. Although Mexico has not adopted a formal legal list of critical minerals, resources such as copper, silver, zinc, fluorite and lithium are widely regarded as strategic.

Lithium is subject to a special legal regime. Since 2022, lithium-related activities have been reserved to the Mexican State and are administered through Litio para México (LitioMx).

The growing demand for critical minerals, together with the 2026 USMCA review and the Joint Action Plan on Critical Minerals announced by Mexico and the United States in March 2026, is expected to further strengthen the strategic importance of Mexico’s mining sector.

Mining companies in Mexico are subject to the general tax regime, including corporate income tax at a 30% rate and value added tax, where applicable. In addition, mining concession holders must pay federal mining duties under the Federal Duties Law.

Mining concession holders are required to pay semi-annual mining duties calculated primarily based on the size of the concession area and the age of the concession. These duties are not production-based.

In addition, concession holders are subject to a Special Mining Duty at a rate of 8.5% on a tax base determined from mining income after certain authorized deductions, as well as an Extraordinary Mining Duty on revenues derived from the sale of gold, silver and platinum, at the rate established under the Federal Duties Law.

Mexico generally does not distinguish between national and foreign investors for the purposes of mining taxation, although non-residents may be subject to withholding taxes and specific rules under the Income Tax Law. Mexico has entered into an extensive network of double taxation treaties that may affect the taxation of foreign investors.

With respect to mining tax incentives, exploration and development expenditures in mining projects may be tax deductible in some particular cases, helping to reduce the tax burden for mining companies.

Mexico has signed double taxation treaties with several countries, which can help investors avoid paying taxes on the same income in two different jurisdictions.

The transfer of mining-related assets, including mining concessions, may give rise to Mexican income tax on any resulting capital gain. The applicable tax treatment depends on the nature of the asset transferred, the tax residence of the seller and the structure of the transaction.

Foreign investors may be entitled to treaty protection under an applicable double taxation treaty. Any transfer of a mining concession must also comply with the Mining Law and be recorded with the Public Mining Registry.

Mexico remains an attractive mining jurisdiction due to its significant geological potential, long mining tradition, skilled workforce and proximity to North American markets. Mexico ranks among the world’s leading producers of several minerals and is the largest producer of silver globally.

According to CAMIMEX, investment in the Mexican mining sector reached approximately USD 5.06 billion in 2024. The industry generated more than 416,000 direct jobs and continues to benefit from a well-developed network of suppliers, contractors and supporting industries.

In addition to the country’s mineral wealth, investors are increasingly focused on regulatory certainty, ESG performance, community relations, water availability and permitting timelines, all of which have become critical factors in project development and financing decisions.

Mining concessions may only be granted to Mexican nationals and Mexican entities. Foreign investors may participate through Mexican companies, as there are generally no foreign ownership restrictions in the mining sector. However, lithium-related activities are reserved to the Mexican State through Litio para México (LitioMx).

Mexico is party to several international treaties that protect foreign investment, including the USMCA, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and numerous bilateral investment treaties. These agreements generally provide protections relating to non-discrimination, expropriation, fair and equitable treatment and dispute resolution mechanisms. The upcoming 2026 review of the USMCA is expected to have particular relevance for the mining sector given the increasing strategic importance of critical minerals and North American supply chains.

Mining projects in Mexico are commonly financed through equity offerings, bank debt, project finance, joint ventures, royalty arrangements and streaming agreements. The financing structure generally depends on the stage of development, capital requirements and risk profile of the project.

Canadian capital markets continue to play a significant role in financing mining projects in Mexico.

Alternative financing mechanisms, including royalties and metal streaming transactions, have become increasingly common as companies seek flexible sources of capital while limiting dilution and financing risk.

Mining concessions and other mining-related assets may be used as collateral in financing transactions. Security may be granted over mining concessions, shares, equipment, receivables and other project assets.

Security interests affecting mining concessions must comply with the Mining Law and be recorded with the Public Mining Registry to be enforceable against third parties. Depending on the asset involved, additional registrations may be required with the applicable public registry.

Information relating to mining concessions is publicly available through the Public Mining Registry maintained by the Ministry of Economy (https://tarjetarpm.economia.gob.mx/tarjeta.mineria).  In addition, the Mexican Geological Service (SGM) provides geological, geophysical and mining information, including maps, technical studies and mineral resource data. Environmental information may also be available through SEMARNAT, while water concession information is administered by CONAGUA.

Mining activities in Mexico are typically conducted through Mexican corporations (SA de CV) or limited liability companies (S. de RL de CV). International mining groups generally operate through Mexican subsidiaries owned by foreign holding companies. Joint ventures, option agreements, earn-in arrangements, royalty agreements and streaming structures are also commonly used in exploration and development projects.