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St. Mary's Law Journal

Abstract

The object of this Article is to focus on the current legal provisions which regulate foreign investment in mining in Mexico. Legislation implemented in 1961 reduced foreign participation in mining to a minority position, and legislation implemented in 1975 further developed Mexican control over mining activities. The enactment of new foreign investment regulations in 1989, and new mining regulations in late 1990 allowed wider participation of foreigners in mining. Mining is one of the oldest economic activities in Mexico. Mercantilist economic ideas, in Europe in the seventeenth and eighteenth centuries, stressed accumulation of precious metals by states and saw American colonies primarily as providers of such metals. These ideas made mining the most important activity in New Spain. Foreign (non-Mexican) individuals and companies continue to be active in participating in mining activities in Mexico to this day.

This Article does not engage in a historical review of foreign investment, nor deal with corporate, tax, labor, or other issues which are common to doing business in Mexico in any field of activity. The Article also does not discuss mining legal issues which are common to Mexican and foreign investors or affect mining companies in general, regardless of the nationality of their shareholders. The limitations placed on foreign investors in mining were initially alleviated by the regulations of the Law to Promote Mexican Investment and to Regulate Foreign Investment (FIL) in mid-1989. The mining regulations in late 1990 further diminished these limitations. “Pyramiding” makes joint ventures easier to accomplish, and trusts, particularly the exploitation trust, allow a greater degree of direct participation by foreign investors in Mexican mining. Concerns of foreign investors regarding the validity and permanence of these changes are, while understandable, unfounded.

Publisher

St. Mary's University School of Law

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