Claim Staking and Mineral Tenure
In 1992, a new Mining Law was enacted and has been amended from time to time since then. In general, and for North American companies in particular, Mexican law permits direct or indirect 100% foreign ownership of exploration and mining properties. For practical purposes, most foreign companies establish Mexican subsidiaries. Mining companies are subject to the normal corporate income tax rate of 28%. There are no government royalties.
In December 2005, amendments to the mining law eliminated the distinction between "exploration" and "exploitation" concessions. Currently, the mining act and regulations provide solely for mining concessions (Concesiones Mineras), which are issued for a term of fifty years, renewable for an additional term of fifty years.
Owners of mining concessions are obliged to:
- Execute work under the terms and conditions established in the Mining Law;
- Pay fees to the Secretaria de Economia on a semi-annual basis;
- Locate on the ground a starting point (mojonera) for the location of the concession, and maintain the mojonera in good condition;
- Begin work on the concession within 90 days of receiving the Mining Title;
- File Annual Reports describing the Work completed and the amount spent doing the Reported Work*
- The Direccion General de Minas has the right to Audit the receipts and verify that Reported Work was completed in the field;
- Failure to comply with the Obligations or assist the DGM with an Audit will result in cancellation of the Mining Concession.
* Despite the fact that there is now only one type of concession, the annual Work Requirements are still calculated based on the concession's status prior to the abandonment of the two-type system and the calculations are complicated. Unused work/expenditure credits may be transferred to adjacent concessions and/or carried forward for use in the future.