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News Article

2020: A Year Full of Challenges for the Mining Sector

By Paloma Duran | Wed, 02/10/2021 - 12:09

You can watch the video of this panel here.

Tatiana Clouthier Carrillo, Mexico’s Minister of Economy, welcomed nearly 700 people to Mexico Mining Forum 2021 on Wednesday, Feb. 10, hosted by Mexico Business News. She highlighted the importance of the Mexican mining industry, which currently represents close to 3.2 percent of Mexico’s GDP. In 2019, the country generated 379,000 direct jobs, benefitting miners and contributing to their family’s earnings.

Following Clouthier, Esther Arzate, Coordinator of Mexico Minero, introduced the panel “2021: A Year of Rebirth for Mexico's Mining Industry?” focused on the main challenges the industry faced in 2020 and the strategies that institutions implemented to address them.

“The most important thing in 2020 was the Senate’s initiative to nationalize lithium. Should this continue, it could have negative effects on mining, since the bill lacks reliable information,” said Armando Alatorre, President of Colegio de Ingenieros de Minas, Metalurgistas y Geólogos de México (CIMMGM). Alatorre said there are many misconceptions regarding lithium and its benefits for Mexico, which is why CIMMGM has provided an extensive analysis detailing the most important points of the bill initiative and those that lacked valid information. Recently, Alatorre also shared with MBN new about AIMMGM’s, own forum held on Nov. 11 titled “The Truth About Lithium in Mexico,” where a panel of mining experts shared their points of view on the matter and said that despite lithium’s global importance, Mexico’s geological possibilities in this area are, at best, limited.

During today’s forum, Armando Ortega, President of the Mining Task Force at CANCHAM, explained that the 2012 Labor Reform was significant in Mexico, since it consolidates freedom of association. Ortega also addressed the dangers that exist in the rapid mechanisms regarding labor conflict resolution that Mexico committed to during USMCA negotiations. “If companies breach any labor rights, this will have an impact on trade. The affected country will be entitled to impose custom sanctions, so certain minerals and byproducts cannot be exported.” One of the upcoming challenges for the sector are that, due to political reasons, some members of the mining industry will be accused of violating labor rights. Ortega recommends focusing on what companies and the sector can control, which is to have an impeccable control over labor rights, as well as open and clear communication with labor unions. In a recent interview with MBN, Ortega said USMCA also represents a chance for Mexico to strengthen its position in the metals value chain. Ortega explained that even if mining is not expressly included in the agreement, the industry is at the base of the economy and anything that promotes regional trade will result in a boost for mining.

“Adapting to a new reality in 2020 was a major challenge. We need to adapt to new technologies and make good use of them,” said Doris Vega, Vice President of Women in Mining Mexico (WIM). Vega explained that WIM has sought to adapt and work with new technologies to have greater contact with people and the media, as well as to implement new strategies to make women visible within the sector. WIM has also shared its expertise through webinars to train women. “Mining offers many opportunities for women and we must take advantage of them,” she said. The organization believes that having women in mining has contributed to changing the image of the sector by highlighting their importance for companies and operations.

For Fernando Alanis, President of CAMIMEX, the mining industry shutdown and its classification as a non-essential activity was the biggest challenge in 2020. CAMIMEX, as a representative of the mining sector, managed to get authorities to recognize the industry’s importance for Mexico’s economic development. Nevertheless, the two-month suspension affected the sector and the communities that depended on it. As a result, CAMIMEX elaborated a protocol along with the government, which forced the sector to reinvent itself and adapt to new challenges. “Today, we have seen that these protocols have been effective. Moreover, our priority during the COVID-19 pandemic has been the health of our workers and maintaining our employees,” Alanis said.

Last year, CAMIMEX released the 2020 edition of its yearly report, emphasizing the mining industry’s commitment to the environment, society and communities. “It is of the utmost importance to highlight the true nature of the modern and professional mining industry that operates in Mexico. Mining is responsible and respectful of the environment. It is committed to the economic development of communities, regions and states where it operates. Mining develops supply chains and provides good jobs, access to education, health and basic services. It is an industry that ultimately boosts the quality of life of the inhabitants of our host communities,” Alanís said.

Paola Cazares, Health, Safety and Environment (HSE) Manager Mexico of Agnico Eagle, said the company has focused on the implementation and development of safety protocols to help employees to feel safe at work. The company has provided food, health and safety supplies in communities nearby. “The company’s sustainability operations have continued and Agnico Eagle believes the implementation of ESG practices will be fundamental in the recovery of the sector,” she said. Back in 2020, Luis Felipe Medina, Director General of Agnico Eagle Mexico, told MBN that Pinos Altos had won an award for excellence in environmental restoration from the Mining Association of Canada, which is the first project in Mexico to receive this award.

Alanis concluded the panel by saying that the challenges for 2021 will be COVID-19, the misconceptions of the mining sector that do not allow the population to see the true image and positive impact of the sector, as well as new legislative initiatives that directly or indirectly impact the sector and its position as one of the pillars of the country's economic recovery.

 

Paloma Duran Paloma Duran Junior Journalist and Industry Analyst