Baja California Working to Attract Miners

Q: What is your administration doing to attract investment and support mining operators and explorers in Baja California?

A: During the State Mining Council general meeting guidelines for a collaboration agreement between the federal and state governments were established, which will provide credit designed to boost small and mediumsized enterprises working in the mining industry. There are still a few legal issues to iron out but we expect the agreement to be signed by August 2016, and it will then offer vital support to small mining producers, enable them to increase production levels, and eventually help them become large-scale mineral producers. For example, there is a company called La Ciénega in El Rosario that is producing natural high-quality quartz, which is 98 percent purified, and exporting it to the US. However, it is currently only producing on a small scale despite the high demand, and so this company is one we plan to offer credit so it can construct a larger manufacturing plant that could triple or even quadruple production levels.

We also provide economic support for geological prospection and research projects, as well as technical assistance and training programs. These are the three areas into which we channel the majority of our efforts. Support for geological prospection is equally as vital as financial aid because often those who find mineral alterations lack the technical expertise to truly understand the potential of their discovery. Therefore, we send a team of geologists to that location to carry out tests and assess whether or not further exploration is needed. This plays a big role in boosting development in the state.

Q: What are the biggest mining operations in the state today?

A: The largest producer of metallic minerals in Baja California is Minera Frisco’s San Felipe mine, which has a total production of 40,000 tons of gold and silver ore per day, while there are also a number of small-scale gold producers throughout the state. Regarding nonmetallic minerals, there is a mine to the south of San Felipe which is producing Pumicite, a volcanic rock used in the fabrication of heat-resistant bricks and cement. On the Gulf of California side of the peninsula, as well as on the Pacific coast, there are also two salt processing plants, while toward the southern point of the state there is a barite plant. This facility was exporting barite to the west but it has now been temporarily shut down due to the current low market price for this mineral. Finally there is a company working in the state that is dedicated to producing dimensional rocks, specifically high-quality onyx for export to China.

Q: What importance do Public Private Partnerships (PPPs) have for the mining industry in Baja California?

A: In the state government there are currently no partnerships in mining but we have the responsibility to provide technical support to all companies that want to start mining operations in Baja California. We can say that Minera Frisco received support from us when it began its operations at the San Felipe site. The El Arco project is on standby at the moment, which means that as soon as Grupo México decides to reinitiate operation of the project we will begin working together closely boost the project’s development. The support we provide to the private sector is indirect, meaning that we give it all the backing we can without any formal agreement or partnership. We have found this to be the most effective method of working with the private sector.

Q: Which mines are currently in the construction phase in Baja California that will soon be operational?

A: The majority of developing mines in the state are focused on the recuperation of gold-bearing minerals. However, Grupo México also has a large project in the Ensenada municipality called El Arco, which has been in the development phase for more than 38 years and has the potential to produce several million tons of copper and gold ore. However, the investment needed to move this project forward is around MX$3 billion so the company is waiting for the copper price to recover before starting production, and this could take up to three years. Moreover, we are currently promoting an extremely important mining district specifically designed for gold bearing in El Alamo, which is located 90km to the east of Ensenada. It is a unique geographic location with high concentrations of high-grade gold deposits, and while the project is still in the exploration phase it is an interesting potential destination for investment. Regarding exploration, there is a Chinese company working near the western town of El Rosario that is finding high quantities of high-grade copper reserves, and this is something we are keeping a close eye on.

Q: What are the primary hopes you have for the development of the mining sector in Baja California over the next 12-18 months?

A: First and foremost we are focused on promoting and developing the El Alamo project, which already has at least two interested investors from the US. Negotiations with these businesses are progressing well. They are extremely impressed with the on-site facilities and the geological potential of the location, and they are currently performing the necessary financial analyses in order to move on to the next step. We expect at least one of these prospects to come on board during our administration, and that is one of the biggest goals we are working toward.