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Bridging the Gap Between Canada and Mexico

Sean Emmond - Export Development Canada (EDC)
Regional Manager for Mexico

STORY INLINE POST

Wed, 10/18/2017 - 17:40

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Q: In 2015, Mexico was the fifth-largest recipient of Canadian capital in the world. How did it perform in 2016?

A: Mexico still remains among the top destinations for Canadian capital in the mining sector, and the position is strengthening. The mineral resources in the country are so strong that the jurisdiction will always be on the radar for mineral explorers and developers.

Our role is to help facilitate business between the two countries, and mining is an important sector. On the one hand, EDC can offer loans in the same way that commercial banks do. On the other hand, we also have a range of insurance products, which include risk mitigation solutions for companies looking to make investments in foreign jurisdictions. For example, if a Canadian supplier sells a product to a Mexican company, it will often look to insure the receivables generated by that sale. We can provide that.

Q: What is EDC’s main focus within the mining sector?

A: We want to connect Mexican miners with Canadian suppliers, so our efforts are focused on first establishing financial relationships with Mexican miners. On the basis of that relationship, we learn about the investment plans of each particular project and then connect them with the right Canadian supplier that can add value to the mining operation. We are constantly striving to identify innovative and cost-efficient technology coming out of Canada that can improve the efficiency of Mexican mining projects. Many small and medium-sized mining companies in Mexico often lack access to the products that can improve the efficiency of their operations. In some cases, these are family-run operations, and EDC can assist them to pinpoint where their operations can be improved and then put them in touch with the suppliers that can make a real difference to efficiency and profit margins.

Q: How are Canadian businesses with investments in Mexico affected by geopolitical instability?

A: For Canadian companies either already in Mexico or looking to invest in the country, it is business as usual. We believe that Canada and Mexico have a mutually beneficial trade relationship, and that will continue regardless of external factors.

The initial boom started around 10 years ago when a swathe of Canadian junior mining companies started developing projects in Mexico. Every year there is a better understanding in Mexico of Canada, and vice versa, both at the government and commercial levels. We aim to deepen that relationship by providing a platform for B2B discussions between Mexico and Canada.

Q: How do you assess the working environment for greenfield exploration in Mexico?

A: The sector has reached an interesting crossroads, and the next few years will be interesting. Commodity prices are on the rise again, and there is consequently a renewed interest in Mexico and investing in exploration projects in the country. The Energy Reform also represents a significant opportunity to lower overall power costs of mining operations. Endeavour Silver is looking at the possibility of powering one of its mines using only solar energy, and we are excited about this prospect and would be willing to help finance similar initiatives. If the weakening of the peso against the US dollar is added into the equation, it is a good time to be a mineral explorer in the country.

Q: What are the main plans EDC Mexico has set out for the mining sector in the next five years?

A: If the recovery in metals prices is sustained and consistent, we expect to see significant new investment in the sector in Mexico, and we would like to play a role in financing those investments. We want to increase the number of projects that we work on and the level of financing that we provide, but any project that we finance has to have Canadian flavor, either in the form of Canadian capital or a critical mass of Canadian supply.

 

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