Canadian Outlook on the Competitiveness of Mexican MiningWed, 02/04/2015 - 18:06
The Mining Task Force of the Canadian Chamber of Commerce was empowered to become the voice of the Canadian mining industry in Mexico, began Wilson. Today the Task Force is a strong representative of Canada and has helped to build bridges between two countries with strong mining sectors, supportive government policies, transparent permitting processes, established legal systems, and similar geological conditions. The NAFTA agreement also helped to forge those ties. Wilson then approached the matters that attract Canadian investment to Mexico, including education, training, transfers of knowledge and technology, job creation, and respect for the environment. Another reason is the strength of the Toronto Stock Exchange, which is the global leader for mining investment and financing. Its influence in Mexico is also a strong anchor that brings Canadian companies here and offers them access to capital.
Tracking the history of Canadian investment in mining, recent years such as 2012 saw a restriction in financing for mining projects which led to a downturn. However, at the time, Mexico maintained a strong market share for mining investments in Latin America. In 2013, these restrictions grew worse and Mexico lost a great deal of market share. Investment was not as strong due to major uncertainty, according to Wilson, and the Mining Tax Force campaigned vigorously against the new royalty and tax passed by the government that year. She stated that Canadian companies in Mexico have never opposed paying a mining tax in the country but simply want the tax to be fair and for the money raised to be invested in the communities where mining companies are working. Now, the Canadian Chamber of Commerce is happy with the fact that the government has been listening to our advice as to where the money should be spent. Despite this downturn, over 200 companies are still on the TSX with a combined 500 projects in Mexico.
Moving on to another area, Wilson said that recent news have shown the correlation between security and costs. To tackle this, the Mining Task Force is working on a hands-on program with the government that should help to tackle this problem. Wilson was pleased at the government’s response and that a channel was created to discuss such issues. On the legal front, Wilson stated that some progress was made in fixing companies’ uncertainties for the rule of law and obstacles to transparency. As for social acceptance, she felt that any companies now understand the benefits that the mining investment can bring them. However, if Mexico wants to remain competitive as a mining investment destination, it must keep on tackling these issues, including, safety, the rule of law, and social acceptance.
To conclude, Wilson explained that Canada and Mexico are natural partners in mining and beyond, have mutual respect, and the right attitude to overcome the bad times that are still not over. In this way and with strong collaboration, Canada and Mexico can be instrumental in helping mining investment return to the heights it saw in 2010.