In-Country Mineral Testing Saves Crucial Time

Q: How do you view the landscape of the Mexican mining industry at the moment?

A: Mining operations are becoming more and more expensive in Mexico because of the weakness of the peso against the US dollar and the added tax pressure is negatively impacting the budget of local mining companies. This is affecting the entire value chain but especially companies working in exploration. Junior exploration companies practically stopped operating in Mexico in the past couple of years. This is concerning because exploration is the future of the industry so it must be nurtured

Despite this trend, we are still seeing a number of new projects and developments springing up, which is an encouraging sign. Several of the major miners in Mexico picked up the slack left by juniors and have begun aggressive exploration projects. It is impossible to predict how the market will perform in the future, because Indian gold demand and Chinese iron-ore demand are extremely volatile. But we have to make the most of the available opportunities.

Q: What role does the mining industry play in terms of SGS’s overall strategy in Mexico?

A: The minerals sector has always been a vital component of our operations in Mexico and it is becoming more important every year. It is now as big as the oil and gas and automotive business for us. We are working on important operations in Guerrero and Guanajuato and have some important opportunities in northwestern Mexico in onsite labs.

On the commercial geochemical analysis side, we are proud to be the primary laboratory for some of the most important mining exploration companies active in the country. We can provide a whole range of services, from certification to planning and construction but our expertise in geochemical analysis and metallurgical services is the most popular. We operate onsite laboratories and provide a full range of analytical services as well as metallurgical testing. In fact, we operate the country’s biggest and most complete commercial laboratory in Durango. We test locally, which differentiates us considering that most other commercial laboratories have their samples sent abroad to Canada or the US for final analysis.

We also work with the most important nonferrous, ferrous, coal and coke and other commodities trading companies, as we have well-established operations in Mexico’s biggest ports like Manzanillo, Guaymas and Lazaro Cardenas. We carry out inspections, supervisions on sampling, indirect analysis via XRF, radioactivity testing and other physical determinations to help mining companies prepare for the commercialization of their products.

Q: What are the main challenges that operators in Mexico face when commercializing their product?

A: The determining factor is, and always will be, the metal prices. Any commercial transaction is based on international commodity prices so that will have a huge impact on the profitability of a mining or trading company’s business. Of course, SGS has no control over the international markets but there are other aspects, such as logistics and quality, that we can help our clients to improve. We check the weight, quality and quantity of mineral for producers prior to the product leaving the port, enabling them to acquire warranties and so improving and streamlining the trading side of their business.