Creating Synergies Improves Safety, Market Conditions: Sandvik

Q: How have recent trade dynamics impacted Sandvik Ground Support’s operations in Mexico? 

A: Our ability to respond quickly to orders significantly aids our operations. All steel employed in our manufacturing for ground support products is 100% Mexican, sourced from domestic suppliers such as ArcelorMittal, Ternium, and Deacero.

However, current tariff regulations present a challenge. Some competitors exploit legislative loopholes, importing materials from Peru and Chile without paying the required duties. This involves Asian steel, transformed in Peru and Chile, then brought into Mexico tariff-free. This practice negatively impacts our business with several major clients, as these competitors gain an unfair advantage. 

Q: How has the company engaged with relevant actors to counter the negative impacts of unfair competition? 

A: We have engaged with certain suppliers to encourage them to raise concerns with CANACERO and the Ministry of Economy (SE) regarding materials that do not meet regulations. This aims to bolster our collective efforts. We have already initiated this with CANACERO and are collaborating with lawyers specializing in foreign trade.

Generally, having a local production plant provides us with a significant advantage. Not all of our competitors possess this; many import their products. We leverage our domestic production capability, which offers considerable benefits like timely response to quick market shifts or disruptions, while benefiting the Mexican economy.

Q: Beyond commodity prices, what are the significant operational or regulatory challenges your clients are discussing with you?

A: Clients primarily seek a competitive price, often requesting fixed prices for one or even two years. This presents a significant challenge due to fluctuations in international and Mexican steel prices, as well as global events impacting raw material costs and freight. Maintaining stable prices for such extended periods proves quite difficult.

The second area that has gained significant importance is quality. Many mines are now demanding adherence to international standards. Our division, along with several other manufacturers, guarantees compliance with the US ASTM F432 standard. While this standard is not mandatory in Mexico, all our steels meet its requirements.

The third crucial aspect is accompaniment and after-sales service. Mining companies highly value this, and we provide robust support through continuous personnel training across different shifts. Given that mines typically operate 24 hours, often with three or two shifts, and experience high staff turnover, ongoing training is essential. We train all personnel involved in the installation of ground support anchors and ensure compliance with required tests. Clients frequently request pull-out tests to verify anchor quality. Our sales team regularly visits clients to provide support for these extraction tests and to train personnel on proper installation techniques. These are our strongest value points.}

Q: What technologies are you adding to your portfolio and how are they addressing the main challenges for mining companies as they strive for production and energy efficiency?

A: We are seeing a growing trend toward diversification and demand for more specific client solutions. Sandvik is actively working to foster synergies across its divisions, particularly with the Ground Support Division. We have a strong relationship with bolting jumbos, and integrated teams from Sandvik and Ground Support collaborate to deliver advanced solutions. For example, jumbos are now factory-equipped with automated resin cartridge installation and resin injection systems.

These advancements lead to significant time savings and faster progress for contractors and mines. Ultimately, this reduces the overall cycle time for ground support. The synergy between Sandvik and Ground Support is continuously growing, providing clients with solutions that improve installation time, enhance quality, and offer better rock support.

Specific technologies, such as resin injection and anchor systems like MD and MDX, are being strongly promoted by Sandvik. These automated solutions, including the use of specialized resins and anchors, are estimated to reduce ground support installation time by 15% to 20%

Q: Which Mexican underground mines look more interesting for Sandvik Ground Support?

A: The two largest projects over the past couple of years have been Torex Gold’s Media Luna and Endeavour Silver’s Terronera. However, we are also monitoring other developments. Grupo México's San Martin mine, for instance, was idle for many months but is now operational. Peñoles is also reactivating Tizapa after nearly a year-long halt due to union issues. This 2H25 looks promising for suppliers and the mines themselves.

Another significant expectation is the reactivation or resolution of issues at Altos Hornos de México (AHMSA). If that occurs, it could enable the resumption of coal mining in Coahuila, which is developed underground.

Q: What is your overall outlook on the investment climate and growth prospects for Mexican mining for the remainder of 2025 and into 2026?

A: Productive engagements have occurred between the mining sector and the government, specifically SE. Recent discussions, including those during Miner's Day in Guanajuato, confirm that AIMMGM and several companies have engaged with the Mexican government to facilitate investment. The objective is to ensure mining investment continues to flow into Mexico, maintaining its attractiveness as a destination for such investments, all while adhering to established regulations. Open-pit mining licensing remains highly complex, and efforts are underway to prevent similar challenges from affecting underground mining.

Overall, there is a positive outlook for 2026, with new projects initiating and others consolidating. We anticipate growth, perhaps not substantial, but at least a 5% increase in operational volume and a corresponding rise in demand for mining supplies.

Q: Given that outlook, how is the company positioning its strategy to capitalize on opportunities and navigate these challenges?

A: Sandvik's Ground Support division is actively modernizing its production processes, moving towards greater automation. A newly established global operations leadership is meticulously analyzing each of our 27 production plants worldwide, with major hubs in Australia, Europe, Canada, and Latin America. The aim is to implement the best available technologies for manufacturing ground support anchors and elements. This will lead to increased productivity, enhanced competitiveness, and advanced product offerings. 

Innovation remains a core pillar for Sandvik, ensuring continuous improvement. These steps are being taken to prepare for an anticipated surge in demand. Part of this strategy includes establishing regional R&D centers to share best practices across all global plants.

During their visit from June 30 to July 4, 2025, Stefan Widing, President and CEO, Sandvik, and Bjorn Roodzant, Executive Vice President for Communications and Sustainability, Sandvik, were in Mexico. They included a stop in Zacatecas to meet with the state's governor. This highlights Mexico's significant role for Sandvik. Mexico is one of the company's largest sales regions globally. The Mexican mining market has been one of Sandvik's most attractive and fastest-growing markets over the last decade.

Sandvik has recently finalized important deals with clients like Media Luna and contractors such as La Cantera and Cominvi. There is also a strong focus on electrification and automation, with many equipment units now electric instead of diesel-powered.

Sandvik is a Sweden-based high-tech engineering group, specializing in products and services for manufacturing, mining, and infrastructure industries. Sandvik provides equipment, tools, and digital solutions, focusing on enhancing productivity, profitability, and sustainability. Its Ground Support Division provides essential safety and stability solutions for mining and tunneling operations.