Durango Pioneers Collaboration Between Public, Private SectorsMon, 10/22/2018 - 13:06
Q: What are Durango’s priorities when it comes to mining in the state?
A: The mining industry represents one of the most important economic activities in the state. Approximately 5 percent of our GDP relies on the sector and we are developing strategies to ensure the continued growth of operations in Durango. The Ministry of Economy acts as a facilitator for conflict resolution in social and environmental matters to guarantee the continuation of projects and assure private sector companies that they can continue to invest in the state. We believe mining policies in Mexico are consistent and have more stability than those in Canada, where each province has its own policies. We have a national law that all states follow.
Q: How is the state taking advantage of the Mining Fund to advance social projects?
A: The reality is that the adequate use of the Mining Fund lies in the hands of the government. Authorities must prioritize the appropriate use of the funds. We have been receiving capital from the fund since 2014 and have been investing it directly into the communities. Our state has used 100 percent of the funds because we prioritize its fast use to make sure it is being directed to the right areas. The use of the fund is clearly indicated by the law and divided into several priority segments, such as health, highways and education. The trick is to collaborate with mining companies and communities to identify the main necessities and avoid just meeting the needs of the municipal leaders. A leader may believe a park is the most important project but the community may be more in need of water infrastructure. Constant communication clears up these doubts.
Q: What results do you expect from the signed Coordination Agreement for Promotion of the Competitivity and Productivity of the Mining Sector?
A: This is an agreement that was signed in 2017 by federal agencies and the Ministry of Economy. It seeks to solve issues that companies are facing in the industry. If a security matter exists, for example, we can use the agreement to find a solution. The idea is to promote collaboration between the private and public sectors to find the best solutions to problems. One of the first issues we dealt with through this agreement was the delay in permit approvals, including mining concessions.
Q: What strategies does Durango use to successfully create agreements with the federal government?
A: It is essential to be direct and not only say what they want to hear. We can solve many matters through collaboration. For example, Durango has small mining companies that still use mercury to process gold operations, which can be a danger to the safety of miners, their families and the environment. We are developing a project to teach them how to transition out of this chemical and recover gold in a more sustainable manner. The project requires a total investment of MX$2 million. It is an example of a successful agreement signed with the Undersecretary of Mining a year ago.
Q: What should the new administration prioritize when it comes to the mining industry?
A: There are various areas the new administration should prioritize in the mining industry and in general when it comes to boosting the country’s economic development. Five years ago, the mining industry was in fourth or fifth place in revenue generation and now it is much lower. It is losing relevance but can gain back the importance it once had. We need to revise mining regulations and concessions as well as access to capital.
In Durango, we do not have enough resources to help companies financially as the size of loans or capital we can provide is not sufficient to start new projects. Unfortunately, the mining industry is capital intensive and the state cannot provide this. Instead, we are using different strategies to help small miners by offering training and facilitating processes. The state has 200 small miners and their biggest need is capital.