Economic Development Ambitions Based on a Long Mining Tradition

The state of Guanajuato is located in the center of Mexico, inside what is known as the Golden Triangle between Mexico City, Guadalajara, and Monterrey. Guanajuato holds a privileged position on Mexico’s economic map: 60% of the country’s population is located  within 400km, as well as 80% of the Mexican internal market, 70% of the country’s source of international trade, and 70% of the automotive industry. In 2012, Guanajuato received US$497 million in foreign direct investment, with the manufacturing industry being the main recipient.

Gold and silver mining are considered to be synonymous with the state of Guanajuato, because of their intrinsic link with the state’s history. Mining has played an essential role in Guanajuato for over 500 years, spanning three centuries of colonial rule and Mexico’s two centuries of independent history. “The state was born because of mining, as was Mexico’s independence, since the main conspirators were miners,” says Héctor López Santillana, Minister of Sustainable Economic Development of Guanajuato. Throughout the last five centuries, Guanajuato’s mining wealth has been based on three systems: the Veta Madre vein, the Sierra veins and the La Luz veins. The first mining boom started only two decades after the Spanish conquest of the Aztec empire, when a vein in the vicinity of San Bernabé was discovered. The beginning of the 19th century marked the decline of Guanajuato as a mining district, primarily due to social unrest after Mexico gained independence from Spain. Nevertheless, foreign mining companies continued operating mines such as La Luz and La Aurora, and by the end of the century production boomed and Guanajuato regained its status as an excellent mining district. The Mexican Revolution halted mining operations in the state during the first decade of the 20th century and it affected mining companies for decades. Today, Guanajuato continues producing gold and silver at El Cubo, Bolañitos, and Guanajuato mines. In addition, many mid-tier and small producers continue exploring and developing mining projects, while others hope to reactivate old mining sites with the aid of new and improved extraction technologies. Guanajuato’s Ministry of Sustainable Economic Development operates parallel strategies for the development of the state’s large-scale and small-scale mining industries.

According to López Santillana, foreign companies dedicated to large-scale mining have the capital and required technology but need support in creating the social and legal environment that protects their long- term and high-risk investments. “While the investor is developing infrastructure and exploring, we are generating – with state resources – a favorable environment in the community or ejido, so that the benefits are felt before the exploitation stage begins. Our participation involves providing services, education and different opportunities for local empowerment, which will create a synergy from which all parties will gain. If we manage to create favorable conditions, the exploration and exploitation process will have no social issues,” he explains. On the other hand, small-scale mining is essentially in local hands and has the aim of providing supplies to the construction industry. Formerly characterized by painstakingly long, inefficient, artisanal processes, it is currently passing through a process of industrialization. Most small-scale mining is led by community members who used to be farmers with no previous experience in this field. The state government is working to help small-scale mining become a profitable industry by encouraging ejidatarios to organize and partner up to seek the required funds to start the industrial exploitation stage. The objective is to develop industrialization, connectivity, and electrification.

In order to foster both large-scale and small-scale mining, the government of Guanajuato has an office dedicated to the promotion and support of the state’s mining industry. It also provides property and agrarian law consultation and sociopolitical expertise, which facilitate the permitting processes and provide the confidence and certainty that investors require for exploitation. López Santillana explains that the state government guarantees investors that they can confidently invest in the state. The continuity of government policy has enabled the transformation of Guanajuato’s economy from being mainly agricultural to its current process of industrialization. “We have not reached our goal yet, but we have been working under the same policy - no matter who has been in power - for 24 years,” López Santillana explains. He also emphasizes that the state has a favorable business environment and a proud mining identity. “We see a promising future for the mining industry. We are very proud of this industry and we are excited by the possibility of discovering new deposits, which will continue to encourage the arrival of both Mexican and foreign investors,” López Santillana affirms.