Jesús Herrera Ortega
Detector Exploraciones and Geoprocesos
View from the Top

The Economics of Mining Entrepreneurship

Mon, 10/21/2013 - 20:54

Q: What opportunities exist in Mexico for the discovery of more superclass mineral deposits?

A: Mexico has a lot of untapped potential. Every year we hear about new mineral deposits that are among the largest in the world, and companies like ours have contributed a lot to the discovery of these important ore deposits. Our territory still presents a lot of opportunities; the only limits are human capital capacity and investment budgets. Unfortunately, when the sector reactivates we tend to lack the capacity to feed it. Mining companies, service providers, academia, and government have to work together to activate the potential of the Mexican mining industry. The mineral deposits are there, ready to be found, we just need to move adequately to capitalize on those opportunities.

Q: What was the idea behind constituting two geological consultancy companies, and what are the main services that Detector Exploraciones and Geoprocesos provide?

A: I decided to create two different business units in order to win a greater share of the market and to separate the services we provide, and it has also helped to simplify the administration. We provide our mining customers with all of the information they need to fully understand the different features of the properties they want to explore. When we conduct geological analysis and rock sampling we are able to predict where in the property the minerals are more likely to be deposited. Having this information makes it easier to locate and explore mineralized areas. This type of analysis will save an enormous amount of time and money, because drilling is neither cheap nor quick. After drilling we send our samples to laboratories so that geochemical trials can be performed to determine if the projects are profitable or not. Our responsibility is to make sure that sampling is being carried out systematically and in the right locations, so that the information provided is consistent and usable.

Q: What do you consider to have been your greatest achievements in the running of your two companies?

A: I am very proud that Detector Exploraciones and Geoprocesos together are currently employing over 140 people. What is also satisfying is seeing that many of the young trainees that worked with us in the past are now occupying important positions within the Mexican Geological Survey. It is nice to watch them develop professionally with us and go on to succeed in their careers. Something that I really treasure about my work is that it reaches every single corner of the country. Our work directly impacts growth in the communities wherever we operate. Sometimes we work in places with very precarious conditions, but after a few years of the mineral deposit being found these communities benefit from all types of services and an enhanced quality of life.

Q: What is the most important lesson you have learned as a Mexican entrepreneur?

A: Over the course of my career the most important thing I have learned is how to make good use of the companies’ funds. Over time I have seen a great number of entrepreneurs fail because they did not manage their resources well. A common error among Mexican SMEs is that the owners think that the money the company generates belongs to them. I understood that the money my companies earn belongs to the organization and to its workers. One cannot receive money from the company and start spending it on trips and properties. Savings are fundamental to any developing company, and for any company looking to consolidate itself. Another common error, especially within the mining industry, is that a lot of company owners tend to employ their own relatives and friends. Being part of the family does not give you the right set of skills to make a company grow. I have seen a lot of companies fail as a result of this. The only way to be successful is to devote yourself to your duties, be disciplined, and know how to save money.

The success of mining companies as well as our own success will depend on how we allocate our resources. All businesses are linked to developments in their country’s economy, as well as in global markets. For this reason, our strategy will be to save resources in times of prosperity so that we can withstand the difficult moments. One of our ambitions is to create a more consolidated team that can continue to support our mining customers by helping them to find more economically viable mineral deposits that will be profitable in the long term.