Enhancing Mining Supply Chain Dynamics

Over the past four years, the reconfiguration of supply chains has highlighted the need to enhance production processes and incorporate technology to optimize operations and efficiency within the mining supply chain. However, this advancement has also brought certain challenges, such as a lack of communication among stakeholders and uncertainty in the mining sector.

Alejandro Hernández, CEO, ACD Group, points out that the COVID-19 pandemic was a turning point for supply chain issues. “To this day, supply chains have not been fully restored. Some chains are still not fully operational,” explains Hernández.

Although Mexico offers significant opportunities to expand supply chains due to its diversification in trade agreements, there are regulatory limitations that hinder the optimal exploitation of these resources. “Regulatory changes, such as tariff increases coming from Asia, are secondary issues that need to be resolved for the supply chain. Free trade agreements—not just USMCA, but also with Europe, Brazil, and Chile, which are mining powerhouses—still face challenges because many of the products and equipment required come from Asia, where regulations and supply chain limitations cause delays,” adds Hernández.

René Valle, Director General, MacLean Engineering, highlights that customs issues and the involvement of armed forces often present legal challenges, with “the law being full of loopholes and open to interpretation.” “Until these things are fundamentally changed and there is certainty about how the rules work, nothing will improve. In terms of importation, it is unbelievable to see how something can be imported with a specific tariff code at one border and completely differently at another,” he says.

Amid these changes, companies have had to be resilient and adaptable. Diego Torroella, Director General, Takraf, mentions that companies have had to adapt as the entire logistics landscape has changed. “Time is becoming a significant concern, and adaptability is crucial. Constant communication with suppliers is essential. Often, communication gaps can significantly impact us. It is a major challenge to maintain strong communication with both the corporate office and the mine. Adaptability is the key word when working with mining clients.”

While regulatory challenges may present obstacles for certain sub-sectors within the mining industry, suppliers must adapt to changing conditions and offer effective aftersales services. René Valle, Director General, MacLean Engineering, emphasizes the importance of automation and digitalization. “How far we can go with automation and digitalization depends on the access we are given. Today, with the information and data generated by the equipment, we can achieve any objective set by the client. But it is pointless to generate a world of information if there is no one to monitor it, no direction for decision-making based on the evaluation of that data, and no long-term plan. There needs to be a strategy based on the data to determine the adequacy of what the provider delivers,” he explains.

Regarding investment, Hernández asserts that there is still a lot to be done in technology, security, and the necessary infrastructure. “In Sonora, regulatory issues regarding lithium have not been well defined, and the roads to get there are challenging. Infrastructure investment is crucial. As a country, we are not investing enough at the human, technical, and technological levels, and these shortcomings are evident.”

The recruitment of new personnel and attracting younger generations to the mining industry is also a challenge. Hernández notes that young people are not interested in the mining sector. Companies need to rethink how to attract talent, banking on what interests new hires. “The critical factor is finding the right people. The most important challenge is how to attract them, understanding their value, and involving the communities and mining companies. We need to create a comprehensive plan because, in the long run, we may face significant problems.”

To address these challenges and seize emerging opportunities, Hernando Rueda, Director of Mexico, Vizsla Silver Corp, recommends improving communication between mining companies and their entire ecosystem, acting as business partners. “It is essential to link with suppliers and the educational sector and establish these kinds of connections to have a broader portfolio. Collaboration with clusters is crucial for training, and we should fully utilize the clusters by leveraging available technologies,” says Rueda.