Financing Trends and Investment DynamicsBy Miriam Bello | Wed, 02/12/2020 - 12:27
Javier Reyes de la Campa, Chairman of Accendo Banco (AB), highlighted Mexico’s enormous potential in the mining sector during his presentation at the Mexico Mining Forum 2020 at the Sheraton Maria Isabel hotel in Mexico City on Wednesday, saying the industry is crucial to achieve greater economic growth. “The vision of the Ministry of Economy is very assertive in its approach to strengthen and grow our capacities in the sector,” he said.
Mexico is among the leaders in the production of silver, gold and copper but what makes the country especially strong on the operational side is how it takes advantage of the productive chain, Reyes said. He mentioned that countries like Ecuador, which has just opened up its mining industry, are enjoying rapid growth. “That should make our country prioritize the strengthen of the sector.”
AB has a great deal of experience in financing mining projects, which is why Reyes believes that “right now is the perfect moment to invest in the mining sector. This is the right moment in the economic cycle to do so.” He added that after the 2008-09 global economic crisis, the world’s monetary policy stopped working. The proof of that is inflation and the growth of national debt across the world. Right now, the US national debt is over US$22 trillion.
Reyes also said pointed to risks that could hamper the global economy, pointing to China and the coronavirus as an example. “Coronavirus has affected supply and demand of products and services and life in China is basically on hold,” Reyes says. Using graphics, he demonstrated how China’s growth was at 6 percent and after 30 days it had slowed down to 4 percent. Stocks in China fared even worse, dropping dramatically in five minutes. “After 11 years of up and downs, China’s market might not recover from this as quickly as we think.”
The safe bet right now would be to avoid risk, Reyes said. He added that the mining sector represented a good opportunity. “I encourage investors to look at the mining sector, which has been quite ignored for the past decade.”