First Port of Call for Foreign Mining InvestorsWed, 10/21/2015 - 12:16
Investors looking to inject their funds into a foreign country need to be confident that their investment destination will welcome and support them, especially when their investments target capital intensive industries like mining. In Mexico, that support has a well-established name: ProMéxico, the country’s investment promotion agency. In the first six months of 2014, foreign mining companies doubled their investment in Mexico over the same period in 2013, reaching US$854 million. This success was hailed by President Enrique Peña Nieto as being in large part due to ProMéxico’s participation in international mining conventions. “We help investors to make successful investments and reinvest in Mexico,” says Ricardo Díaz de Léon, Coordinator of Mining and Infrastructure of ProMéxico. His division of ProMéxico collaborates closely with the General Coordination of Mining to create promotional materials that present Mexican mining opportunities in an alluring way. These materials are then distributed by ProMéxico’s counselors in the world’s foremost mining jurisdictions, such as Canada, the US, Australia, China, and Chile. “They are tasked with approaching companies and promoting mining opportunities available in Mexico. These overtures aim to bring companies to Mexico to meet with our mining representatives, across chambers of commerce, government entities, leading companies, and suppliers,” outlines Díaz de Léon. ProMéxico’s mission does not end once a company has made the decision to invest here. It remains a strategic ally to help foreign investors navigate the seas of Mexican bureaucracy and permitting, while also alerting them to any opportunities they might have missed. For example, in 2012, a new scheme was announced to promote public-private partnerships in Mexico, with a budget of MX$7.7 billion (US$520 million) set aside to boost such deals. According to Díaz de Léon, the mining industry has not fully taken advantage of this scheme but companies can consult with ProMéxico about how best to do so.
The main way ProMéxico remains front and center of Mexico’s investment attraction strategy is by being ubiquitous at expos and trade shows around the world. “Participating with pavilions or as speakers is vital for us to remain close to potential investors and to set up a direct relationship with their executives. This allows us to not only present Mexico but also to understand how to best satisfy the aims of these companies,” states Díaz de Léon. Once this understanding is gained, ProMéxico can also move to the next step. This can mean linking foreign players with Mexican suppliers, helping to take care of its infrastructure needs, or advising on permits. “For example, if a mining company needs a supplier to create a road to its mine, we can introduce it to local suppliers that can take care of such a project,” says Díaz de Léon. This requires ProMéxico to also keep its ear to the ground within the country to be able to rapidly identify the right local partners. Overall, ProMéxico seeks to be the first port of call for foreign investors in almost any setting. “It is easier to access information about permits and get in contact with the General Coordination of Mining through ProMéxico than through an international consulting firm,” claims Díaz de Léon. “We have a large network of sector specialists as well as connections to a wide range of governmental entities in Mexico and abroad.” Considering that 70% of the country has not yet been explored for economic mineral deposits, ProMéxico aims to help unlock Mexico’s full mining potential. “Though metal prices have decreased, Mexico is still the number one producer of silver and an important exporter of gold,” Díaz de Léon states.