The mining industry faces strong headwinds and must drive productivity and improve operational savings. Mining companies continue to experience volatile commodity prices and challenging economic fundamentals as global demand slows. Following an extended period of massive capital investment, the mining industry is now firmly focused on improving productivity and on sustainable cost management. Miners face declining ore quality, operations deeper underground or in remote locations to find ore and a macroeconomic context that changes frequently with commodity prices. This makes it increasingly challenging for companies to access capital. We believe in using technology to close this talent gap.

We are worried about the 2018 presidential elections in Mexico affecting mining policy continuity. We will have to wait and see what the results will be but whatever the outcome, we are dedicated to working with the government for the promotion of the sector, regardless of ideologies. The most important task is being able to communicate the importance of mining for our country because many people do not recognize its value. Essentially, Mexico is a mining country, not because miners decided it should be that way but because of its rich mineralization and resources. In fact, Mexico is often ranked as one of the most promising mining countries in the world because of the reserves it holds.

The determining factor is, and always will be, the metal prices. Any commercial transaction is based on international commodity prices so that will have a huge impact on the profitability of a mining or trading company’s business. Of course, SGS has no control over the international markets but there are other aspects, such as logistics and quality, that we can help our clients to improve. We check the weight, quality and quantity of mineral for producers prior to the product leaving the port, enabling the acquisition of warranties and so improving and streamlining the trading side of their business. We see a lot of room for growth in this particular segment.

For Canadian companies either already in Mexico or looking to invest in the country, it is business as usual. We believe that Canada and Mexico have a mutually beneficial trade relationship, and that relationship will continue regardless of external factors. The initial boom started around 10 years ago when a swathe of Canadian junior mining companies started developing projects in Mexico. Over that time, the relationship has come a long way. Every year there is a better understanding in Mexico of Canada, and vice versa, both at the government and commercial levels. We aim to deepen that relationship through the work we do providing a platform for B2B discussions between Mexico and Canada.

We notice that the western world and China have different ways of reacting to the geopolitical context and its impact in the mining industry. China is quickly taking advantage of the market by creating a strategic alliance between the government and the private sector. Companies often give the Chinese government an almost unlimited amount of funds to advance their interests in areas such as Africa. It is a quite incredible method of resource imperialism where China has managed to take over large swathes of the world.

The prevailing sentiment is that factors such as the new presidential administration in the US and the Chinese economic rebound should have a positive effect on the mining industry. The aggressive and unpredictable foreign policy of President Trump in particular is generating economic instability on a global scale and this will encourage investors to look for less risky assets like precious metals and other commodities. The mining sector will always be volatile and difficult to predict but in terms of metal prices 2017 is shaping up to be a strong year and we have already seen companies being more active in the sector.

The NAFTA renegotiation is something that we have to prepare for and the federal government should be ready to negotiate but it is important to remember that NAFTA works three ways. There are some clauses that benefit the US and not Mexico or Canada, and vice versa, and so we have to remember Mexico's strengths. Not only are production costs in Mexico low, but there is a tremendous amount of high-quality labor available in the country, which is not easy to find. This is especially true in the state of Chihuahua.