Ricardo Díaz de León
Infrastructure, Mining, Logistics and Tourism Coordinator
ProMéxico
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View from the Top

Latin America a Growth Opportunity for Mexican Companies

Mon, 10/22/2018 - 09:54

Q: What are ProMéxico’s priorities when it comes to the mining industry?
A: Our main priority is identifying the strengths and weaknesses of the mining industry across the country. For example, we found that northern states such as Sonora, Chihuahua and Zacatecas have an excellent network of suppliers while growing southern states like Guerrero greatly lack suppliers. By identifying these gaps in the market, we can better provide solutions and advice. To better coordinate the activities of the mining industry in Mexico, we believe that it is important to create a variety of meetups and forums so that businesses in the south know what is happening in the north. It is also important to note that there are differences even within the regions such as mining policies and openness to new projects that can also make a difference. The south faces a variety of challenges such as getting the cluster organized and promoting the participation of the public sector in the mining industry.
Q: Why should the Mexico collaborate more with competing mining jurisdictions in Latin America?
A: We should see the growth of our southern neighbors more as an opportunity to collaborate than as a danger or competitors. Many suppliers in Mexico excel in providing new solutions that other Latin American mining jurisdictions could take advantage of. There are a few large companies that are taking advantage of the context. We are building ties by creating an agreement with Chile that will be replicated in Peru and Argentina. The agreement is to exchange specialized products and technology. Many of these countries are also opening to more importation and we should mirror these opportunities by exporting more to these areas. We want mining companies to increase their vision beyond national growth and find areas of opportunity in the international arena. Many do not know that they are ready to export and we can help them get started. It is also an important strategy to mitigate the risks of trade wars. China is interested in investing with our mining industry and exchanging abilities. We should not forget about key success cases, such as Canada and its growing mining industry that can equally provide opportunities to the Mexican mining industry.
Q: What should the Mexican mining industry do to increase its international competitivity?
A: The biggest issue that the country faces is its insecurity. Companies often have to invest in their own security teams and this can imply up to 4 percent of the costs of the operations. It can quickly add up. For a large company, it is not such a great issue but it is hard for smaller companies to invest and guarantee safety in its operations. We need to help these small companies as they are the ones that are supplying transnational operators with the machines and products they need. This is especially important in growing states like Guerrero that have high levels of insecurity and projects in areas that are not urbanized.
Q: How can a company that wants to enter the mining industry mitigate these risks?
A: There are many success cases to learn from and of companies that are reinventing themselves and have been able to prosper and survive. The best way to mitigate risks is to understand the industry well. In these matters, companies should take advantage of the intelligence that ProMéxico has collected and has made available to the public to make the best investment decisions. Our goal is to not be passive promoters but to play an active role in helping companies thrive and grab important business opportunities that are arising. We also participate in international fairs and events to educate companies that are interested in entering the country or doing business in Mexico.