Local Supply, Culture Understanding Boost Tech Adoption: CEC

Q: How does CECMS's technology address mining's ESG challenges and aid in clients' environmental goals?

A: CEC Mining Systems manufactures proprietary vacuum disc filtration technology. While applied in various areas, since 2014 there has been growing interest in using this technology for managing tailings produced from concentrators. A key focus area for us is ensuring technology is competitive not only in capital cost of acquisition operating cost per ton filtered. This includes a high degree of automation, which allows for lower operational and maintenance labor requirements per ton

The technology we manufacture is among the most energy-efficient of its kind. This efficiency often allows deployment without requiring major electrical upgrades at existing facilities. This is important as many clients face constraints on the available electrical power at their sites. Expanding power supply, whether through the government grid or local generation like diesel or solar, is typically expensive and complicated. Energy efficiency also offers advantages for a company’s ESG metrics and carbon emissions since every kWh consumed corresponds to a measurable carbon output. 

More mature customers increasingly understand that every technology selection and adoption decision impacts carbon emissions. Consequently, we use economic and carbon emission modelling to demonstrate our technology's advantages. This modelling allows us to show not only the dollar savings but also the carbon savings compared to other technologies, highlighting the potential impact on the client's public reporting standards, such as in their annual environmental reports.

Q: Given the current market dynamics, what role do you see CEC Mining Systems playing in enhancing Mexico's mining industry’s operational productivity and long-term growth?

A: The need for critical minerals is ever present in the Americas. In Canada, the government's role in this process is a major topic. Mexico is also experiencing shifts due to recent government changes and evolving regulations. Key discussions in Mexico revolve around foreign investment, technology adoption, and the crucial role of community relationships in enabling or hindering project development. We provide solutions, such as filtered tailings and underground backfill, to mitigate risks associated with tailings deposition.   

Mexico faces challenges like significant water scarcity in certain areas. Furthermore, agriculture is an economic driver and source of rural employment. This creates conflict between agriculture and mining, often centred on land use, water consumption, environmental pollution, and the risks of traditional tailings deposition. While CEC Mining Systems provides technology and engineering, we view our role more broadly: deploying our solutions helps mining operators gain and maintain the crucial social license to operate within their communities.

This social license is increasingly vital in the age of digital media, where operational transparency is unavoidable. Consequently, companies face greater economic and socio-political incentives to adopt alternatives to traditional tailings deposition methods, which carry inherent risks. CEC Mining Systems positions itself at this nexus, offering viable economic alternatives. Our solutions enable operators to demonstrate to investors, governments, and local communities that they have thoroughly evaluated options to mitigate risk and maximize social benefits within their chosen tailings management strategy.

Q: What unique advantages do your solutions offer to mining operations here?

A: Our major differentiator is that many competitors in Mexico are large multinational firms with thousands of employees. Companies of that scale experience high employee turnover, which makes establishing long-term client relationships difficult. During project execution with these large firms, a client often interacts with multiple contacts across different departments, potentially five to seven people for a single project.

By contrast, our process is designed for continuity. We provide a single point of contact throughout the project lifecycle. This allows us to understand the project fully and maintain the client relationship over the life of the asset, and not just the life of the project. Focusing on employee retention and maintaining consistent core teams for projects is crucial. 

Q: What challenges, including common international misunderstandings, hinder the introduction of new mining technologies in Mexico?

A: Few companies want to be the first to try a new technology. The mining market, particularly in Mexico, is a conservative industry, making new technology adoption challenging. With that in mind, the most critical step in developing a new technology is finding the first customer and ensuring their satisfaction. 

We try to appreciate the diverse needs across different jurisdictions, from Oaxaca in the southwest to Hermosillo in the northwest, and the central region, including Zacatecas and Durango. Our ability to understand these localized needs and customize solutions based on the specific site, client, topography, and climate enables us to provide bespoke offerings in different regions. This adaptability has given us longevity in the Mexican marketplace.

This same dynamic of needing localized solutions applies in most of Latin America, but it is particularly crucial in Mexico due to its geographic size. Recognizing this is an important factor for gaining and maintaining business there.

Q: How can US tariff pressures impact the continuity of your supply chain and how are you working on strengthening it? 

A: Our manufacturing is predominantly based in Canada, although some suppliers are in the United States. However, with increased discussion surrounding recent trade friction between the United States, Canada, and Mexico, we are exploring alternatives in the Mexican market for manufacturing critical components. This approach aims to reduce logistical costs and avoid potential retaliatory tariffs between the countries. This represents a major shift in our thinking regarding supply chains and project delivery.

I grew up within the market dynamics of NAFTA, characterized by free trade across the region. We can no longer assume that this environment will continue for the foreseeable future. Consequently, our company is investing rapidly in identifying localized or domestic supply alternatives in every market where we operate.

This strategy aims not only to benefit our company by reducing costs associated with trade, tariffs, and logistics but also to recognize that many talented fabricators and suppliers exist in markets globally. We believe utilizing these local producers offers material benefits for job growth and creation within those markets.

Q: What specific objectives does CEC Mining Systems have for its growth and expansion in Mexico over the next five to 10 years?

A: Our growth potential and plans are closely tied to the political climate, as our business depends on capital investment by mining companies. We get involved when companies invest in their operations, whether through new greenfield projects or brownfield upgrades aimed at expanding throughput or driving efficiency. Globally, we assess where capital is being spent based on the best use of funds. Recently, many major mining companies have limited investment in the Mexican market due to perceived political risk associated with government changes and the resulting impact on expected returns.

Despite this, we view Mexico as a major potential market over the next 5 to 10 years. However, continued success depends on Mexico maintaining a mining-friendly jurisdiction. We must continuously monitor how federal and state governments support local investment. 

CECMS plans to evaluate and advance other forms of investment in Mexico. A key strategy involves localizing aspects of our supply chain, working with local equipment manufacturers. There are numerous highly qualified manufacturers serving the oil, gas, and mining sectors in Northeast Mexico. We are working with some to initiate feasibility studies on manufacturing various packages we typically produce elsewhere. 

Our goal is to position CECMS not merely as a Canadian importer of technology, but as a supporter of the Mexican economy and local job growth for projects implemented here. This localization strategy is key to differentiating ourselves, potentially lowering costs for end-users, and enabling Mexican mining clients to demonstrate local economic support, through jobs, investment, and taxes, even when using Canadian-designed technology.

CEC Mining Systems is a Canadian manufacturer specialized in ceramic disc-vacuum filtration systems and turnkey tailings dewatering solutions for the mining industry.