Jesús Mesta
Deputy Minister at the Ministry of Innovation and Economic Development
Chihuahua
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View from the Top

Mapping Chihuahua’s Mining Priorities

Mon, 10/22/2018 - 12:42

Q: What are the ministry’s main priorities when it comes to the mining industry?
A: In relation to the mining industry, the main priority of the Ministry of Innovation and Economic Development of Chihuahua is to provide legal certainty to investors and to push for the immediate deductibility of exploration expenses. It is also our priority to distribute the resources of the Mining Trust Fund in a transparent way. Chihuahua’s goal is to attract more investment to the state, especially given that it is the second-leading producer of silver, zinc and lead and the third for gold in Mexico.
The most important factor for achieving this goal is legal certainty. Unlike other industries in which investors worry about location and logistics, in mining investment is mostly defined by mineral potential. As part of the local government, it is the ministry’s role to facilitate the optimum conditions for investment, and this includes legal certainty. It is a priority of Governor Corral’s administration to enforce the rule of law and compliance with the law. All mining companies and others across industries should have the confidence to place their resources in a state in which the law is respected.
Regarding the tax regime, Governor Corral has repeatedly pushed the federal government to advance the deductibility of exploration expenses from 10 years to one, restoring the previous legislation in place. Statistics clearly show that taking away this tax incentive has led Mexico to lose competitiveness against other mining jurisdictions.
Q: What is the main impact from mining activities on Chihuahua’s local communities?
A: It is curious that communities surrounding mine operations often inherently reject mining projects when they are first being introduced. But we have found that once they experience the benefits of having a mine in their community, receive the resources of the Mining Trust Fund and have the possibility of finding a well-paid job without having to emigrate to other regions, their opinion drastically changes.
The main challenge for the mining industry is communication. The industry must learn to efficiently publicize all the benefits it can provide as a legacy to communities and the way in which modern mining works. The industry’s processes in exploration, production and ore processing are mesmerizing in their technicality and sustainability but this means nothing if people are not aware of it. In fact, people often assume that mining companies arrive at a community, drill, exploit and leave the territory and communities worse off. But this is far from the reality of how mining is today. We need to communicate the current reality of the industry to all and this is its main challenge.
Q: What is your assessment of the use and distribution of the Mining Trust Fund?
A: In Chihuahua, we believe 100 percent that the fund must be solely distributed among the communities in which mining activities are carried out. That is why it was created. Governor Corral has addressed this matter several times with the federal government as we do not think that it should be allocated 20 percent of the fund’s resources. We are also convinced that the fund should be allocated to productive projects to grow local economies and develop long-lasting benefits for communities. We also hope the fund will contribute to the modernization of the Undersecretariat of Mining, to make it more efficient and responsive to the industry’s needs.