Mining Is Exceptionally Prepared for Facing the PandemicBy Alejandro Ehrenberg | Wed, 05/06/2020 - 13:01
Q: Why is mining essential to Mexico’s economy?
A: The mining sector is one of the pillars of Mexico’s economy. One out of 10 formal workers in the country depends directly or indirectly on mining. Not considering the mining industry as essential ignores its central contribution to Mexico’s development. Mining is unique among other industries because it reaches far-flung regions where the population tends to have limited opportunities. People in some of these regions are subsistence farmers whose margin for survival is short. No other industrial activity is able to reach these remote rural areas. Mining, when properly undertaken, can redistribute wealth to regions that are normally marginalized. Moreover, when mining moves into a remote community, it provides training opportunities and develops the local workforce. It opens up opportunities for younger generations.
Mining is also essential for other industrial activities. When people speak of mining, they usually refer to the metallic segment. But the sector engulfs more than that. It also includes nonmetallic extractive activities. For instance, the cement industry is closely related to mining. The resource that is converted into cement is mined from the subsoil. Other mining products are used as inputs that are essential to key industries. The oil sector, for example, requires massive amounts of baryte as a weighting agent for drilling fluids. Oil is absolutely central to the Mexican economy. Fluorite is another nonmetallic resource that is used in the health industry. Phosphates and nitrates are indispensable as fertilizers for the agricultural industry. To sum up, mining pertains to everything that is extracted from the subsoil, and it is crucial for other industries.
Q: Can Mexico lose market prominence if mines are not allowed to continue operating during the COVID-19 emergency?
A: That is definitely a possibility. One of Mexico’s main metallic products is silver. Mexico has been the top silver producer in the world for more than a century, with brief exceptions. If Mexico’s silver output is suspended for several months due to mine closures, a vacuum will arise in the market. Other countries with stronger mining policies are likely to fill that vacuum, which will be hard to regain when the situation normalizes. The supply contraction will not be felt immediately after mines are closed. There is enough inventory for a few weeks. But if supply is not restarted soon, key applications will have to find supplies wherever they can find them.
Q: Why is public opinion about mining generally negative?
A: The industry is not always as proficient as it could be in communicating data and figures related to its importance. It must be recognized that, for centuries, the industry was not duly responsible with the environment and earned a bad reputation. Furthermore, in Mexico, the Spanish conquest was intimately tied to a quest for mineral resources. That is a true feature of our national history and is taught to children in schools. What should also be taught is that, in the last few years, the sector has made a quantitative leap forward. Many mining companies now are at the vanguard of ESG practices. Nonetheless, public opinion is stuck on an outdated perspective of the industry. Changing that is very hard and requires a coordinated approach among different stakeholders.
Q: How is the mining industry preparing itself to face COVID-19?
A: Mining has developed in a rough and isolated environment. That has resulted in a resilient supply chain. Many links in the chain have learned to work at a high level of isolation from the rest of the world. Work shifts normally are 20 days at the mine and 10 days of rest, but longer periods on-site are also achievable. Mine operations have food supply chains in place and medical services on site. Safety protocols in the industry are very sophisticated and anyone entering a mine is thoroughly screened. In addition to miners being used to isolation, there is a safety culture in the mining industry that has already prepared it to comply with extra efforts required by the current health contingency. Miners are exceptionally prepared to cope with the risks a pandemic presents. Therefore, allowing them to continue their activities is not only essential for the Mexican economy but is also low risk.
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