Álvaro Navarro Gárate
Economy Ministry of Chihuahua
View from the Top

Mining Investment as a Catalyst for Economic Growth

Mon, 10/21/2013 - 11:00

Q: What are your priorities regarding the mining industry?

A: The state government’s priority is for the mining industry to be highly productive, socially responsible, and have a low environmental impact. We are helping to increase profitability for investors, but on the other side we want them to leave behind trained people who are able to supply services to other mining operations. The state government has brought training courses to the Sierra Madre to enable local communities to provide services to mining operations. Through social responsibility initiatives we have been able to work with mining companies in order to achieve high productivity in mineral extraction. Through training, local communities can become providers for the industry.

Mining brings investment, and through investment jobs and economic development are created. In other words, it brings income to Chihuahuan families that are directly or indirectly involved with the industry. Millions of dollars are invested in mining operations, but minerals are extracted and then taken out of the country, leaving very little behind. That is the reality. Through changes in the current legal framework we want to transform this, creating a bigger economic impact in the state’s mining regions. Our objective is to generate significant added value for mining operations. This means that we want more mining processes to stay in Chihuahua in order to achieve continued economic development by creating jobs locally instead of just exporting raw materials as we currently do. We are creating opportunities for local businesses to become providers to the mining industry and add value to our mineral production by having more processes done locally. Around MX$18 million (US$ 1.4 million) is spent on supplies for the industry daily. By integrating those processes into our local industry Chihuahua will become more competitive, because mining companies will be able to acquire supplies locally at very affordable prices. At the same time, a just-in-time program will make companies more competitive.

Q: Around 90% of the machinery and supplies used in the mining industry is imported. How could the state government encourage the use of locally manufactured equipment?

A: It is exactly this that is our great challenge. We want to transform that figure into 90% local content and 10% imported. This is where the cluster comes in, because it allows the government to work together with the industry in an organized fashion, with goals and objectives, and at the same time measure progress. There is a joint responsibility between the government, mining companies, and academic institutions, which means that we work together whilst respecting the autonomy of all members. We do not get involved in their activities, however we want their operations to be highly profitable, highly socially responsible, and to have low environmental impact.

Q: What are the Ministry of Economy of Chihuahua’s strategies to position the state as an attractive investment destination?

A: We are attracting a lot of investment as Mexico regains market confidence. Manufacturing companies that were established in China are now coming to Chihuahua, and we are investing in local infrastructure and logistics to attract even more investment. To raise Chihuahua’s competitiveness, for example, we are opening new railroad routes to connect the Asia-Pacific market through Sinaloa with the Topolobampo-Mazatlan route. The goal is to provide infrastructure that will position Chihuahua as the Pacific entrance to the US. We are creating the required infrastructure to stimulate trade and transform Chihuahua into a highly competitive, efficient, and productive state. These efforts translate to investments of over US$700 million, just in infrastructure.

Q: How are you working to improve the perception of the security risk in the state?

A: When the current governor César Duarte Jáquez took office two and a half years ago, public security was a serious problem in the state. The governor advocated laws against organized crime and worked closely with the executive, legislative, and judicial authorities of the state. These efforts led to a drastic reduction in the crime rate in the state. Today, Chihuahua has become an example for public security in Mexico. The improvement of the situation has allowed us to change not only the perception of the state, but also the reality. Investors say that as a result of security and education indicators confidence has come back to Chihuahua, and with it investment, too.