Mining Needs Better Communication StrategiesBy Lorenzo Núñez | Thu, 09/02/2021 - 17:32
Q: Why is mining a fundamental industry for the development of Mexico?
A: Many of the of technological developments in multiple industries are based on what mining digs up from the ground. Here in Mexico, mining has always been a highly important industry. During the colonial period, one factor that set our country apart from other countries was the availability of precious metals, such as gold and silver, which have remained relevant to this day. Those early discoveries hundreds of years ago defined the “New Spain” as one of the most important mining countries in the world. The mining industry has maintained its economic relevance to this day, comparable to Mexico’s oil and gas industry. However, contrary to oil and gas, which are on decline, mining has remained at the forefront because of its importance to many other industries.
Q: How can Mexico improve its position as a mining investment destination?
A: The lack of legislative certainty has kept investors on edge. The legislative situation in our country must be improved through the provision of more information. Data must be available to all people, from common citizens to the highest-level government officials. We have seen a trend in social media where there is a great deal of misinformation concerning mining. I would like to urge mining companies to make a greater effort to communicate what the mining industry is and the many benefits it provides communities. We need people to understand that the mining industry is a responsible and highly competitive sector; we have always aimed for sustainable mining. The mining industry in Mexico is world class and it is much more inclusive than it was a 20 years ago. The industry is changing for the better. It was not too long ago that I personally visited Peñasquito and witnessed women being incorporated as part of Women in Mining. That really makes me proud of my industry. I have been a miner my entire life and I have seen highly competitive salaries, great benefits and job security. Unfortunately, our industry is susceptible to social media bombardment, especially when there is an accident.
Q: What steps is the Mexican government planning to take in the short and medium term to reduce investment risk and remove legal and regulatory hurdles?
A: The people I have encountered during the brief period I have been at the Extractive Industries Unit while coordinating the General Management of Mining and Mining Development have been people with extraordinary knowledge and capabilities. We are working on facilitating the exploration of lithium, considered “white gold,” and there have been many discussions around it. Our job is to ensure that everybody gets the correct information. Ultimately, our goal concerning lithium is to keep pushing for thorough exploration campaigns. There are already existing permits but we are looking for more potential areas with rich deposits and we are encouraging their exploration.
Another important aspect is the 2013 Tax Reform that disallowed tax deductions during the first year of exploration. That represented a huge risk for mining companies due to investment vulnerability during the exploration phase. This is the reason behind the 40 percent drop in exploration investment. Behind the scenes, we are working on a proposal with Economy Minister Tatiana Clouthier and CAMIMEX. We are looking to improve the exploration phase for companies, as well as exploring the possibility of reducing the amount of taxes and implementing other incentives.
Q: What is the outlook for mining concessions and permits?
A: Unfortunately, there is a presidential order to stop mining permits. However, and this is where we come in, while we understand that there will be no new mining permits for the time being, we are asking the government to allow us to work on the ones we already have. That is what we are working on, in addition to lithium explorations and tax reductions. We need to oversee current exploration programs, which are very complex. Mining exploration takes years and sometimes they do not represent any viable resources, meaning that the exploration investment could be lost. That is why we continue to make an effort to reduce the risks related to mining exploration investment.
The Extractive Industries Unit at the Ministry of Economy coordinates all state mining activities, as well as actions to promote domestic and foreign investment in the sector.