The New Stars Entering Mexico’s Mining OrbitMon, 10/22/2018 - 13:15
Just like Mexico, Australia and New Zealand are traditional mining countries, with activities dating as far back as the gold rush of the 19th century. Oceania has produced prolific mining companies, including Rio Tinto and BHP Billiton. With BHP having entered the country as a PEMEX partner for deepwater oil activities, Donald Smallwood, President of the Australia, New Zealand and Mexico Business Council (ANZMEX), says companies from the region see increasing potential in Latin America across all industries. “Australia used to focus on places like South Africa more due to geographical advantages and cultural similarities but international integration has opened new opportunities in Latin America,” he says. “Trade agreements are helping create ties across the ocean.”
Most of the international companies in the Mexican mining industry are Canadian but Australia is starting to cement its relationship at a federal and business level in the country. “Australia and New Zealand can offer Mexican companies expertise in many industries, such oil and gas, minerals and agriculture, as both regions have similar characteristics,” says Smallwood. He highlights that Australia has one of the most technologically-developed mining industries in the world, as well as being among the biggest exporters of education. “It has many universities dedicated to mining that companies can take advantage of by sending employees to learn more about the latest technology,” he says.
ANZMEX strives to develop business opportunities for all parties involved with the council and to help individuals and companies with similar approaches connect. “We facilitate networking and create atmospheres where companies can get together and find ways to collaborate. We also work with the Australian Embassy and Trade Commissioner Service to achieve this,” Smallwood says.
Given the global geopolitical situation and the US pulling back from its traditional alliances, ANZMEX sees great opportunities in Mexico and is working to raise its profile. “There are many opportunities considering the increasing integration that is being seen in the world,” Smallwood says. “The US pulling back from its role in the region is also pushing Mexico to strengthen its relationship with other countries. The TPP-11 and Pacific Alliance trade pacts are a reflection of these trends.”
Smallwood says companies join ANZMEX to network with other members and to create more business opportunities. “Chambers are important not only for companies entering Mexico but also for those that are already established as even competitors can find ways to collaborate and offer better services to clients,” he says. “We want our council to be a place where people can meet others that have faced similar issues to improve their services.”
The first step when entering Mexico is to understand the country well. This helps ensure success as the country deals with complicated matters such as land ownership and ejidos. Smallwood adds that ANZMEX can help newly-arriving companies connect with good law firms that are members of the business council. Understanding indigenous communities is a common thread between Mexico, Australia and New Zealand, and Smallwood says companies coming from Oceania inherently understand the difficulties and intricacies of these relationships. “We have experience dealing with indigenous communities and creating a legal system that works both for communities and companies,” he says. “The area has a high level of social responsibility that Mexico can learn a lot from as it has one of the biggest indigenous populations in the world.”
Smallwood stresses that the protection of indigenous communities needs to be part of the legal system and the country needs to make sure regulations are being enforced. “Unfortunately, in Mexico the law is not always respected and this affects the well-being of these communities,” he explains. He says Mexico could be more open to companies that want to share expertise and collaborate as seeing other people’s experience and expertise can improve best practices. But he says small steps are being made to lay the foundations. “Large companies in Mexico are doing this more and more each day,” he says. “Joint ventures and developing legal and financial relationships with global companies are beneficial steps.”