Ramón Dávila
Economic Development of Durango
View from the Top

Security, Certainty Magnets for Investment

Wed, 10/16/2019 - 13:02

Q: US$1.75 billion is expected to be invested in Durango in 2019. What percentage of that investment will go to mining and what state measures are boosting the industry?
A: Of that investment, US$100 million corresponds to mining and most of that has been destined to the expansion of existing mining operations, especially for the installation of new equipment. We are working to provide facilities to companies that want to settle in Durango through good infrastructure and logistics solutions. We have focused on training the best possible workforce. We have developed a program with state universities to train technicians who can cover the needs and demands of the industry. Security is another area of focus. Today, Durango is considered the third-safest state in the country. All these factors help us to provide stability to companies that decide to set up and operate here.In addition, we offer incentives. When a company decides to establish in Durango, we try to help it through different incentives related to their activity, like the elimination of the payroll tax, which has a maximum duration of six years depending on the investment the company is willing to make.
Q: What percentage of Durango’s GDP is represented by mining activity and what needs to be done to promote it?
A: Although Durango is the third-ranked state for silver production and fourth in gold production, the mining industry accounts for six percent of the state’s total GDP. I think we are missing a great opportunity that can help the state economically, especially in areas where there are no other economic alternatives. Unfortunately, mining investment arrives when positive results are obtained during exploration, which should be encouraged by the federal government. In other words, without exploration, there is no investment. A good solution would be to make exploration deductible, since if there is no exploration, we run the risk of depleting our reserves and then it will be too late.  
Q: What concrete actions has the State of Durango taken to achieve the levels of security that it enjoys?
A: The most important thing is to work hand in hand with the three levels of government, as coordination between these levels is key to achieving objectives. We have also implemented zero tolerance regarding any conflict that may arise. This has eliminated the domino effect we have seen on other occasions.
Q: What can the Government of Durango do to minimize the impact of declining mining profits and avoid situations like those in San Jose de Avino?
A: The Government of Durango acts as a mediator in the resolution of conflicts that may occur in the state. It is about acting as external agents to help solve problems that may occur between operators and communities.
Q: What is your opinion on the federal government’s idea to prioritize popular and indigenous consultations when granting new mining concessions?
A: I believe the federal government should provide investors with certainty. Certainty attracts capital. For this reason, we have been in contact with the federal authorities to ask for certainty for investors, instead of generating concern. To carry out the message launched by the government, it is necessary to reform the Constitution and we believe that we are very far from that.
Q: What impact will new legislation regarding the Mining Fund have on the economic activity of Durango?
A: The spirit of the Mining Fund was to provide an economic return to communities during mining operations. If the spirit with which this Mining Fund was created is distorted, what will be generated is a concern in the communities that could lead to social conflict. For this reason, we must be very careful. The Ministry of Economic Development of Durango has always declared that the Mining Fund is not a tax, it is a mean for mining communities to improve their infrastructure.