Sonora at the Forefront of the Mining IndustryMon, 10/21/2013 - 10:30
Q: How does the Government of Sonora stimulate mining investment, and what are the features that make the state so attractive for mining?
A: The Government of Sonora is focused on providing mining investors with the geographical infrastructure they need, such as charts and physical mineral inventories. This infrastructure is of great importance to investors because with this information they can visualize the areas they are interested in and save large amounts of money. In this sense, there is very good collaboration between Sonora and the Mexican Geological Survey (SGM). Other important factors that contribute to making Sonora a good location for mining investment are its geographical location, connectivity through modern highways, five airports, and a maritime port. We also have universities that offer majors related to Earth Science, as well as American consulates in Hermosillo and Nogales.
Hermosillo is close to 40 main mining units and 60 minor ones. This facilitates access to the mines and logistics for the people running the project. The state has one of the biggest copper deposits in the world, in the Cananea municipality. Sonora produces 78% of Mexico’s copper production, and it is estimated that Buenavista del Cobre will become one of the world’s main copper producing mines by 2015.
Q: What is the state government’s role in positioning Sonora as the country’s leading mining state, and what are the characteristics of the business environment that have enabled its consolidation?
A: Sonora’s business environment is very healthy and safe. Besides providing the infrastructure required to attract investment, we also provide technical and legal consulting services, mostly to small and medium-sized businesses. In terms of mining management we have a special office that is dedicated exclusively to dealing with conflicts and other mining issues. These services are very much in demand by the companies, because we support them through the permitting process and, if required, we can also work with companies seeking to resolve community conflicts. We are also involved in training programs, which we offer to the mining sector through the state’s universities and federal government. Mining activities take place in regions where it is difficult for other industries to develop, thus supporting the economies of the local communities, which are usually based on ranching and agriculture. The government focuses on providing technical consulting, with the aim of evaluating the small producers’ projects, which in most cases do not have the resources to conduct these types of evaluations themselves. In Sonora, smallscale mining activities are concentrated around the extraction of anthracite coal, graphite and silica. Currently, the state government is developing an integral program to support the coal subsector with the aim of regulating it and thereby ensure that it operates in line with the current safety, health, labor and environmental legal framework. We are conducting a study to analyze the mineral quality, as well as to obtaining information about the working characteristics.
Q: How do mining activities impact Sonora’s economic, labor and social environment?
A: Sonora is the number one mining state in Mexico, with mining generating over 16,000 direct jobs and around 80,000 indirect jobs in the state. Companies are taking advantage of the state’s resources and currently more than 5,000 mining concessions have been assigned. Mining is the second most important economic activity for the state, accounting for 7% of its GDP, and we are the leading national producer of gold, copper, molybdenum, graphite, anthracite coal and wollastonite. Currently, 25% of Sonora’s territory has been explored. The state territory has a high concentration of metallic and non-metallic minerals such as gold, silver, copper, molybdenum, zinc, anthracite coal, graphite, wollastonite and gypsum.
The mining industry has always been very important for the state, nevertheless it has become even more relevant as a result of the most recent boom. It is important to keep in mind that the sector is cyclical and right now we are experiencing a lot of progress, even though prices have gone down. The industry faces difficult challenges; the companies that will survive will be those that use state of the art technology, strengthen their human capital and remain at the forefront.
Q: What is the state government’s role in the creation of the mining cluster and what strategies have been established together with companies and universities to strengthen the mining cluster and industry in the state?
A: The state government initially suggested the creation of the cluster project. We have developed many activities such as supply chain events (focusing particularly on supplier development, which was the main reason for creating the cluster) and connecting mining companies with universities for the development of human capital, as well as connecting companies with public safety agencies.
The goal of grouping together all of the companies that belong to the mining industry in the state is to contribute to the economic development of the regions where they operate, through communication, development and organization of the local suppliers that hold the sector together. The idea is to maintain inner commerce and boost the economic development of local companies. Some of the companies that work with our programs are Yamana Gold, Timmins Gold, Alamos Gold, Agnico Eagle Mines, Minera Mexico, Argonaut Gold and SilverCrest Mines, among others.
The Sonora Mining Cluster is formed by a number of mining companies and suppliers. We have around 40 medium to large companies and 60 smaller ones. More than 200 registered mining chain suppliers have registered for the events we have organized.
Q: What support and advice does the Directorate for Mining offer mining companies in Sonora to help them to withstand market volatility?
A: The most important thing is to be at the forefront in terms of technology and processes. Another thing that is crucial is to comply 100% with the current legal framework. For example, the industry is facing many challenges in terms of environmental protection, and there are many organizations that oppose the industry and try to discredit it. Unfortunately, a lot of people are not aware of the many benefits that the industry brings to local communities, at every level. Additionally, they are not aware of the importance of mining in the industrialized world: without it many of the components required to build houses, technology and even for medical purposes would not exist.
My advice to all companies is to never stop their exploration activities. It is the lifeblood of all mining activities. Another important issue that must be addressed as a group is to effectively communicate the industry’s participation in social and economic development.