Undersecretary Offers Opportunities for Service ProvidersSat, 12/01/2018 - 14:46
Q: How have changes in commodity prices in 2016 and the early part of 2017 impacted service suppliers like Detector Exploraciones?
A: For service providers like ourselves, the rise in prices has been a great boost because operators and explorers alike are starting to ramp up drilling programs to increase reserves. We are seeing a lot more contracts on the table and more jobs on offer for workers across the value chain. For the past three years we have been working mainly with operators such as McEwen Mining at the El Gallo complex in Sinaloa.
Major mining companies will not consider developing a deposit smaller than 1 million gold ounces and they must constantly work to increase the reserves and mine life of their operations. Our technology can provide accurate 3D models and other geological data that mine operators use to explore around a producing asset so we have been delighted to see confidence return to the sector.
Between 2015 and 2016, the company managed to increase the total meters drilled by 30 percent. With more and more exploration projects being launched on a consistent basis, we hope to further increase this number by 20 percent to 200,000m in 2017.
Q: What changes do you expect to see following the creation of the Undersecretariat of Mining?
A: The change was made with the best interests of the Mexican mining sector at heart. The new Undersecretary for Mining should open a whole range of opportunities to service providers but the whole community has a duty to work together to resolve the issues that affect us all. The public sector of course influences the industry and plays an important role in attracting investment and facilitating the operational business environment but the responsibility for solving the problems of mining companies is on the shoulders of the companies themselves. It is fantastic that the federal government is placing more importance on the mining sector but it does not mean that all of the industry’s issues will disappear overnight.
Q: Given the wide range of services that Detector Exploraciones provides, which does your Mexican client base demand most?
A: We have particular expertise in exploration. The company makes considerable investments in drone technology as well as training for geologists, engineers and mechanics. Our drone technology was used by Goldcorp at the Peñasquito mine in Zacatecas. We managed to complete an exploration program, which would usually take one year, in just four months. We completed a 70km flight scanning all the local terrain, borders and infrastructure in just three days. This enabled the client to gain accurate georeferential information about the surrounding area and to make the necessary payment arrangements immediately.
We are also proud of the extensive training we offer our workers to ensure that we are using state-of-the-art technology. Otherwise we will not be able to compete with other mining jurisdictions.
Q: As a service provider, what are the most pertinent challenges facing your business at the moment?
A: Aside from security, which is a huge issue for the entire country, the most pertinent challenge we face is the delay in receiving drilling permits in certain parts of the country. There have been many cases where we have identified a strong deposit, we have the equipment and the contract to commence work but it can take months or sometimes years to obtain all the necessary legal and environmental permits required to start operating. Then, once the permits have been obtained, often the external circumstances have changed and the project is no longer viable. Another area that can be improved is land ownership. Since the Energy Reform, electricity companies and other power generators have clear guidelines on how to use land and work with ejidos but the mining sector is still stuck in the past.