As you know, PDAC’s Annual Convention and Trade Show took place in the first week of March in Toronto, attracting exhibitors and visitors from around the world. With more than 25,000 attendees, the event confirmed one more time its international importPublished by: Villalobos & Moore Date: 2015-10-17
As you know, PDAC’s Annual Convention and Trade Show took place in the first week of March in Toronto, attracting exhibitors and visitors from around the world. With more than 25,000 attendees, the event confirmed one more time its international importance for networking, deal making and exchange of knowledge in all areas related to the industry.
While the pervasive comment during our stay in Toronto was the weakness in precious metals prices, the Mexico Mining Day Conference highlighted the relevance of Mexico as a competitive place to invest in the mining sector.
As known by all, precious metals prices are expected to maintain their downward adjustment in the coming years, the World Bank expecting a decline in about 2% in 2014 and 1% in 2015. Given the market circumstances, the Mexican mining sector faces important challenges that may be overcome through investment in technologic development for the improvement of processes to increase productivity, reduce costs and consolidate sustainable and social responsible mining.
In the diverse conferences related to our country, the Mexican government informed that it has formulated a strategy with four main objectives in mind to improve our standing in the mining sector:
1) To promote higher levels of investment and competitiveness in the mining sector (promoting Mexico as an investment destination, creating mining clusters, increasing the quality of information of mining projects, providing technical and geological information to boost investment, etc.)
2) To provide increased funding to the mining sector and its value chain (seeking to detonate mining projects of great impact, financing environmental preservation projects, financially supporting the market of minerals, etc.)
3) To encourage the development of small and medium scale mining, as well as social mining (supporting the exploration and evaluation of projects of small and medium mining and providing funding for exploitation projects including training)
4) To modernize the institutional regulations for the sector and to improve the processes related to mining concessions (adapting regulatory provisions in order to provide greater legal certainty and to simplify and streamline procedures by implementing technological tools)
The competitive advantages of Mexico in comparison with other mining jurisdictions, which should be considered by mining companies in the current market circumstances include:
1) Macroeconomic stability shown in record international reserves and low inflation
2) Competitive cash costs
3) World class geological services
4) Geological potential with well defined belts of known mineralization and metallogenic provinces;
5) Competitive infrastructure in border crossings, harbors, international airports, railways and roads
6) An important export platform consisting of being part of the world´s largest economic block (NAFTA) and having in place a great number of free trade agreements that give Mexico access to 45 countries in the world, greater access than countries such as the United States, India, China, Canada, Japan, Australia, Colombia and Peru.
Mining is, by definition, an industry that has historically faced great and many challenges. Challenges have been overcome and the current market situation should not be the exception. Mexico, with its competitive advantages, should be ready to convert current challenging circumstances in an opportunity of growth.
Villalobos & Moore, Business Lawyers at the service of the mining industry.