Francisco José Quiroga Fernández, Undersecretary of Mining in Mexico • Interview

Under Mexico’s current administration, mining looks forward to a much-needed upgrade in government support.

The current administration looks at mining not only as a sector that can generate jobs and economic activity in remote regions but as a competitive lever for manufacturing in the country. Mexico is a manufacturing power. The industrial sector in Mexico can benefit from locally extracted mining inputs such as copper, silver, or iron. We want the sector to generate foreign exchange through exports and become a source of competitiveness when integrated into other manufacturing chains across the country. We believe in a future dominated by electromobility and other similar technologies. All of this will require certain metals and minerals, which is why it is crucial to develop a strong mining industry. Mexico is a large producer of metals and minerals and has important metal deposits with great potential such as lithium, gold, silver, copper, zinc, and nickel. We want the mining sector to be a lever of competitiveness for productive chains rather than just being an export sector. We do not want a forced integration to maximize national content, but an integration that generates value and competitiveness.

What can Mexico do to become more competitive over other mining markets in the region?

The most relevant cost and risk elements are paperwork, security, and road infrastructure, and we have dedicated ourselves to improving these risk elements for mining operations in Mexico. Additionally, insecurity is a multidimensional issue that greatly impacts companies, which involves unions, local authorities, and communities. We are working in a coordinated effort to improve the security situation. The process becomes easier if the companies have a security specialist with sufficient decision-making power to carry out initiatives jointly with us. We have made important advances by connecting with certain counterparts that are informed and have the decision-making power to operate together.

Another challenge facing Mexico is the lack of large mines being developed to replace depleting projects. What is needed in Mexico to further promote investment in exploration?

This is a global trend and phenomenon. In Mexico, it is already several years old. To address it, the Mexican Ecological Service has redefined its strategy to act not only as a deposit of technical, scientific, or geological information but also as a lever of competitiveness for the mining sector, by generating useful information. Second, we are aware that exploration activities in Mexico are not immediately deductible as a tax expense. Investors also lack confidence in the rules. This distrust is justified to some extent because in the recent past, previously marginalized actors have been empowered. We must reach agreements with these newly empowered players on how to build an environmentally sustainable and socially inclusive mining sector.

We will continue improving the permit process. We want a simple procedure where there is minimal human intervention to prevent corruption. To that end, we are working on a digital system. We want the same to happen with the regulations that exist outside our direct field of action, as they also affect mining. We are working with other government authorities to do this. We are evaluating mechanisms for the solution of bottlenecks so that a struck project is treated in the most practical way possible. In 2020, we will continue consolidating a system of coordination between dependencies and the government.

What support can investors expect from the public sector?

We are committed to the development and growth of the mining sector in Mexico, and investors can expect timely support from us. We have assembled a team that can offer timely support in matters of security, tax, operations, communication, community relations, compliance, and environmental protection. We are applying a practical approach to promote projects. We are convinced of the value and potential of the mining sector and are willing to do everything to ensure the success of mining projects in Mexico. ✖