IMPACT REPORT
MEXICO MINING FORUM 2021
Livestream Sponsor
Networking Platform Sponsor
Gold Sponsors
Silver Sponsors
2021 For centuries, the Mexican mining industry has demonstrated to be an important driver of the Mexican economy and a catalyst of progress in rural areas. Despite a global pandemic and an economic crisis of unparalleled dimensions, miners, stakeholders, communities and government entities have all come together in unison to discuss the challenges to be overcome in order to strengthen the country´s mining sector.
In an effort to develop and bolster the country´s mining industry during the pandemic, companies decided to comply and enforce all sanitary protocols mandated by the government, while applying new technologies that became a driving force in the reactivation of the Mexican economy.
During the first virtual edition of Mexico Mining Forum 2021, over 400 industry leaders convened in a three-day summit to highlight the industries´ latest developments and trends, investment opportunities as well as the country´s operating environment. The forum also provided unique networking opportunities through the intent-based, AI-driven matchmaking technology platform Brella.
Whether it be the road to decarbonization or best practices for the mining industry of the future, the stage has been set, and the Mexican mining sector will prove once again to itself and to the world, that despite the many challenges, its stakeholders, communities and leaders will prevail.
4
C O N F E R E N C E I M PAC T CONFERENCE IMPACT
243 companies 76 speakers
How would you rate the quality of the conference program and speakers?
10% Greatly exceeds expectations 46% Exceeds expectations 39% Meets expectations 5% Below expectations
Breakdown by job title
8.2% President/ Board member/ Partner 11.9% CEO/ Director General/ General Manager/ Country Manager 10.4% VP/ CFO/ COO 16.5% Director 38.1% Senior Manager/ Manager 7.0% Scientist/ Geologist/ Engineer/ Analyst 7.9% Associate/ Executive
12 sponsors
462 conference participants
7,155 visitors to the program on MBE website
CONFERENCE SOCIAL MEDIA IMPACT
PRE- CONFERENCE SOCIAL MEDIA IMPACT
8,147 direct impressions during MMF
141,253 direct pre-conference LinkedIn impressions
4.38% click through rate during MMF
4.84% pre-conference click through rate
40,100 direct impressions during MMF
115,200 direct pre-conference Twitter impressions
BRELLA
Mexico’s leading B2B conference organizer introduces the world’s leading event networking platform. Delivering intent-based matchmaking powered by Artificial Intelligence that connects the right people. Network, no matter where you are.
3,456 matchmaking communications
401 participants
How would you rate the quality of the matchmaking on Brella?
367 1:1 meetings conducted
7% Greatly exceeds expectations 22% Exceeds expectations 63% Meets expectations 7% Below expectations
MATCHMAKING INTENTIONS
2,562 Networking 1,719 Trading Total
4,864
454 Recruitment 129 Investment
5
6
C ompany Attendance • Engie
• Accendo Banco
• Colegio de Ingenieros de Minas, Metalurgistas y Geólogos de México
• Acermex11
• Colorado School of Mines
• Actlabs (Activation Labs)
• Compañía Minera Autlán
• AddOns Inc
• Compañia Minera Pangea
• Agnico Eagle
• COMSA Mexico
• Alamos Gold
• Concilia Asesores y Servicios
• Alien Metals
• Consorcio Minero Benito Juarez Peña Colorada
• Financial Times
• Construcciones DIMCO
• First Majestic Silver Corp.
• Altadore Energia
• Contrissa
• FLSmidth
• Americas Mining Corporation
• Cooper Aerial Surveys Co.
• FLSmidth - CYSS
• Applied México
• Cormax Rigging Supply
• FullSpectrum Leadership
• ArcelorMittal México
• CRUX Investor
• Gatos Silver
• Argonaut Gold
• CTA Environmental Consultants / WIM Central America
• GED
• ABB
• Almaden Minerals Ltd/ Minera Gorrión
• Arizona Trade and Investment • Asociacion de Mineros de Sonora AC
• Cyanco • CyPlus Idesa
• Aura Minerals
• Danfoss Drives
• Austin Bacis
• DBR Law
• Austin Powder Mexico
• Defiance Silver
• AXTER
• Desarollos ROD
• Beumer de Mexico
• DeSK Mexico
• Boart Longyear
• Discovery Metals
• Bureau Veritas Minerals
• Don David Gold México
• CAID
• Driver Industrial
• Call & Nicholas
• DrM Dr. Mueller AG
• CAMIMEX
• Drones Pro México
• CAMSO
• Dumas Mining / Grupo Mineri Dumas
• CANCHAM • Candelaria Mining Corp • Capitan Mining • Carrizal Mining • Centric Mining Systems • Chemours • Chesapeake Gold • CI Group • CIMA Consultores Ambientales • CIMMGM • Clariant Corporation • Clusmin • Clúster Minero de Sonora • Coast Capital Management • Coeur Mining
• EagleBurgmann México • EC RUBIO • Eclipse Mining Technologies • Eco-Edge • El Tornillito • Elara Comunicaciones • Eleven Mercantile • Embajada de Francia • Embassy of Canada in Mexico • Emerson • Empresas Seijo • Empress Royalty • Endeavour Silver • Énestas
• EPIROC • EPSA - Excavaciones y Proyector de Mexico • Equinox Gold • Equipfix • Exterran • FIFOMI
• GEOSERVIX • GFS Corp • GIW Industries • Globexplore • Gobierno de Ontario en Mexico • Gogold Resources • Gold Resource Corporation • Golden Minerals Company • Golder • Gonzalez Calvillo • GR Silver Mining • Great Panther • GRID Arendal • Gruminex Soluciones para Mineria • Grupo Camacho Fire • Grupo Comercial de México • Grupo México • Gustavson Assoc. • Hanwa American Corp • Hanwa Co. • Heiras Abogados • Hexagon Mining • Hogan Lovells • Hubbell Products Mexico • Iberdrola • IHS Markit • IMR Bonanza • IMR Resources
C ompany Attendance • Industrial Minera México
• Peña Colorada
• Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF)
• Peñoles
• International Council on Mining and Metals (ICMM)
• PPG Industries
• Jáuregui y Del Valle
• Pizarro-Suárez & Bandala
• Premier Gold Mines
• JET Process Solutions
• Principles for Responsible Investment (PRI)
• Jogmec
• PROESMMA
• John Crane México
• PROMIMEX
• Juntos Shell & Quakerstate
• Ptolemy Capital
• Kautiva
• PwC
• Kiewit
• Quadrant Comunicación
• Kootenay Silver
• Reconstructora Alpha
• KSB de Mexico
• Relyon Nutec Mexico
• KSB/GIW México
• Reyna Silver
• Kuatro Modulares
• Rhea Management
• Laron
• Riverside Resources
• M3 Mexicana
• Robit
• MacLean Engineering
• Robit Group.
• MAG Silver
• Rockwell Automation
• Magna Gold Corp
• ROSEN
• MAPLE
• Roshfrans
• MaquinasM
• Sandvik Mining and Construction de Mexico
• Metallorum • Mexico Business • Mexico Minero • Michelin • Minera Alamos • Minera Frisco • Minera Media Luna • Minera Media Luna • Minera Zalamera • MineSense Technology • Mining • MJG Capital Fund • New Gold • New Zealand Trade & Enterprise • Newmont
• Sandvik Mining and Rock Solutions
• Society for Mining, Metallurgy & Exploration (SME) • Solenis Technologies • Solum Consulting Group • Sonoro Gold Corp • Southern Silver Exploration Corp. • Southwest Microwave • Spencer Stuart • SRK Consulting • Strand Hanson Limited • Sumitomo Corporation • Sysmantec • TAKRAF • TBC&SK Ciberseguridad • Techint E&C • Telson Mining Corporation • TEMISA • The Chemours Company • The Electrum Group • The Silver Institute • Thermo Fisher Scientific • ThyssenKrupp Mining Technologies • Tinto Roca Exploraciones • Torex Gold
• Sandvik Rock Processing Solutions
• Toronto Stock Exchange & TSX Venture Exchange
• Santacruz Silver Mining
• Tubos y Barras Huecas
• Sapuchi Minera
• Tuto Power
• Saving With Energy Mexico
• Unidad Minera Pinos AltosCrestón Mascota
• Schneider Electric • Secretaría de Economía
• United Nations Environment Programme (UNEP)
• SEFAR
• University of Saskatchewan
• Seijo Explosives
• Victaulic
• SEMARNAT
• Vulkan do Brasil
• Servicio Geológico Mexicano
• Walworth
• SEZAC
• Wartsila
• SGS
• Wenco International Mining Systems
• O’Gorman&Hagerman
• SHELL & QUAKER STATE MEXICO
• Orion Productos Industriales
• Shell Lubricants
• World Gold Council
• Orla Mining
• Silver Crest Metals
• WorldWise Coaching
• Pan American Silver
• SKF Mexico
• Yokohama
• Parker Hannifin
• Skyline Laboratories&Assayers
• WIM Mexico
7
8
P rogram
FEBRUARY 10 TH , 2021
08:00
NETWORKING OPPORTUNITY - AI-POWERED 1:1 MEETINGS
08:45
WELCOME TO MINING FORUM 2021 - DAY 1
08:50
MEXICO MINING UPDATE Mtra. Tatiana Clouthier Carrillo, Minister of Economy at Mexican Federal Government
Speaker:
09:00
2021: A YEAR OF REBIRTH FOR MEXICO’S MINING INDUSTRY? Moderator: Esther Arzate, Coordinator of Mexico Minero Panelists: Armando Alatorre Campo, President of CIMMGM Armando Ortega Gómez, President of the Mining Task Force at the CANCHAM Doris Vega, VicePresident of Women In Mining Mexico (WIM Mexico) Fernando Alanis, President of the Mining Chamber of Mexico (CAMIMEX) Paola Cazares, Health, Safety and Environment (HSE) Manager, Mexico at Agnico Eagle
10:00
BEST PRACTICES FOR THE MINING INDUSTRY OF THE FUTURE Moderator: Henry Sanderson, Metals & Mining Correspondent at the Financial Times Panelists: Isabelle Ramdoo, Deputy Director of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) Dolores Barrientos, Mexico’s Representative of United Nations Environment Programme (UNEP) Robert Schafer, President of Society for Mining, Metallurgy & Exploration Inc (SME) Aidan Davy, COO of the International Council on Mining and Metals (ICMM)
11:00
MEXICO AS A JURISDICTION: RISKS & OPPORTUNITIES IN TODAY’S BULL MARKET Moderator: Matthew Gordon, Founder of CRUX Investor Panelists: John-Mark Staude, CEO of Riverside Resources Jorge Ramiro Monroy, CEO of Reyna Silver Alberto Orozco, CEO of Capitan Mining Doug Cavey, VP of Corporate Development at Defiance Silver Robert Macdonald, VP Exploration at Southern Silver Corporation David McKinlay Jones, President & Founder of Minera Zalamera
D AY 1
12:30
NETWORKING OPPORTUNITY - AI-POWERED 1:1 MEETINGS
13:00
ESG CRITERIA AND TECHNOLOGICAL DEVELOPMENTS KEY FOR TOP MINES Moderator: Dean McPherson, Head, Business Development - Global Mining at TMX Group Panelists: Ralph Shearing, CEO of Telson Mining Corporatio Bradford Cooke, CEO of Endeavour Silver Jason Simpson, CEO of Orla Mining Eric Fier, CEO of SilverCrest Metals Warren Rehn, CEO of Golden Minerals Company Stephen Orr, CEO of Gatos Silver Taj Singh, CEO of Discovery Metals
14:30
NETWORKING OPPORTUNITY - AI-POWERED 1:1 MEETINGS
15:00
THE ROAD TO DECARBONIZATION: INNOVATIVE HAULAGE SYSTEMS Moderator: Verónica Martínez, Senior Programme Officer - Innovation and Climate Change at ICMM Panelists: Fred Stanford, Chairman of Torex Gold Resources Andre Barriault, Product Manager Electric Vehicles at Epiroc Koen Langie, Head of Mining Program at Engie’s Hydrogen Business Unit Jason Green, President and CTO at GFS Corp Brian Huff, VP of Technology at Sandvik
16:00
NEWMONT: ESG PRACTICES FOR ROBUST BUSINESS OPERATIONS AT PEÑASQUITO Moderator: Karen Flores, Director General of the CAMIMEX Panelists: Peter Hughes-Hallett, Country Manager Mexico at Newmont Bernard Wessels, Peñasquito’s General Manager at Newmont Juan Reynaud, Peñasquito’s Head of Human Resources at Newmont Doris Vega, Communications Manager Mexico at Newmont
16:00 Panelists:
FLSMIDTH DIGITALIZATION Alejandro Espejel, Head of Smart Services at FLSmidth Alejandro Herrera, Mining Sales Director Mexico & CA at FLSmidth
17:15
NETWORKING OPPORTUNITY - AI-POWERED 1:1 MEETINGS
19:00
END OF DAY 1
9
10
P rogram
FEBRUARY 11 ST, 2021
08:00
NETWORKING OPPORTUNITY - AI-POWERED 1:1 MEETINGS
08:55
WELCOME TO MEXICO MINING FORUM 2021 - DAY 2
09:00
PRECIOUS METALS MARKET & THE ESG INVESTMENT REVOLUTION Moderator: Elena Espinoza, Acting Head of Social Issues at Principles for Responsible Investment (PRI) Panelists: Terry Heymann, CFO of the World Gold Council Javier Reyes, Chairman and CEO of Accendo Banco Matt Geiger, Managing partner at MJG Capital Fund Michael DiRienzo, Executive Director of The Silver Institute James Rasteh, Partner at Coast Capital Management
10:00 Panelists:
THE VISION BEHIND PRECIOUS METALS COMPANIES’ SUCCESS Isabel Adame, Mining Industry Director of Mexico Business Jason Simpson, CEO of Orla Mining Raj Kang, CEO of Kootenay Silver Doug Ramshaw, President of Minera Alamos Kenneth MacLeod, CEO of Sonoro Gold Corp
11:00
EXPERT GUIDANCE FOR BUILDING AN INTEGRAL MINING PROJECT IN MEXICO Moderator: José Rafael Jabalera, Mine Development Director at Mexico’s Ministry of Economy Panelists: Flor de María Harp Itubarría, Director General of the Mexican Geological Service (SGM) Gabriela Esperanza Milán, Director of Mining at the Ministry of Environmental and Natural Resources (SEMARNAT)
12:00
12:30
NETWORKING OPPORTUNITY - AI-POWERED 1:1 MEETINGS
ADVANCED CONTROL OF MINING OPERATIONS: FROM DATA TO KNOWLEDGE Moderator: Alexis Perrusquía, Regional Marketing Supervisor LATAM at Thermo Fisher Scientific Panelists: Juan Carlos Cruz, FSI Product Specialist at Thermo Fisher Scientific Rodrigo Rosales, PA Product Specialist at Thermo Fisher Scientific Marcial Hernández, Field Service Supervisor at Thermo Fisher Scientific Yazmin Sánchez, Channel Manager Environmental Monitoring at Thermo Fisher Scientific Leonardo Salazar, Application Specialist at Thermo Fisher Scientific Eduardo Alcántara, Channel Manager BEA at Thermo Fisher Scientific
D AY 2
14:00
SETTING A HIGHER STANDARD: PROACTIVE SAFETY MEASURES IN MINE PLANNING Moderator: Mick Routledge, COO of Coeur Mining and Chair of SME’s Health and Safety Division Panelists: Luz María Sánchez, General Mine Manager at Carrizal Mining Alan Pangbourne, CEO of Chesapeake Gold Ivan Montiel, Director of Operational Strategy and Development at Agnico Eagle Jesús Vargas, Head of Industrial Safety at Minera Autlan
14:00
NETWORKING OPPORTUNITY - AI-POWERED 1:1 MEETINGS
15:00
TECHNOLOGY FOR SAFER AND MORE SUSTAINABLE TAILINGS Moderator: Kim Morrison, Global Manager of Tailings at Newmont Panelists: Elaine Baker, Global Tailings Dam Portal Project Expert, GRID-Arendal Mitchell Krebs, CEO of Coeur Mining Bradley Langille, CEO of Gogold Resources
16:00
INTERNATIONAL PERSPECTIVES OF COVID-19 Moderator: Jesus Romero, Senior Consultant at Golder Panelists: Jody Kuzenko, CEO of Torex Gold Resources Arturo Bonillas, CEO of Magna Gold Corp John McCluskey, CEO of Alamos Gold Steve Holmes, COO of First Majestic Silver Corp
17:00
NETWORKING OPPORTUNITY - AI-POWERED 1:1 MEETINGS
19:00
END OF DAY 2
FEBRUARY 12 ND , 2021
09:00 Speaker:
MINING: KEY PILLAR FOR MEXICO’S ECONOMIC REACTIVATION Fernando Alanis, President of the Mining Chamber of Mexico (CAMIMEX)
11
12
M ED IA COV ER AG E S N A P S H OT
Visit: www.mexicobusiness. news/tag/mmf-2021
Minería en Línea • La titular del Servicio Geológico Mexicano en Mining Forum 2021 • Se prepara mesa de dialogo entre el gobierno federal y el sector minero
El Financiero Minería en México debe convertirse en una actividad sustentable: Tatiana Clouthier
BNAmericas • Expertos definen desafíos clave para el sector minero mexicano en 2021 • Experts outline key 2021 challenges for Mexico’s mining sector
M ED IA COV ER AG E S N A P S H OT Al momento DIARIO EJECUTIVO: La minería: polémica como siempre
El Economista Secretaría de Economía mantendrá mesa de diálogo sobre minería: Tatiana Clouthier
Milenio Economía instalará mesa de diálogo con empresas mineras para abordar reactivación
La Jornada Reclama industria minera al gobierno falta de atención al sector
Mining Journal Haul truck decarbonisation coming soon
13
14
H ighlights MINING: ESSENTIAL INDUSTRY FOR MEXICO Mexico’s Minister of Economy Tatiana Clouthier Carrillo said 2020 was a very challenging and difficult year for the world. Mexico was no exception. The minister welcomed approximately 700 people to Mexico Mining Forum 2021 on Wednesday, Feb. 10, hosted by Mexico Business News. “We expect the industry will continue to face past challenges, in addition to the new ones, in 2021.” Clouthier applauded the mining industry’s efforts toward reactivating Mexico’s economy. She explained that mining is an important industry for the country, since it represents around 3.2 percent of Mexico’s GDP. Moreover, in 2019, the Mexican mining industry generated 379,000
“To boost ESG practices, there needs to be collaboration between the society, government and the mining industry.” Tatiana Clouthier Carrillo
Mexico’s Minister of Economy
direct jobs, benefitting miners and contributing to their family’s earnings. The number of employees has increased, especially as a result of indirect jobs created by the industry, said the minister. However, due to several crises, including COVID-19, the mining industry is bound to face challenging times. Clouthier reported that the Ministry of Economy has invited small, medium, and large companies, as well as the corresponding associations, to find common solutions within a legal framework to reactivate initiatives that will benefit Mexico’s economic development. Furthermore, Clouthier said the COVID-19 pandemic highlighted the importance of the sector and the need for it to become a sustainable activity that oversees and protects the economy, workers and the environment. “To boost ESG practices, there needs to be collaboration between the society, government and the mining industry,” she said.
2020: A YEAR FULL OF CHALLENGES FOR THE MINING SECTOR Tatiana Clouthier Carrillo, Mexico’s Minister of Economy, welcomed nearly 700 people to Mexico Mining Forum 2021 on Wednesday, Feb. 10, hosted by Mexico Business News. She highlighted the importance of the Mexican mining industry, which currently represents close to 3.2 percent of Mexico’s GDP. In 2019, the country generated 379,000 direct jobs, benefitting miners and contributing to their family’s earnings. Following Clouthier, Esther Arzate, Coordinator of Mexico Minero, introduced the panel “2021: A Year of Rebirth for Mexico’s Mining Industry?” focused on the main challenges the industry faced in 2020 and the strategies that institutions implemented to address them. “The most important thing in 2020 was the Senate’s initiative to nationalize lithium. Should this continue, it could have negative effects on mining, since the bill lacks reliable information,” said Armando Alatorre, President of Colegio de Ingenieros de Minas, Metalurgistas y Geólogos de México (CIMMGM). Alatorre said there are many misconceptions regarding lithium and
its benefits for Mexico, which is why CIMMGM has provided an extensive analysis detailing the most important points of the bill initiative and those that lacked valid information. Recently, Alatorre also shared with MBN new about AIMMGM’s, own forum held on Nov. 11 titled “The Truth About Lithium in Mexico,” where a panel of mining experts shared their points of view on the matter and said that despite lithium’s global importance, Mexico’s geological possibilities in this area are, at best, limited. During today’s forum, Armando Ortega, President of the Mining Task Force at CANCHAM, explained that the 2012 Labor Reform was significant in Mexico, since it consolidates freedom of association. Ortega also addressed the dangers that exist in the rapid mechanisms regarding labor conflict resolution that Mexico committed to during USMCA negotiations. “If companies breach any labor rights, this will have an impact on trade. The affected country will be entitled to impose custom sanctions, so certain minerals and byproducts cannot be exported.” One of the upcoming challenges for the sector are that, due to political reasons, some
H ighlights members of the mining industry will be accused of violating labor rights. Ortega recommends focusing on what companies and the sector can control, which is to have an impeccable control over labor rights, as well as open and clear communication with labor unions. In a recent interview with MBN, Ortega said USMCA also represents a chance for Mexico to strengthen its position in the metals value chain. Ortega explained that even if mining is not expressly included in the agreement, the industry is at the base of the economy and anything that promotes regional trade will result in a boost for mining. “Adapting to a new reality in 2020 was a major challenge. We need to adapt to new technologies and make good use of them,” said Doris Vega, Vice President of Women in Mining Mexico (WIM). Vega explained that WIM has sought to adapt and work with new technologies to have greater contact with people and the media, as well as to implement new strategies to make women visible within the sector. WIM has also shared its expertise through webinars to train women. “Mining offers many opportunities for women and we must take advantage of them,” she said. The organization believes that having women in mining has contributed to changing the image of the sector by highlighting their importance for companies and operations. For Fernando Alanis, President of CAMIMEX, the mining industry shutdown and its classification as a non-essential activity was the biggest challenge in 2020. CAMIMEX, as a representative
of the mining sector, managed to get authorities to recognize the industry’s importance for Mexico’s economic development. Nevertheless, the two-month suspension affected the sector and the communities that depended on it. As a result, CAMIMEX elaborated a protocol along with the government, which forced the sector to reinvent itself and adapt to new challenges. “Today, we have seen that these protocols have been effective. Moreover, our priority during the COVID-19 pandemic has been the health of our workers and maintaining our employees,” Alanis said. Last year, CAMIMEX released the 2020 edition of its yearly report, emphasizing the mining industry’s commitment to the environment, society and communities. “It is of the utmost importance to highlight the true nature of the modern and professional mining industry that operates in Mexico. Mining is responsible and respectful of the environment. It is committed to the economic development of communities, regions and states where it operates. Mining develops supply chains and provides good jobs, access to education, health and basic services. It is an industry that ultimately boosts the quality of life of the inhabitants of our host communities,” Alanís said. Paola Cazares, Health, Safety and Environment (HSE) Manager Mexico of Agnico Eagle, said the company has focused on the implementation and development of safety protocols to help employees to feel safe at work. The company has provided food, health and safety supplies
15
16
H ighlights in communities nearby. “The company’s sustainability operations have continued and Agnico Eagle believes the implementation of ESG practices will be fundamental in the recovery of the sector,” she said. Back in 2020, Luis Felipe Medina, Director General of Agnico
“Adapting to a new reality in 2020 was a major challenge. We need to adapt to new technologies and make good use of them.” Doris Vega
Vice President of Women in Mining Mexico (WIM)
Eagle Mexico, told MBN that Pinos Altos had won an award for excellence in environmental restoration from the Mining Association of Canada, which is the first project in Mexico to receive this award. Alanis concluded the panel by saying that the challenges for 2021 will be COVID-19, the misconceptions of the mining sector that do not allow the population to see the true image and positive impact of the sector, as well as new legislative initiatives that directly or indirectly impact the sector and its position as one of the pillars of the country’s economic recovery.
SOCIAL , ENVIRONMENTAL BEST PRACTICES ENABLE MINE OF THE FUTURE On Wednesday, Feb. 10, experts discussed prevalent issues regarding how mines can improve their environmental, social and governance criteria and how they can utilize technologies to participate in a decarbonized society. “The mine of the future will have a fully integrated community and business environment, in which planning will occur beyond operation and toward closing, so the community can remain sustainable beyond the mine’s life, as well,” said Robert Schafer, President of the Society for Mining, Metallurgy & Exploration (SME) during the second panel of Mexico Mining Forum. This integration will become even more important in a context of global trends, including the energy transition and Industry 4.0. “This will have implications for local communities. Although most jobs will not necessarily disappear, we will need more skilled workers,” said Isabelle Ramdoo, Deputy Director of the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF). To avoid tension, companies need to manage the transition for local communities and help to foster opportunities to diversify away from the mining sector. Aidan Davy, COO of the International Council on Mining and Metals (ICMM), added that these changes alter the social contract between mining companies, communities and government. Governments traditionally cede their resources so mining companies can develop them and local communities hope to gain benefits in a more direct manner. If a changing industry alters
that relationship, new approaches need to be found. “We do not have the answers to these challenging questions, yet. But we are working and getting closer,” he added. Social issues, after all, are prevalent in the sector. “We have seen a significant number of disputes between mining companies and local communities,” said Davy. Most of these concentrate around decision-making and who owns the resources that are produced. To solve these tensions, the sector could adopt more inclusive decision-making processes. Good examples of harmonious cooperation between miners, communities and government already exist, where all three parties feel an appropriate degree of ownership and say in the decisionmaking process. A global transition toward renewable energy is also forcing mining operations to adapt. After all, mining is essential in its role to produce the necessary materials for clean energy production. “Lithium is a major component of solar panels,” said Dolores Barrientos, Representative Officer in Mexico of the United Nations Environment Program (UNEP), adding that solar energy is a crucial puzzle piece for climate commitments in 126 countries, which contribute to almost 50 percent of global carbon emissions. Barrientos said UNEP focused on improving the sector’s capability to prevent disasters and generate less pollution. “We also promote the circular economy, related to eco-design, recycling and re-use in the mining process,” she said. Even though mining is crucial in the clean energy transition, “this does not give mining companies
H ighlights a free pass to pollute,” Davy highlighted. As to whether mining operations themselves could make use of renewable energy to improve in this regard, he noted that this was very much dependent on the context and geography. He sees a lot of opportunity for solar in SubSaharan Africa, Chile and Peru, especially in the area of equipment where improvements can be made. “Mobile equipment offers a real area of opportunity, which in some cases represents 80 percent of a mine’s emissions,” he said, mentioning ICMM’s initiative for cleaner, safer vehicles in the sector. Schafer noted that hydroelectric and geothermal energy can provide clean electricity for mining operations, as well as wind and solar. However, the intermittent nature of renewable energy, which cannot be generated around the clock, needs to be taken into account. “Hybrid sourcing will be the most likely direction for the industry,” he said. Tech, including flow batteries, can be used to provide electricity. Hydrogen is a developing market of interest for the mining community, which can provide a promising future opportunity. Ramdoo agreed by highlighting that both cost and technological readiness of such technologies need to be taken into account for each operation. One additional benefit of employing renewable off-grid energy is the opportunity to share it with communities. “This is an opportunity to give power to people,” she said, noting that providing stable and clean electricity can help the community shift away from dependency on
mining alone, so people can generate their own jobs and participate in other industries. Another important area to address for mining companies is the mine’s surrounding ecosystem. Barrientos explained that natural protected areas and mining operations often get entangled. “This is a frequent issue around the globe, as these two areas constantly overlap. Around 11 percent of Mexican territory is under protected status,” she said. The Sierra Gorda in Queretaro is an important example. “The Sierra represents 25 percent of global mercury emissions, with 200 mercury mines working there and around 1,500 families involved.” Mercury has a negative impact on health and the environment, so UNEP is developing a 5-year plan to give these communities alternative economic possibilities. Barrientos highlighted that families involved in mining often want to change their economic activity to tourism and agriculture, but this can only happen if they get support. Different levels of government can play a role in enabling these efforts. Mining has also been involved in a great deal of deforestation in Mexican territory, which along with water pollution created two main issues for mining companies to address. “A great compromise is needed. Industries need materials to decarbonize but a balance is needed between mineral development and environmental protection,” Schafer said, adding that adapting new technologies will help miners decrease their footprint significantly.
17
18
H ighlights MINERS GET REAL ABOUT MEXICO’S MINING INDUSTRY A panel of stakeholders in the Mexican mining industry addressed the positive and negative aspects of the national investment landscape. These discussions took place during the third panel of Mexico Mining Forum 2021, titled “Mexico as a Jurisdiction: Risks and Opportunities in Today’s Bull Market.” The discussion was moderated by Matthew Gordon, Founder of CRUX Investor, who asked the panelists to rate Mexico as a mining investment destination. This set the tone for what turned out to be a very honest conversation about the benefits and hurdles the Mexican mining industry is currently facing. Most panelists rated Mexico between 3 and 4 in a scale from 1 to 5, with 5 being the best score. Alberto Orozco, CEO of Capitan Mining, gave a rating of 3.5 and said the country has enormous geological potential as it “is still in the early stages of its exploration maturity.” Orozco said Mexico provides “the ability to work yearround,” in contrast with other more seasonal jurisdictions such as Canada or Russia. While other panelists would be more critical of the ongoing regulatory issues in Mexico, Orozco said that all things considered, Mexico’s mining industry has “a legal framework that works.” However, he did make it clear that the industry was currently facing issues in the management of its “general administrative procedures,” which had to be addressed to “get the industry going.” “We need to digitize and expedite all administrative procedures so we can do business much more efficiently. Our system is still derived from what was built during the 1970s and it remains too paper-based,” Orozco said. Jorge Ramiro Monroy, CEO of Reyna Silver, agreed with Orozco regarding Mexico being very early in its exploratory maturity “despite a centuries-long history of strong exploration campaigns that go back to the Spanish colonies.” He gave Mexico a rating of 3.8, noting that the country’s geological potential is boosted by new exploration technologies, such as satellite
“We need to digitize and expedite all administrative procedures so we can do business much more efficient.” Alberto Orozco
CEO of Capitan Mining
imaging, thanks to its northern region’s desert landscape. Monroy also acknowledged the country’s safety and security concerns and said that the presence of international operators made it clear that some of these companies prefer to deal with Mexican security issues rather than with the Canadian government. “My experience in the past 10 years in Mexico has allowed me to realize the country’s potential, which is phenomenal. The main problems in the Mexican mining sector are the lack of security and political uncertainty.” The speed of administrative processes was also touched upon by Robert Macdonald, Vice President of Exploration at Southern Silver Exploration, who also gave the country a rating of 3.5. He was the first one to mention the importance of maintaining a strong communication with ejidos to address some of the social challenges that operators in Mexico can expect to face. “A good relationship between ejidos and mining companies starts with communication. It must be a very organic and interactive process so both parties are aware of each other.” Meanwhile, Douglas Cavey, Vice President of Corporate Development at Defiance Silver, gave the country a rating of 4, admitting that investment in Mexico has represented a tremendous success for stakeholders. However, he was also critical of the country’s administrative procedures, referring to them as “becoming largely unresponsive.” Cavey also noted that the country’s legal framework needed to provide clarity of title ownership while addressing various components of title and land access. “The cost of communicating with the federal government is quite high and prohibitive for smaller or more independent mining companies.” Macdonald agreed and said that ever since the present administration entered office, Southern Silver Exploration has only been able to have some conversations with agencies like SEMARNAT but has otherwise struggled to receive feedback from federal authorities. David McKinlay Jones, President and Founder of Minera Zalamera, divided his ratings score into categories and stated that the country is definitely a 5 regarding its potential resources, but that he would rate it a 2 in terms of security issues. “I used to work in Guerrero and we have all heard about Guerrero”. He also rated the country with 1.5 when it came to regulatory procedures, flatly stating that they were currently
H ighlights “very problematic, if not impossible.” On the other hand, John-Mark Staude, CEO of Riverside Resources, gave the country a rating of 3 but admitted that he used to rate it a 5 and is eager to get the country “back on track toward a 4.” After these initial evaluations, the discussion focused on how opportunities in Mexico were largely determined by successful ESG management, particularly community engagement. “Communities decide if we stay. Therefore, we must be able to communicate effectively with them and answer their questions. We are partners; this has to be a win-win relationship,” said Jones. Orozco said smaller exploration companies need to be aware that “ESG implementation means that the people need to be as important as the minerals.” However, he also admitted that smaller companies will have an easier time managing ESG issues, since operators need to be mindful of how difficult it can be to scale up ESG. “It is more complicated for larger companies,” he said. Ramiro said that bad ESG management can unfortunately be a common issue in Mexico. “In the worst cases, you can see a complete disregard for the communities, which is a big problem in Mexico.”
Cavey highlighted specific aspects of ESG management. “Gender diversification in our workforce is key in our ESG practices, along with effective indigenous consultations.” Staude noted that good ESG management has an impact at a global level. “Investment from New York, Toronto and Europe comes from sources that are looking at ESG engagement. The expectation is that the capital they give will be put into that as well. In general, communities do welcome the project while external NGOs and political forces question the ESG due diligence. Either way, investors are on top of things. If news comes out regarding outstanding ESG issues, capital is being deployed to address them.”
“Communities decide if we stay. Therefore, we must be able to communicate effectively with them and answer their questions. We are partners; this has to be a win-win relationship.” David McKinlay Jones
President and Founder of Minera Zalamera
ESG CRITERIA AND TECHNOLOGICAL DEVELOPMENTS KEY FOR TOP MINES During Mexico Mining Forum’s first day of its 2021 online edition, the fourth panel discussed the current state of mining operations in Mexico. Moderated by Dean McPherson, Global Head of Mining at the TMX Group, the seven panelists, involved in precious metal mining in the country, discussed various topics regarding operating in Mexico, ranging from investment, ESG issues to technological developments. The companies made a brief presentation of their operations. “We have not one but two new discoveries that we like to take into production in Mexico,” said Bradford Cooke, CEO of Endeavour Silver, adding that the company, which already has three operations in the country, would continue to explore. Eric Fier, CEO of SilverCrest Metals, said it was currently building the Las Chispas mine in Sonora, with some of the highest quality silver found worldwide. “We are hoping to have US$30 million of revenue by the end of that year,” he
noted, adding that there were further satellite deposits to explore. Jason Simpson, CEO of Orla Mining, with resources of over 10 million gold ounces in Mexico and Panama said what makes the company tick is the support by its industry veterans, as well as reputable board and partners. “But most importantly, we have the support of the communities we operate,” Simpson said. Ralph Shearing, CEO of Telson Mining Corporation, outlined the company’s operation in Mexico “We are producing one mine and building another one. After purchasing one mine, it can now look forward to 2,000 tons p/d production at its new flagship project: Tahuehueto in Durango. It is a district-scale project, which is now 50 percent built. As the company is finalizing funding, it is hoping to complete construction by the end of 2021 and is hoping US$20 million free cash flows in operations or more.
19
20
H ighlights As CEO of Golden Minerals Company, Warren Rehn operates Valerdena and is the newest gold and silver producer in the country after it started producing the Rodeo open pit mine in January 2021. The project looks promising, with US$1000 or less per ounce of cash cost. Taj Singh, CEO of Discovery Metals, is developing Cordero silver in Chihuahua. The company is working a very extensive drill program to expand resource “We think it has the potential. We posted over a billion ounces of silver equivalent,” he said, adding that scalable silver assets are rare. The final panelist is Stephen Orr, CEO of Gatos Silver, a company focused on exploration, development and production of silver at the Cerro Los Gatos mine in Chihuahua, which is now cash-flow positive. This year, the company listed its IPO on both the NYSE and TSX. After a successful year, “there has been a lot of angst about going forward,” noted Dean McPherson. For a top operation, a top environment is a must as well. However, some panelists agreed that investors should not worry about demand or Mexico’s potential. Most metals have entered into a bull market in the past year,” Cooke said, noting that gold’s outlook was great because of various value drivers. However, the panel highlighted that silver could soon surpass gold: “Silver is both a precious and industrial metal. Industrial need can make it outperform gold: electric vehicles, 5G and solar power will
drive a 20 percent growth in demand,” he said. Orr, in turn, highlighted the important role of government spending in this area: “Metals have been helped by massive demand coming from China,” he said. As a precious metal, Simpson noted that gold would be popular as a hedge against inflation. However, this increased demand also means that precious metals should be extracted in a in a way that benefit far exceeds the cost.” Singh agreed that precious metals work well as an inflation hedge, noting that silver outperforms gold when the metals are truly boosted. “We are in the early innings of what should be a good ride,” he said. As a key silver global producer, Mexico stands to benefit greatly from this wave as well. In regards to operating in Mexico, all panelists agreed that the county offered favorable conditions. “Mexico is very safe,” said Fier. In addition, Rehn noted that low operational costs add to the benefits: “Diamond drilling is one third of the cost in Mexico compared to the US, and half of that in Argentina,” adding that its geography was spectacular. Mining is in Mexico’s blood,” Singh noted about the strong local mining culture. Permitting is clear and straightforward too, and environmental considerations were catching up fast, he added. Simpson, however, argued that there are still some challenges the country faces and that there is always room for improvement. Nevertheless, he rated Mexico four out of five stars.
H ighlights With a return of more generalist investors to the mining sector, McPherson pointed out that environmental, social and governance (ESG) criteria have been brought back to the forefront. Investors now demand that miners prove that their operations are as sound as they can be. Singh, for instance, has not even gone into production, but will still do an inaugural ESG report because the company believes it is an important area to document. However, these issues are nothing new for miners: ¨Mining companies did not recently suddenly discover ESG, only the investors did,” Cooke said, explaining his company’s efforts to build infrastructure while involving the community in the process, making it more than just a handout. Rehn agreed: “Before the resurfacing of ESG, we had a good relationship with communities and investors in regards to social and environmental issues, but we did not do a very good job in communicating that with the rest of the world,” Rehn said. As an example, Fier showed his company’s long-existing ‘qualified’ approach toward gender equality, featuring internal targets: 50 percent of its executives are women and 30 percent of the board as well. Orr agrees with the importance of ESG, whether it is the latest trend or not: “We believe that we have an obligation to make people’s lives better.” Even though one of Orr’s projects only had one nearby ejido, the company built a hospital that is now staffed by health personnel provided by the local government. As a result, it has become a regional clinic.
Shearing said he managed to get higher recoveries using so-called Leachox testing. “Using Leachox testing, we can improve recoveries from current levels of gold at 15-20 percent and silver 30-40 percent, which would significantly increase the mines profitability by increasing the ounces of gold and silver produced at Campo Morado,” he said. Rehn mentioned that for the Valerdena mine, a bioxidation plant significantly boosted gold recovery by using bacteria that metabolize sulphur. “The plant is a first in Mexico as far as I know,” he added. For Orr, heat coming up during drilling of the Cerro Los Gatos mine caused significant issues. These were dealt with by building a refrigeration plant, which Orr said, “make a huge difference in productivity.” As a result, more of these plants are in the cards.
Touching upon technological developments needed to become a top mining operation,
THE PATH FROM MINING TO DECARBONIZATION Verónica Mar tínez, Senior Programme Officer - Innovation and Climate Change at ICMM, introduced the panel “The Road to Decarbonization: Innovative Haulage Systems” which focused on the industry’s transition to decarbonization, its challenges and the benefits it could obtain by incorporating new technologies.
for transporting people, mining devices, and minerals out of underground mines. Standford added that the company is testing and building machines that are required for the Muckahi process, besides carrying out a prefeasibility study that will be ready in March 2022, which will include costs, benefits and risk assessment.
“The miners are conservative, but once we get to build the first mine with this Muckahi process, it will completely change the industry,” said Fred Stanford, president of Torex Gold Resources. Stanford presented its Muckahi process that increases production through the efficient use of elevated rails, which is a cost-effective process
Stanford explained that Torex Gold has long time investors , and they are always worried about the risks that could arise. He said that for several years, investors have been saying no to its processes; however, with the new ESG trends people have been demanding more of these changes. The financial benefits of the Muckahi
21
22
H ighlights process include a 30 percent capital reduction and a 30 percent operational reduction, which are attracting new investors. The company’s principal assets are the El Limon Guajes mining complex and the Media Luna deposit, an early-stage development project. According to data released by Mexico’s Mining Chamber (CAMIMEX), El Limon Guajes was the country’s second-largest gold producing unit in 2019, churning out 454,800 oz. CAMIMEX highlights that in 2019 Guerrero was the secondlargest gold producer in Mexico, registering a record yearly output growth of 19.4 percent, partly thanks to Torex Gold’s performance, reported MBN. In today’s forum, Andre Barriault, Product Manager Electric Vehicles at Epiroc, explained that the company’s technology can provide more operational benefits than conventional equipment. He also explained that one challenge in this transition is that companies want to know success stories before implementing these solutions. Another challenge is that companies think they will be alone in this transition; however, Barriault emphasized they have Epiroc. “Being innovative and socially responsible does not mean you cannot be profitable or that you have to lose productivity. Mining companies need to have more vision and acknowledge all the benefits they could obtain.” In a recent interview with MBN, Alfredo Bertrand, General Manager at Epiroc, shared that the company’s battery-powered equipment that address environmental issues was being tested in operations abroad. In addition, the company introduced the first units to the Mexican mining market and the machine that was delivered during 2Q21 to a major mining group. Koen Langie, Head of Mining Program at Engie’s Hydrogen Business Unit, explained that the company is targeting big mining equipment by incorporating in them hydrogen, which is an excellent complementary. “According to our simulations, hydrogen solutions will be
“Natural gas might be the least ‘sexy’ option for decarbonization in mining but LNG will still be an important bridge technology.” Jason Green
President and CTO at GFS Corp
competitive with diesel in 2025. Mining can switch to hydrogen without increasing costs and improving productivity and environmental practices,” said Koen Langie. He explained that the company is combining the batteries’ technology with hydrogen; the first provides a fast energy response and charge, meanwhile, hydrogen can increase the equipment’s autonomy. Recently, Langie told MBN about the first hydrogen-powered truck created in cooperation with Anglo American, which is expected to operate in 1H21. Langie explained that more than a final product, this is a proof concept that is part of the development process of getting to a commercially viable hydrogen mining truck solution, which can be used not only by Anglo American but by other mining companies that want to start decarbonizing their operations. Jason Green, President and CTO at GFS Corp, explained that natural gas will play a huge role in the decarbonization of mining companies and that this technology will definitely be the future of OEMs. “Natural gas might be the least ‘sexy’ option for decarbonization in mining but LNG will still be an important bridge technology,” said Green. Green said that natural gas is a cleaner and not expensive option to reduce carbon emissions. He explained that previously, when the company was starting, customers asked about the risks of investing and incorporating equipment that uses natural gas; however, its acceptance has grown and now questions focus on productivity benefits. Green said the biggest challenge continues to be showing the potential of natural gas. GFS Corp is the worldwide leader in the development of systems that allow large, high horsepower diesel engines to operate on a combination of natural gas and diesel fuel. Brian Huff, VP of Technology at Sandvik, said the company’s products are ready to be introduce in the Mexican mining sector; however, the challenge lies in increasing awareness regarding these alternative solutions. “This industry is full of people who are ready to do the impossible, but that works for companies that are quite conservative and unwilling to take on new risks,” said Huff. However, Sandvik technology is reliable, they have been developing and preparing for the las decade. “The mining sector has the technology, and it can have an easy transition; however, education and awareness
H ighlights are needed for the customer base to understand that these technologies are capable and available for the development of new mines.” Huff added that one of the key innovations that the company has been focused on is minimizing
infrastructure changes and an example of this is that the company’s machines can swap their own batteries. Sandvik is a high-tech and global engineering Group with a strong commitment to enhancing customer productivity, profitability and sustainability. Recently, Sandvik qualified for the renowned Sustainability Yearbook by S&P Global, which applauded the company’s sustainability performance, which is within the top 15 percent of the mining industry.
“This industry is full of people who are ready to do the impossible, but that works for companies that are quite conservative and unwilling to take on new risks.” Brian Huff
VP of Technology at Sandvik
NEWMONT: A LEADING EXAMPLE OF RESPONSIBLE MINING Karen Flores, Director General of CAMIMEX, presented “Newmont: ESG Practices for Robust Business Operations at Peñasquito” focused on the Newmont’s commitment with Mexico and ESG practices. Newmont’s Peñasquito is located 780 km from Mexico City. The operation has an open pit mine, Peñasco, that produces gold, silver, lead and zinc. During the presentations, Peter HughesHallett, Country Manager Mexico at Newmont said “we are the only gold producer ranked in the S&P500 index and are recognized for our ESG efforts.” Hughes-Hallett shared that the company has made a global commitment to reduce its greenhouse gas emissions by 30 percent by 2030 with the goal of becoming an emission-free company by 2050. Furthermore, Hughes-Hallett said the mining of the future needs strong and sustainable relationships with the communities. He shared that the company has sough to increase and strengthen its relationship with communities by implementing projects that show the company’s interest for them. Additionally, Hughes-Hallett explained that there is a misconception that mining does not pay taxes and only affects communities; however, this is not true. He emphasized that
the government needs to understand the importance of the mining sector and implement policies to increase the attractiveness of the Mexican jurisdiction. In a recent interview with MBN, Hughes-Hallet said it is important to contribute to the health and vibrancy of the local economy. Newmont Peñasquito has a program called ¨Ideas With Value¨, where they intervene in Peñasquito’s communities to strengthen their business capacities. The goal is to promote the creation or improvement of small and micro-businesses such as restaurants, hair salons, fruit sellers, warehouses, clothing stores, farms and other businesses. During today’s forum, Bernard Wessels, Peñasquito’s General Manager at Newmont, explained that part of the company’s success is due to the implementation of safety and environmental programs that prevent unwanted events. An example is that “the company has administered 124,000 rapid tests in an effort to keep their camp clean from COVID-19.” Juan Reynaud, Peñasquito’s Head of Human Resources at Newmont, said the company has focused on people and their wellbeing. The company gives out awards that recognize people’s efforts regarding prevention. Moreover,
23
24
H ighlights he explained the company’s commitment to people, does not only include its workers, but communities as well. An example is that few years ago the company hired 150 people from communities to be road operators and now they are training them for new projects. “The last strike at Peñasquito was in 2013, which shows the strong and stable relationship we have created with nearby communities.”
Doris Vega, Communications Manager Mexico at Newmont, said that during the pandemic, social media has become the main tool that has allowed them to strengthen their relationship with the public. “Since October, we have been showing the human side of our collaborators on social media. In addition to being miners, they are parents, siblings and have other talents”, Vega said.
In 2020, for the 13th year in a row, Newmont was on the Dow Jones Sustainability World Index, in which the company was named top global gold mining company for its leading environmental, social and governance performance, reported MBN.
Vega added that highly effective teams can leverage diversity as one of the company’s greatest competitive advantages. Newmont’s approach focuses on gender, nationality, and local and indigenous groups, aligning with ESG practices and the company’s commitments to communities.
GETTING INTO THE NITT Y GRITT Y OF AUTOMATION An increasing number of digitalization and automation technologies and services will have to be implemented into the daily functioning of the mining industry in order for it to be able to address its most pressing challenges. This fact was made clear during the last section of Mexico Mining Forum 2021’s Day 1, which concluded with a presentation by Alejandro Espejel, Head of Smart Services at FLSmidth, and Alejandro Herrera, Mining Sales Director for Mexico & Central America at FLSmidth. Globally known, FLSmidth is a Danish engineering company based in Copenhagen, Denmark that employs close to 11,700 employees worldwide and
provides global cement and mineral industries with factories, machinery and services with the latest technological developments. Espejel explained that the equipment and technologies that FLSmidth provides run the entire gamut of a mining worksite’s productive chain, “from extraction to tailings management”, which Espejel believes is essential for the integration of automation and digitalization protocols. “One weak link in the chain can inhibit or disable the correct functioning of all the others.” Before providing specific examples of the technologies that they were developing, Espejel delved into
H ighlights
the question of why digitalization was becoming increasingly relevant in the mining industry as lower yields from all materials processed began to represent higher energy investments: “The ore deposit grade is decreasing each time as time passes. This places a high demand on processing equipment. Miners have a constant challenge and that is to maintain profitable operations. Digitization can help maintain and improve that profitability.” Herrera introduced FLSmidth’s SmartCyclone technology, which addressed the need for automated technology that could “reduce the response time between a cyclone blockage event, its detection, and the return to normal operations.” It achieves this by using acoustic data points that can perceive the type of silence that indicates the presence of solids obstructing the cyclone’s usual performance. Like other technologies presented, SmartCyclone entered FLSmidth’s portfolio through an acquisition. Espejel explains the logic of this strategy thusly: “FLSmidth is always striving to have the most up-to-date and efficient technology portfolio. This has led us to develop products organically within the company and also to acquire other companies.” Similarly to SmartCyclone, LoadIQ was another technology which FLSmidth acquired through their purchase of the company KnowledgeScape. Espejel said the technology allows you to “constantly measure and monitor the cascade angle inside a mill to see how conditions are changing due to minerals.” This can address what has become a key issue for mining operators, which is increasing the grinding efficiency of their mill. After the presentation of these technologies, Espejel explained one of the key conundrums of automation and digitalization: they generate volumes of data that are not necessarily easy to read. This is why FLSmidth offers service packages that can deliver insights based on the data that all these sensors and technologies generate.. As Espejel put it, “technology must be coupled with a vast
amount of expertise and run by specialists to be able to monitor its performance. At FLSmidth we not only offer digitized equipment, but also a 24/7 monitoring service. Additionally, we can enable apps for our customers so that they have all the equipment information available at all times.” This of course includes the development of software and SaaS solutions, such as FLSmidth’s SiteConnect app, which allows mining site decision makers to have access to updated information on their smartphones. In addition, Espejel mentioned projects being developed for the company’s future pipeline, such as robotic and augmented reality solutions that can place engineers onsite remotely. This would revolutionize the workflows of mines, not to mention make the human cost of incidents a thing of the past. One of the ultimate aims of implementing these technologies for Espejel is what he referred to as “the use of digital solutions to achieve asset performance optimization”. This refers to the nature of maintenance. According to Espejel, through the use of his company’s technologies, companies can move not only beyond reactive maintenance, but beyond predictive maintenance as well. As he put it, “predictive maintenance is usually represented as the end goal, but the truth is that for us it represents only the middle step. Predictive maintenance is good but it still means excessive and ultimately unsustainable expenses for operators. What you really want to achieve is continuous maintenance, meaning systems where maintenance is performed as the system is running through its usual functioning stages. Only through that technological goal can companies meaningfully reduce their downtime, by a factor of as much as 75 percent.”
“...technology must be coupled with a vast amount of expertise and run by specialists to be able to monitor its performance.” Alejandro Espejel
Head of Smart Services at FLSmidth
25
26
H ighlights ESG PRACTICES ARE HERE TO STAY Elena Espinoza, Acting Head of Social Issues at Principles for Responsible Investment (PRI), kicked off day 2 of Mexico Mining Forum 2021, hosted by Mexico Business News, with the panel “Precious Metals Market & The ESG Investment Revolution.” The panel focused on ESG practices and the importance of investors in their implementation. “What we don’t grow, we mine. Mining is incredibly important to the global economy and we have a responsibility to our communities and our environment,” Espinoza said during her opening remarks as moderator. Terry Heymann, CFO of the World Gold Council explained there are many different frameworks of what constitutes responsible mining, highlighting a growing demand for ESG practices. “To mine gold, we established Responsible Gold Mining Principles, which define all material issues associated with gold mining and are based on best practices,” he said. Heymann added that mining has a high potential to positively impact the fight against climate change. However, results will depend on the implementation of ESG practices. “Regulation is only one of the drivers for ESG. It is helpful but needs to be mindfully constructed. I believe that investors have an important role, too,” said Heymann. Heymann also highlighted the importance of gold and how the metal has become essential for technologies used to fight the COVID-19 pandemic. He also emphasized that at the beginning of the pandemic, there were concerns regarding the importance of ESG practices, which fortunately has only increased. For Heymann, ESG and gold will be the important issues in 2020 and Mexico will play an important role in both. Javier Reyes, Chairman and CEO of Accendo Banco, explained that the US political environment will affect the world, especially as the country has an unpayable debt. Reyes
“Regulation is only one of the drivers for ESG. It is helpful but needs to be mindfully constructed. I believe that investors have an important role, too.” Terry Heymann
CFO of the World Gold Council
said the company is focusing on metals in a low interest rate and low growth rate environment, which is positive for mining investments. In addition, Reyes said that for the company, the most important thing for investments is transparency and the implementation of ESG practices. Nowadays, investments in mining depend 50 percent on the country’s jurisdiction and 50 percent on the company’s management regarding ESG practices. Reyes said Mexico has a great potential, since it has one of the most important jurisdictions in the world. He emphasized the company is excited to continue working in Mexico and that it is ready to work with miners that want to improve their ESG practices. “Accendo Banco is a solid financial institution that operates under international standards and offers different types of financing and advisory services to the Mexican mining industry. Accendo Banco’s extensive experience in mining in Latin America and a team of experts in different areas of mining make us the perfect partner for your mining project,” reported the company. “ESG and environmental concerns have been more important than ever for major mining companies. Notably, visiting mining sites can give you an entirely different view on these issues,” said Matt Geiger, Managing Partner of MJC Capital Fund. He explained that proximity with communities is needed to change companies’ mindsets on the importance of implementing ESG practices and emphasized that having a good relationship with communities makes permits and projects easier to obtain. Geiger added it is necessary for companies to embrace ESG practices, including programs to decrease CO2 emissions and tailings disposals. At the same time, Geiger addressed mining’s role in the green revolution, citing the World Bank study “Minerals for Climate Change.” “Copper, lithium and nickel will have a clear advantage over other metals because of their green edge in the next years. Silver might be sold more easily than gold, as well,” he said. “Silver is truly a green metal and it is playing a vital role in EVs and photovoltaic development,” said Michael DiRienzo, Executive Director of The Silver Institute (SI). DiRienzo explained
H ighlights that SI is highly engaged with ESG issues, especially because silver will have a vital role in the decarbonization of societies. In addition, DiRienzo explained silver can also be used for water purification and is expected to become the solution to many countries where there are water shortages. SI is committed to ensuring that silver mining is done responsibly as it believes mining can improve people’s lives. Mexico is the largest silver producer and, therefore, the country will play a fundamental role in the decarbonization of the industry, said DiRienzo. Back in November, the instiute released its Interim Silver Market Review, featuring historical supply and demand statistics and provisional estimates for 2020. Physical silver investment is expected to surge to a five-year high, even when the COVID-19 outbreak affected global demand and mine supply. Mexico, the world’s top silver producer, is poised to benefit from these trends, reported MBN. James Rasteh, Partner at Coast Capital Management, said investors also have a great responsibility in ensuring the implementation of ESG practices. “As investors, we are the architects of these companies. However, most of us do not realize our role in pushing companies on the
right path.” Rasteh emphasized that investors must demand detailed information regarding ESG practices and in case the company has not implemented them, “investors can make a difference by contacting the board directly and including the biggest investors, using a well-researched proposal.” Investors need to make sure companies look out for communities, the environment and employees, and hold the board accountable if they have not made the right choices, said Rasteh. Mexico is a great mining jurisdiction and the government is creating a stable environment for mining, increasing its investment attractiveness, according to Rasteh. “The country can be a leading example of responsible mining through the adoption of new clean technologies, which could lead other companies to adopt ESG practices.
“....investors can make a difference by contacting the board directly and including the biggest investors, using a well-researched proposal.” James Rasteh
Partner at Coast Capital Management
WHAT LIES BEHIND MEXICO’S PRECIOUS METALS SUCCESS? Mexico Mining Forum’s second panel of the day, moderated by Isabel Adame, Communication Specialist of Mexico Business, analyzed what led to the success of precious metal companies in the country. The panelists, all leaders of some of Mexico’s most successful mining projects, initiated an intimate conversation regarding their personal backgrounds and what drives their success. Kenneth MacLeod, CEO of Sonoro Gold Corp, shared his background in mechanical engineering for the oil and gas sector, which eventually led him to mining. “Without vision, you will not get to the destination you want as a mining CEO,” he explained. Having a clear vision will help a project through financing into development, construction and effective operation. Having a team that also shares this vision is of the utmost importance, MacLeod explained. Jason Simpson, CEO of Orla Mining, said he moved around the world due to his parents’
involvement in the oil and gas industry. He found his calling as an operational leader in mining. “Mentorship is incredibly important,” Simpson said about his personal development. What currently influences his personal philosophy as a CEO is a focus on people. “My decision-making is influenced by people, including shareholders, communities and staff.” A mining geologist by degree, Doug Ramshaw, CEO of Minera Alamos, believes that finding the right environment is essential to thrive. “A key attribute in terms of success and leadership is surrounding yourself with the right people,” he said. Ramshaw noted that working with a motivated group is not just a measure for success; it also makes work enjoyable. Furthermore, he believes in truly becoming a part of the communities surrounding projects. CFO of Kootenay Silver Raj Kang talked about his background in corporate finance. After his move from the UK, he became fully focused on
27
28
H ighlights mining. To become a successful leader “people need to know what resources they have and how they can best use them,” Kang noted. “We want to make sure that we have an effective risk-reward system in place for the utilization of our fund,” he added. Despite his focus on capital markets, Kang noted that good teams are crucial for a successful mine. So how did this philosophy help foster their success stories? For Macleod, having a secure vision helped him foster strong bonds with local authorities and communities, despite the strong challenges he faced in this regard in Congo and the Philippines. “You have to wear many hats as a CEO in the resources sector. Unless you demonstrate that you value them, you will not go very far,” he said in regards to the versatility that one must have to tackle different problems miners encounter. When it comes to caring for people, Simpson highlighted how developing local resources can really change people’s lives. In the case of Mexican Camino Rojo project, Simpson said that it was especially rewarding to learn about the community’s culture and the company can contribute to its development. “The success of these developments will last far longer than my tenure there.” Ramshaw concurred, noting that Minera Alamos’ mines have had a beneficial impact on their surroundings. “We can change lives of our communities by developing national resources rather than only creating a good impact for shareholders,” he pointed out.
For Kang, utilizing one’s resources effectively is also key for every aspect of the company. “I feel like it has been more of a team effort, rather than something one person has done,” Kang said about the company’s trajectory from a grassroots private company to a publicly listed one with a great resource discovery under its belt. Regarding good and bad decisions made in 2020, MacLeod noted that financing was a prominent issue. “Raising capital was a major challenge at the beginning of 2020. Financers in New York and Toronto thought we were too early,” he said. As a result, MacLeod had to guide the company through rough times. Not long after, the company raised US$8 million, which confirmed the company’s value. Even though more money could have been raised, MacLeod decided that the risk of share dilution was not worth it, especially since the amount raised met the expectations. “Our metallurgical testing is on the way as part of our PEA. Our objective is to secure full project financing through PEA,” MacLeod said. For Simpson, staying on course proved beneficial as well. “Orla’s decision to continue advancing our projects through a challenging year was the best decision we have made.” Simpson said company members had to trust that their EPC investments in Mexico would blossom in 2020 and ultimately, they did, once permits arrived. When asked whether higher gold prices would have made the development process go faster, Simpson pointed out that the company had good margins already and was moving swiftly
H ighlights without working too hurriedly. However, with production coming near, the company will face a new situation. “As we transition from construction to production in 2021, we can assume stakeholder expectations will change,” Simpson said. Ramshaw said he already had both permitting and financing in place. “Permitting is great in
Mexico,” he added. By getting these crucial benchmarks ready in early 2020, construction of the Alamos mine was possible, thanks to the technical team’s focused efforts. “We counted a number of business interruptions and delays that impacted our exploration program, as did everyone else,” noted Kang. Despite these delays, a calm approach allowed the company to still meet its exploration program in 2020.
EXPERT GUIDANCE FOR BUILDING AN INTEGRAL MINING PROJECT IN MEXICO How can public bodies support mining companies to comply with ESG and environmental standards? This was the main topic of Mexico Mining Forum 2021’s third panel on day 2, “Expert Guidance for Building an Integral Mining Project in Mexico” on Thursday, Feb. 11. The term “integral mining project” refers to the integration of all possible needs and effects that a mining project could generate both socially and environmentally. In that sense, an integral mining project is one that has planned ahead for all possible contingencies and contemplated all possible consequences of its development plan to mitigate negative impacts and boost positive ones. The experts that participated in the panel represent Mexican public institutions demanding the highest standards regarding sustainable development from the mining industry. The panel was moderated by Lic. José Rafael Jabalera Batista, Mining Development Director at the Ministry of Economy (SE). Jabalera had been mentioned by name quite a few times throughout the forum. He is recognized as the person from the current administration who has supported ongoing mining operations, particularly during the pandemic. Jabalera recognized the urgency that exists in the relationship between Mexico and the mining industry. Mexico has a great need for investment to reactivate its economy and mining companies have a great need to take advantage of Mexico’s enormous geological potential, he said. “We are here to support any company or investor that wants to develop a mining project and to establish a good relationship with the communities,” Jabalera said. He also admitted to something that previous panels had made reference to, which is that permitting and legal procedures for miners have experienced significant delays throughout 2020. However, he also explained
that these delays were very much reasonable considering the great number of people within the federal government’s workforce who are vulnerable to the effects of COVID-19. Mining operations need support from experts who can understand their development goals from a geological perspective. In that sense, Dr. Flor de María Harp Iturribarría, Director General of the Mexican Geological Service (SGM), was very thorough when explaining the importance of SGM’s services. SGM guarantees the standards of mining operations through the creation of strategies for the prevention and mitigation of natural disasters derived from geological analysis, such as flooding, landslides, cave-ins and sinkholes. Its geohydrological studies, in collaboration with CONAGUA and Civil Protection, have prevented deaths and also play a vital role in making sure that groundwater reserves are not contaminated by mining activities. Harp also acknowledged the role SGM played in adapting the industry to the conditions imposed by the pandemic. “COVID-19 forced
29
30
H ighlights us to establish better protocols and there were many sudden changes, which was a challenge. However, mining has adapted to this new reality.” The Ministry of Environmental and Natural Resources (SEMARNAT) also plays an important role in environmental regulation in Mexico. Mtra. Gabriela Esperanza Milán Chávez, Director of Mining at SEMARNAT, talked about the process through which new norms and regulations regularly update the environmental standards of the mining industry. “We need responsible mining. It is no longer enough for mining companies to be profitable. They must be socially and environmentally responsible.” Milán Chávez emphasized that the mining industry will not only play a key role in Mexico’s economic recovery, as it could also become a global example of a sustainable and ethical economic growth. She also responded to questions regarding indigenous consultations and made it clear that SEMARNAT was working with
various public institutions to define the exact legal parameters for these consultations, which are now a requirement for the issuing of all new concessions. When it comes to social responsibility and community engagement, mining companies can do a lot to develop local suppliers and promote the training of Mexican mining talent. In this regard, the panel featured the participation of Lic. Silverio Gerardo Tovar Larrea, Director General of Credit, Finance and Administration at the Government Trust for Mining Development (FIFOMI), who emphasized his support for mining projects through funds that are raised independently and have remained self-sufficient through ROI since their original conformation in the 1970s. Tovar Larrea said it was very important for him to participate in integral mining projects. “We have incorporated environmental, social and fiscal criteria in our evaluations to promote responsible mining in Mexico.”
DATA TO OPTIMIZE MINING OPERATIONS In an effort to help companies optimize mining operations, Alexis Perrusquía, Regional Marketing Supervisor for LATAM at Thermo Fisher Scientific, presented the panel, “Advanced Control of Mining Operations: From Data to Knowledge,” during Mexico Mining Forum 2021 on Thursday, Feb. 11, which focused on the company’s products and services and the many technologies involved in providing reliable and accurate data. Thermo Fisher Scientific assists customers by improving recovery, reducing costs and achieving environmental compliance. “Thermo Scientific™ Mineral Sampling Systems provides essential, and accurate information for the metallurgical processing control system, which
optimizes processes, generates considerable savings and improves profitability,” reported the company. “Thermo Fisher Scientific has a portfolio full of tools, allowing for the immediate analysis of geological samples,” said Juan Carlos Cruz, FSI Product Specialist at Thermo Fisher Scientific. Cruz explained that the company is the perfect ally for the mining sector, considering that it has vast experience providing accurate analytical instruments, which allow mining companies to increase their profitability. Rodrigo Rosales, PA Product Specialist at Thermo Fisher Scientific said the company has 35 years of experience with Bulk Ore Sorting-
H ighlights Clasification and that “it has more than 1,200 cross belt elemental analyzers installed, which bring great benefits regarding mineral analysis, which leads to higher mining rates.” Thermo Scientific weightbelt feeders and belt conveyor scales help ensure the accurate feeding of process materials to maintain product quality. In addition, they also improve profitability, increase metal recovery, eliminate processing costs, reduce water and energy consumption and enable marginal deposit exploitation. Marcial Hernández, Thermo Fisher Scientific Field Service Supervisor, explained that the dynamic weighing system can simplify various processes in mining, since it has a wide variety of uses, such as inventory control, material mixing and transfer. Hernández explained that the precision of the instrument depends on the process it will perform. For instance, for monitoring, it requires an accuracy of 3 to 4 percent. For more information on the instrument, click here. Yazmin Sánchez, Manager of the Environmental Monitoring Channel at Thermo Fisher Scientific, explained that COVID-19 has driven the company’s vision toward safety and environmental protection. “Currently we have environmental services and products to monitor gaseous pollutants and atmospheric emissions, which allow greater optimized efficiency, process controls and regulatory compliance.” Sánchez explained that the main risk in terms of particles and gases is respiratory problems. Thermo Fisher offers analytical instruments, such as environmental particle monitors, personal monitors, gas analyzers and continuous emission monitoring systems, to ensure better gas control. Ivan Sanhueza, PA Minerals Manager at Thermo Fisher Scientific, said “elemental analyzers provide mining companies with real-time sampling and analysis to help them address process variations and improve their operations.” Thermo Fisher Scientific’s sampling and analysis systems can determine the elemental composition of all raw materials transported by the conveyor and eliminate many errors and costs associated with the sampling process. For base metals, the company offers AnStat 330 sampling for metallurgical analysis. There is also an organized multiple flow sampling (msa mk 330) for when a business requires many studies. Sanhueza reported there are some
instances when the metal is difficult to sample. However, the company offers GS-Omni pulp that activates the nucleus of atoms. To their natural state metals must emit energy and since elements have a unique energy signal, they can be measured. For the elaboration of an online analysis, the company offers CB Omni, which uses the same technology as gamma analysis. “However, there is a portal around the conveyor that helps with a full analysis of what is going on,” Sanhueza said. Currently, the company is trying to introduce this type of instrument in the mining sector, since it is essential to have an optimal separation of minerals and residues, he said. Leonardo Salazar, Applications Specialist at Thermo Fisher Scientific, explained the benefits that mining companies can obtain by implementing mineralogical analysis, which can maximize plant efficiency and reduce energy consumption. He added that these samples allow efficient planning for exploration to know which minerals are in the area, their size and geological context. “Thermo Fisher Scientific has laboratory imaging and analysis equipment that uses Micro-CT, SEM, DualBeam and TEM to ensure versatility in different contexts,” said Salazar. He added that many problems can be solved by using automated minerology. Salazar explained that minerals can be identified with X-ray that works as a fingerprint to get a correct sample of all the minerals. “We help mineral processing engineers to obtain high-quality data to track processing plant issues more efficiently in less time.” Eduardo Alcántara, Channel Manager BEA at Thermo Fisher Scientific, explained that the main analysis techniques in the mining industry are: Optical Emission Spectrometry (OES) and X-Ray Fluorescence. However, the company recommends the use of OES as it provides a quick and easy analysis of metal samples, helping to determine the rate of more than 30 elements in less than 1 minute with high accuracy. Alcántara said the company’s OES portfolio includes ARL easy Spark, ARL iSpark 8820, ARL iSpark 8860, ARL iSpark 8860 with advanced analysis and ARL iSpark 8860 with an automation system for sample handling. Alcántara said that all the equipment is highly reliable and the only thing that changes is the number of samples it can analyze.
31
32
H ighlights MINING SAFET Y AT THE CROSSROADS OF CULTURE AND TECHNOLOGY Safety is an essential element that must be considered in all mining operations. The panel, “Setting a Higher Standard: Proactive Safety Measures in Mine Planning,” focused on the latest safety developments regarding mining operations toward a zero-fatalities goal. The panel was moderated by Mick Routledge, COO of Coeur Mining, whose opening statement highlighted that excellence in health and safety performance was becoming one of the prime market indicators for good investment outlooks in the mining industry. “People are looking at safety figures to decide who is doing good business in the mining industry,” Routledge said. Alan Pangbourne, CEO of Chesapeake Gold, said the key to good safety results is the clarity of all processes and procedures. “There are no silver bullets. Without clarity, you cannot expect processes and procedures to be absorbed effectively by your workforce. People understand the risks of what they are doing and modify their behavior, resulting in better safety practices,” Pangbourne said. The CEO of Chesapeake Gold highlighted the use of behavioral science to better implement safety protocols. One of the examples he provided related to employees receiving positive reinforcement for good safety practices from their peers, rather than from managers or superiors. “In terms of influence, people listen to their peers, not their supervisors. You see the same dynamic happen between children and parents; at a certain point in their development, children start taking behavioral cues from their friends, rather than from their parents.” Pangbourne highlighted that this approach must be scientific and reiterative or repetitive. “Thousands of observations must be turned into data so you can measure the degree to which people are absorbing safety protocols to determine what is not working in your training system and what needs to be reinforced time and time again.”
“What is most important is to migrate numbers and procedures toward proactive actions to make people safer.” Ivan Montiel
Director of Operational Strategy and Development at Agnico Eagle
Pangbourne also gave an example from his previous experience working at BHP Billiton. “The same safety problems from back in the day keep causing deaths. BHP Billiton set up top standards in a platform of expectations, leading to a behavior-based system. This resulted in 22 million man-hours with no fatalities and only three serious accidents. This was unheard of at the time. We received awards for it, but what was important is that all the contractors and suppliers that worked with us during that time took that change in safety culture with them to their own work sites.” Ivan Montiel, Director of Operational Strategy and Development at Agnico Eagle, talked about the importance of making sure that changes in culture translate to a change in safety results. “What is most important is to migrate numbers and procedures toward proactive actions to make people safer. Otherwise, no amounts of schematizations of company culture will work. Being proactive is key to safety in operations: no matter how good a standard is, it needs to be implemented right,” Montiel said. He also agreed with Pangbourne regarding the importance of safety culture, and the role leaders and supervisors play in its adoption. “Health and safety culture is built by example. Leaders’ involvement as safety promoters is key. Risk management, training, performance measurement and communication are essential to ensure safety.” Hugo Barrientos, Manager of IIoT Plantweb Digital Ecosystem at Emerson, introduced the topic of technological tools that can guarantee safety, particularly digital education and automation solutions. “Education and communication are vital to ensure safety. Flexibility is also necessary; mining is changing and digitization is still lacking. Monitoring and control of environmental impact and the health and safety of staff are a necessity to achieve the best performance.” Pangbourne expressed a slightly more critical vision of automation as a safety tool, noting that automated solutions need more layers of protection because 1 percent of the time, conditions are not ideal and the system could fail. “When you start thinking about accidents, it all comes back to behavior. Unfortunately, one of the biggest issues is turning a blind eye when something is
H ighlights happening,” he said. Montiel, on the other hand, said “new technologies, such as automation and AI, create a support system for companies to achieve their goals efficiently and safely.” A much more analogue approach was taken by Jesús Vargas, Head of Industrial Safety at Minera Autlán. “We started with 10 basic safety rules in our company, actively promoted by the director of the mine. This changed the outlook within the mine, even though it was difficult to implement these rules with a zero-tolerance approach. We started promoting safety a few years ago. In doing so, the trends on the charts
went up because before that, events were not being reported. We have an evaluation system for security measure compliance. We rate employees and that motivates them to improve every month.”
“Thousands of observations must be turned into data...to determine what is not working in your training system and what needs to be reinforced time and time again. Alan Pangbourne CEO of Chesapeake Gold
TAILINGS MANAGEMENT FOR RESPONSIBLE MINING The implementation of global standards and technology to improve tailings management was discussed during Mexico Mining Forum 2021’s third panel on Thursday, Feb. 11, “Technology for Safer and More Sustainable Tailings.” The panel was moderated by Kim Morrison, Global Tailings Manager at Newmont, who said that anyone’s tailings failure is a failure for the entire mining industry. “We must collectively address the challenges of tailings. The future requires not only the adoption of best practices, but also of the best technology.” Morrison highlighted that tailings accidents, such as the 2014 failure in Canada and the 2019 one in Brazil, have change environment regulation around the world. She explained that in response to the 2019 Brazil accident, ICMM, PRI and UNEP
developed an international standard on tailings facilities published in 2020. Elaine Baker, GRID-Arendal’s Global Tailings Dam Portal Project Expert, explained that in recent years, several organizations have promoted ethical mining by providing global standards, such as Global Tailings Portal, which provides information from mining companies about their tailing’s storage facilities. Baker emphasized that the platform has information on 115 mining companies, 309 operators, 758 mining sites and 1,853 tailings storage facilities. The platform and standards were created with the help of an excellent advisory group formed by social and environmental organizations. As a result, the standard has an ESG-oriented perspective. In addition, Baker said that for
33
34
H ighlights
Phase 2 of the platform, they want to establish a multi-stakeholder advisory group, who would review issues and align them to Global Tailings standards, while providing more information to companies. Mitchell Krebs, CEO of Coeur Mining, said the company pursues high standards and that Coeur’s operational risk reduction plan on tailings dams follows authorized international guidelines, effective filtration and hydraulic control systems, as well as an excellent tailings management track record, among others. Krebs also mentioned that the tailings of Palmarejo, Coeur’s operation in Mexico, are classified as non-potentially acid generating and that any water discharged to the environment passes through a secondary inverse osmosis treatment to comply with environmental regulations. “People can tell if your being honest or not. That is part of the core of who we are. If you do not tell your story, someone else will,” said Krebs. He emphasized that mining companies must be consistent and clear with their messages, so people know the positive actions that the company is implementing. Krebs said that when there is lack of information, people can
“This industry has been under the radar for a long time and is missing a great opportunity because there are so many stories that show the positive impacts of mining.” Mitchell Krebs
CEO of Coeur Mining
assume the worst. Therefore, companies must raise awareness concerning the many benefits of mining. “This industry has been under the radar for a long time and is missing a great opportunity because there are so many stories that show the positive impacts of mining.” The company is always trying to adapt and learn best practices and given the importance of tailings in mining, the company is ensuring their control and promoting their good management, which also provides financial and operational benefits. “We have generated innovation around tailings. However, as a junior company it is difficult. We do not have as many resources available but we are working on our ESG right now,” said Bradley Langille, CEO of Gogold Resources. Langille mentioned that GoGold has one producing asset in Mexico, the Parrat Tailings project in Chihuahua, where the company has been transporting tailings to a heap leach facility that is 14km from the city of Parral. Langille said that among its ESG actions, the company provides numerous social and environmental benefits, as well as great returns for all shareholders. “Most of our workers are Mexican citizens. This allows us to have a better relationship with the communities and really provide what they need.” Langille said the company is taking important steps toward incorporating ESG practices, which have been highly promoted by investors and institutions. Langille concluded that there are many consequences if tailings are not managed properly and that the mining industry must act responsibly as a community.
H ighlights PEOPLE , COMMUNITY AND TOOLS TO MAXIMIZE OPERATIONAL POTENTIAL Closing Mexico Mining Forum’s second day, Jesus Romero, Senior Consultant at Golder, looked at how existing operations’ potential could be maximized. Experienced panelists outlined how expertise, tools and most of all people, play a significant role in improving operations. “A company’s staff is always a crucial factor for mining companies that are looking to improve their operations. I can talk about my team all day. Without our people, all we have is a rock on the ground,” said Jody Kuzenko, CEO of Torex Gold Resources. Because mining is a complex business, people are crucial but they need to be aligned to the company’s vision. This vision, Kuzenko said, should be clear and informed in regards to culture and value. To this end, Torex utilizes the ‘systems leadership’ theory to foster commitment. Arturo Bonillas, CEO of Magna Gold Corp, agreed with this notion. “Alignment is fundamental in any organization. In our case it is absolutely vital,” he said. To keep people aligned with the company’s vision, Bonillas said keeping clear KPIs and focusing on top-down and bottom-up communication and feedback are crucial elements. Furthermore, employees should know what they contribute to the company’s direct results. Sharing a common culture is a particularly interesting challenge for companies that started out small, like Alamos Gold. Its CEO, John McCluskey, scrambled to get the project going with a team of only four people. Now, the company has grown to over 2,000 people and has a market value of US$4 billion. “We had to learn along the way,” explains McCluskey. To generate company values, Alamos had to talk to all its employees. But even more important is to adhere to these standards after they have been set, especially in an uncertain year marked by a global pandemic. Both staff and communities need to be kept safe. “If you do not see that mining has a purpose that goes far beyond the production of metals, you have missed the point,” said McCluskey. Steve Holmes, COO of First Majestic Silver Corp, noted that the company was founded in the early 2000’s and expanded through M&As. During this time, sharing a vision was paramount.
“But vision does not always easily translate to the people on the frontline,” Holmes remarked. Every worker has a different perspective, after all. Companies should focus on what makes their culture valuable and enforce that through strong and frequent communication, involving senior leadership when possible. When developing their teams, the panelists highlight Mexico’s strong mining culture, which helps companies find the right talent for their operations. “Foreign companies brought in a lot of knowledge,” Bonillas said, adding that people in the areas of economic geology and experts in exploration are still somewhat lacking. However, Holmes said that most of his team are nationals. Kuzenko also explained that 99 percent of her company’s workforce comes from Mexico, 70 percent of them from Guerrero, where Torex operates. Its Media Luna project will go online around January 2024. “The expertise of our Mexican team made this all happen,” she said, stressing the importance of local experience. “The best thing we have done is to cultivate and to grow a construction team,” said McCluskey, adding that local people can help with unusual circumstances that pop up while operating. Besides people, tools are equally valuable to maximize potential. “Our number one tool is cost control,” Bonillas said. Reacting fast to issues is key to optimize cash flow. Furthermore, the importance of geological models could not be understated: after all, you only get to mine a mineral once. Kuzenko highlighted the importance of tailings dams, as their failures cause tragic accidents. This is why the company built one of the largest filtered tailing storage solutions found in the world. Using both filters and dry stacking, the risk of a complete failure and subsequent runout is minimized. While this costs more, the mine is located in a seismically active area riddled with water issues. The company’s tailing solution
“A company’s staff is always a crucial factor for mining companies that are looking to improve their operations.” Jody Kuzenko
CEO of Torex Gold Resources
35
36
H ighlights brings many benefits to the table, just like its innovative rope conveyor does.
shine, standardize and sustain, an efficient workspace can become a reality, he says.
At First Majestic’s Santa Elena mine, a highintensity grinding mill provided a competitive advantage in the liberation of gold and silver, said Holmes. The mine uses a lot of energy as well, so Holmes is commissioning a large, on-site liquefied natural gas (LNG) powerplant, along with a third party so First Majestic did not need to invest heavily. The LNG plant cuts energy spending by 35 percent and decreases carbon emissions by 50 percent. But not everything needs to be cutting-edge technology, however. By incorporating ‘5S’ criteria: sort, set in order,
McCluskey aimed his efforts at engineering design, metallurgy and exploration, taking safety and efficiency into account. “What Mexico needs more than anything else is long-range thinking,” he explained. Therefore, expanding reserves and reliable policies are of the essence for the mining industry. Nevertheless, a company should plan well from the get-go. “No matter how good your people are, they can head off in the wrong direction,” he said.
“Community relations need to be really strong and long-term if you are going to be successful in Mexico.” Steve Holmes
COO of First Majestic Silver Corp
All panelists concurred on the essential role community relationships play in the mining sector. “Community relations need to be really strong and long-term if you are going to be successful in Mexico,” said Holmes. “Governments give permits, communities give permission,” agreed Kuzenko. Leaving a netpositive legacy after a mining project is finished should be part of all companies’ strategies.
MINING: KEY PILLAR FOR MEXICO’S ECONOMIC REACTIVATION During the last presentation of Mexico Mining Forum 2021 on Friday, Feb. 12, Fernando Alanis, President of CAMIMEX, highlighted the role of the mining industry as one of the strongest and most necessary sectors in the reactivation of the Mexican economy. Mexico ranks among the Top 10 world producers of 17 minerals, according to Alanis. Mining represents 2.3 percent of the country’s national GDP and 8.1 percent of its industrial GDP. “Mexico is a mining country; 70 percent of the nation’s territory has mining potential and currently only 30 percent has been explored. Mining has historically been concentrated in the center and north of the country. However, this activity can benefit more states,” Alanis said. At the moment, mining is present in 668 communities in 212 municipalities and 24 states. It generates 379,000 direct jobs and 2.2 million indirect jobs. Alanis said that during the COVID-19 pandemic, a commitment was made with CAMIMEX subsidiaries, which represent 90 percent of the value of mining in Mexico, to support mining employees. Alanis explained that mining stands out for its social and environmental commitment to
communities. Mining companies often build and develop roads, electrification, water and waste management systems in nearby communities and, most importantly, they provide health and education services. “Mining happens in remote places in need for development opportunities, not only in infrastructure but also in education, entrepreneurship and health services to improve quality of life.” In 2019 alone, investment in social and sustainable development in the mining industry amounted to MX$5.327 billion (US$267.16 million). C AM I M E X re ce ntly re le ase d it s 2020 Sustainability Report, in which the chamber states mining is an important activity that generates wealth, which is not only distributed among companies but also communities. The report emphasizes that mining contributes to local, regional and national economic growth, social development and protection, care and restoration of ecosystems and the environment. “It is impossible to think about cultural development and social welfare without mining,” said Alanis. This report represents CAMIMEX’s first effort in demonstrating the industry’s commitment to society through factual data.
H ighlights
Alanis explained that in addition to promoting regional development, the industry also supports the development of other economic activities, such as construction, transportation and trade.“Mining imports and exports represent 474,000 tons of materials per year. If the mining sector is promoted, other sectors will also grow,” he said. In terms of direct monetary contributions, Alanis also highlighted the role of mining operations. “It is unfortunate to hear that mining does not pay taxes. In the last 4 years, mining has paid MX$131.016 billion (US$6.572 billion).” Alanis also addressed the elimination of the deductibility of preoperative and exploration expenses after the 2014 tax reform, which led investment in exploration to decrease by 40 percent. “We hope that the government will begin to encourage mining activities, as all mining countries do. This alliance is necessary for the sector to develop,” he said. Mexico needs certainty and long-term public policies that promote fiscal competitiveness, regulatory competitiveness, social certainty and understanding of the mining sector, he added. “Initiatives can be achieved through a mining table that allows good coordination between the legislative and executive powers.”
On Wednesday, during the panel, “2021: A Year of Rebirth for Mexico’s Mining Industry?” Alanis explained that the challenges for 2021 include COVID-19, the misconceptions of the mining sector that do not allow the population to see the true image and positive impact of the sector, as well as new legislative initiatives that directly or indirectly impact the sector and its position as one of the pillars of the country’s economic recovery. Regarding the potential reforms to energy regulations, Alanis today said that should these be accepted, it would seriously impact the mining sector as this would increase energy costs, reduce competitiveness and especially affect health and the environment. “It is an issue that is being discussed a lot in CAMIMEX and I hope it will be reviewed in depth since it will not only impact mining but the entire country.”
“Mining imports and exports represent 474,000 tons of materials per year. If the mining sector is promoted, other sectors will also grow.” Fernando Alanis President of CAMIMEX
37
www.mexicobusiness.com.mx www.mexicobusiness.news www.mexicobusinesspublishing.com www.mexicobusinessevents.com www.mexicobusinesscommunication.com www.thehiddenkitchen.mx
CONTACT
Isabel Adame ia@mexicobusinesspublishing.com +52 1 55 4991 2856 Fortuna Orozco fo@mexicobusinesspublishing.com +52 1 55 5263 0218