Mexico Mining Forum 2019 Impact Report by Mexico Business Publishing

IMPACT REPORT

2019

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2019 Mexico Mining Forum is a high-profile congress that gathers together the national and international leaders shaping Mexico’s mining sector. Taking place each year in Mexico City, this event provides an invaluable opportunity for sector experts to discuss the industry’s hot topics and concerns in an effective and targeted networking platform.

In its fourth edition, Mexico Mining Forum 2019’s agenda was carefully designed by expert analysts and in consultation with business insiders to address the future of the mining industry amid the country’s political transition. Ranging from financing prospects for every kind of project and the achievements of mining clusters, to how best to enhance mine security and implement effective CSR programs, Mexico Mining Forum provides eye-opening outlooks to all industry stakeholders. Through the contribution of 22 high-profile speakers, including Mexican mining’s top public officials, the dialogue among the event’s high-level and executive guests will result in a constructive and beneficial conversation for the industry.

Mexico Mining Forum also marks the launch of Mexico Mining Review 2019, compiling over 200 interviews, indepth analyses and infographics to offer companies the business intelligence they need to seize the industry’s opportunities. An additional special supplement also brings together the sectors’ voices in a Wish List to the AMLO administration, with suggestions of what mining needs the most from the new government.

2020

Quick Look:

“Fue un privilegio poder asistir y escuchar ponencias tan interesantes y diversas” Sergio Almazan, Director of ANZMEX

INCLUDING: ∙∙ Francisco Quiroga, Undersecretary of Mining at the Ministry of Economy ∙∙ David Guillén, Founding Partner of Rios Ferrer ∙∙ Renato Urresta, Principal Consultant at ERM ∙∙ Napoleón Gómez, Senator of the Republic

22 TOP SPEAKERS

∙∙ Rob Peterman, Vice President, Global Business Development at Toronto Stock Exchange (TSX) ∙∙ Cindy Collins, Founder of Mining Technology Partners and CTO of Geosite ∙∙ Alberto Mendoza, Director of Zacatecas Mining Cluster ∙∙ Alberto Orozco, President of the Sonora Mining Cluster ∙∙ Alfredo Philips, President of the Guerrero Mining Cluster ∙∙ Guido Mangieri, Director of IIoT, Plantweb and Digital Transformation at Emerson

TICKET PRICES FOR 2020

Super Early Bird Rate MX$14,000 + IVA (until 20/12/2019) Early Bird Rate MX$16,000 + IVA (until 17/01/2019) Conference Rate MX$20,000 + IVA (until 12/02/2019)

Get your 2020 tickets now: www.mexicobusinessevents.com

223 COMPANIES REPRESENTED

“All the information was great for me, very satisfied” Dante Aguilar, Director and founder of GEOTECH

350

PARTICIPANTS

“We can collaborate toward peace, justice and prosperity, which will be the legacy of the new administration” Francisco Quiroga, Deputy Minister of Mining at the Ministry of Economy

COMPA N Y AT T E N DA N C E 24HORAS

Deasarrollos ROD

HERRERA Y SATO

ABB

Deloitte Consulting

Hexagon Mining

ABControl

Delta Solutions

Hogan Lovells BSTL

Accendo Banco

Depreux, COBRA Group

Holcim

Advanced Metal Concepts

DHL

Huawei

Agilent Technologies

Discovery Metals

ICSA DIVISION MINERIA

Agnico Eagle

DMV Consultores

IDS

Alamos Gold

Dräger

IMDEX

ALFO

DSI Underground

Infraestructura Minera

Almer

Durango Ministry of Economy

Intelligent Social Investment

ALN Abogados

Eagle Mapping

Invenergy LLC

AMSU

EagleBurgmann

JOGMEC

ANAF Energy

ECN Scientific

Komatsu

Analytical Solutions

El Financiero

KPMG

ANZMEX

Elastomeros TAZA

Lasec

Argonaut Gold

Emerson

LATAM Ventures

Arizona Commerce Authority

Enestas Energy

Layher

Arsenal

ERM

Legalmex

Atomica

Esseco

LiuGong North America

Aura Minerals

Estrategias Financieras

MacLean Engineering

Auramex

Excellon Resources

Mag Silver

Austin Powder

Magna Gold

Australian Trade and Investment

Eyenesa

MAN Energy Solutions Mexico

Commission

FIFOMI

Martin Engineering

Baker & McKenzie

First Majestic

Master Drilling

BASF

FLSmidth

Matco

Belden

FMSC

Mercuria

Beltservice

Forbes (México)

MergerMarkets

Beumer Group

Fortuna Silver Mines Mexico

Metso

BIVA

Fresnillo

Mettler Toledo

Boart Longyear

Frisco

Mexican Academy of Environmental

Brinks Global Services

Ftech

Impact

Cámara Minera de México

FUCASA

Mexico Mining Review

Canada Embassy

Fullspectrum

Michelin

Canadian Chamber of Commerce in

GDI

Minera Alamos

Mexico

Geosite

Minera Cascabel

Candelaria Mining

Geotech

Minera Cuzcatlán

Carrizal Mining

GlobeXplore

Minerales Teran

CEC Mining Systems

Gobierno del Estado de Zacatecas

Minero Diesel

Cereceres Estudio Legal

GoldCorp

Ministry of Innovation and Economic

Cliveden Trading AG

Golder

Development of Chihuahua

CLUSMIN

Grupo BAL

MK METAL TRADING MEXICO

Cluster Minero de Sonora

Grupo BMV

Monarca Minerals

Cluster Minero de Zacatecas

Grupo GAP

MRI Andina Trade

Coeur Mining

Grupo Goldcorp México

MULTISISTEMAS DE SEGURIDAD

COMEX

Grupo IPS

INDUSTRIAL

Consultoria en Minería Responsable

Grupo México

Mundo Minero

Contratos Asfálticos de México

Grupo Minero Bacis

National Oilwell Varco (NOV)

Corporación Ambiental De México

Guerrero Mining Cluster

New Gold

Cyanco

Guerrero Ministry of Economy

Notimex

DBR Abogados

Gustavson Associates

Nouryon

DEACERO

Haynes & Boone

OHL Mining

Olympus

Sonora Ministry of Economy

Orica

Sotrafa

Outotek

SRK Toronto

Pan American Silver Mexico

Subsecretaría de Minería

Partido del Trabajo

Sumitomo Corporation

Peñoles

TAKRAF

Pewag

TBM

PPG

TDM Mexico

Prodexa

Techint

PROFEPA

Teck Resources

Proméxico

Técnica Salgar

PwC

Telson Mining Corporation

RAMADASA Desarrollo Sostenible

The Business Year

RB Abogados

The Chemours Company

REFORMA

The Economist

RH Shipping

Thermo Fisher

Rios Ferrer

This is noble

Rockwell

Timken de Mexico

Sandvik

TMC (TRANSPORTES MINEROS DEL COBRE)

Santa Cruz Silver

Top Energy

Santamarina Steta

Torex Gold

Schneider Electric

Toronto Stock Exchange

SECOPSA

Trafigura

Secretaría de Economía

Trafigura México

Seequent

V&A Ambiental y Social SC

Senate

Vander Capital

SGS Minerals Services

VDMV

SHB Perforaciones

VEGA Measurement

Siemens Mining

VHG Servicios Legales

SITRAK

Victaulic

Sitsa

Vinton Steel

SKF

Vulkan

Solenis

W.W.WILLIAMS SOUTHWEST DE MEXICO

Soluciones Ambientales

Wood

Solum Consulting Group

Zacatecas Mining Cluster

Sonora Mining Cluster

Profile of Attendants

60% C-Level 40% Upper Management

Satisfaction Level

38% Very Satisfied 50% Satisfied 6.2% Neutral 1% Dissatisfied

Most Valuable Element

36.4% Presentations 40.4% Quality of Speakers 23.2% Networking Opportunities 4% Organization

P R O GR A M

08:00 REGISTRATION 08:30

A NEW VISION FOR THE INDUSTRY – SEXENNIAL OBJECTIVES

Speaker:

Francisco Quiroga, Undersecretary of Mining at the Ministry of Economy

09:00

GRASSROOTS APPROACH TO CSR: HOW TO ADEQUATELY INVOLVE COMMUNITIES AND SOCIETY IN PROJECTS

Moderator:

David Guillén, Founding Partner of Rios Ferrer

Panelists:

Renato Urresta, Principal Consultant at ERM

Mario Salomón, Country Manager of Multisistemas de Seguridad Industrial

Luiz Camargo, Director of Finances and Corporate Affairs of Minera Cuzcatlán

José Antonio Berlanga, CEO of Telson Resources

10:00

NETWORKING COFFEE BREAK

10:30

INDUSTRY INSIGHT ON STRENGTHENING MEXICO'S SUPPLY CHAIN

Moderator:

Hector Quezada, Director Mexico of Victaulic

Panelists:

Alberto Mendoza, Director of Zacatecas Mining Cluster

Alberto Orozco, President of the Sonora Mining Cluster

Alfredo Phillips, President of the Guerrero Mining Cluster

11:30

THE DIGITAL TRANSFORMATION IN MINING

Presentation: Guido Mangieri, Director of IIoT, Plantweb and Digital Transformation at Emerson 11:45

NETWORKING COFFEE BREAK

12:15

OPEN-SOURCED DATA: THE INDUSTRY'S NEXT FRONTIER?

Moderator:

Cindy Collins, Founder of Mining Technology Partners and CTO of Geosite

Panelists:

Antoine Caté, Structural Geology Consultant at SRK Toronto

Danté Aguilar, Founder and Director of Geotech and Exploration Support

Lynda Bloom, President of Analytical Solutions

Ben Pullinger, Senior Vice President of Geology at Excellon Resources

13:15

NETWORKING LUNCH

14:45

CLOSING THE GAP BETWEEN CAPITAL AND PROJECTS

Moderator:

Sara Warden, Senior Editorial Manager at Mexico Business Publishing

Panelists:

Carlos Silva, Director General of Carrizal Mining

Robert Peterman, Vice President, Global Business Development at Toronto Stock Exchange (TSX)

Alfredo Tijerina, Director of FIFOMI

Javier Reyes, Chairman of Accendo Banco

15:45

HUMAN CAPITAL: THE PEOPLE BEHIND THE PROJECTS

Speaker:

Napoleon Gómez, Senator

16:15

NETWORKING COCKTAIL

HIG HL I G HTS 20X X

KEY SPEAKER

GOVERNMENT ADOPTS ACTIVE ROLE IN THE INDUSTRY Hoping to give certainty to industry participants, Undersecretary of Mining at the Ministry of Economy Francisco Quiroga showcased the government’s strategy to work toward a mining sector that can work harmonically to contribute to the country’s pacification and reconciliation. “We can collaborate toward peace, justice and prosperity, which will be the legacy of the new administration,” he said on Wednesday during the keynote speech of Mexico Mining Forum 2019 at the Sheraton Maria Isabel Hotel in Mexico City.

FRANCISCO QUIROGA

Quiroga opened his presentation acknowledging that perception regarding the national

Deputy Minister of Mining at

mining industry is taking on negative connotations. To fix this, the new administration

the Ministry of Economy

at the Undersecretariat has established an industry policy that includes all players and

Francisco Quiroga has more than 18

has a long-term vision focused on innovation, diversification and inclusion. According

years of experience in relation to the

to Quiroga, the Undersecretariat of Mining will be at the helm of this transformation,

mining industry. He has a background

acting as “a leader and facilitator for the industry and as a mediator when needed in

in directorial positions at several major

an honest and impartial manner.”

mining-metallurgical companies, such as Villacero, ArcelorMittal and

All public industry agencies will have a role in strengthening the national industry, said

Metalcorp. His history with the Ministry

Quiroga. The Directorate General of Mining, for example, will work on fixing its processes

of Economy dates back to 1997 when

and working toward digitalization. “Our response times are an embarrassment and

he served as Trade Remedies Director

an obstacle in project development and termination,” he says. “By the end of the

in Safeguards and Antidumping

administration, we want full digitalization of paperwork, which will help us tackle the

until 2002. Quiroga studied a BA in

backlog in concessions.”

Economics at UANL, has an MA in Economics from Yale University and

Quiroga also mentioned the Mexican Geological Survey, which he says will become

MS in Operations Research from the

an industry authority with credibility, and the Mining Trust Fund, which will have the

University of Auckland.

mandate of ensuring funds reach communities, thus maximizing the opportunity of new projects being welcomed. Among its general goals, the Undersecretariat wants to implement new models based on best industry practices and sustainability. Quiroga highlights Canadian TSM standards as a way to improve the industry in Mexico, as well as closer collaboration with communities to help projects move forward and make mining a driver for economic development. “Even when we get a ‘yes’ from communities, that sometimes turns into a ‘no’ due to lack of communication and participation,” he said.

The Undersecretary was not afraid to address the elephant in the room as well, saying that the country must break the stigma regarding mining and the ideas on lack of safety. Under the new administration, Quiroga says the government will work to eliinate fatalities or natural disasters caused by mining activities, mainly through direct and honest communication between government dependencies and with the private sector. “We want to look forward and find solutions to the industry’s problems, creating alliances with the private sector and

“A leader and facilitator for the industry and as a mediator when needed in an honest and impartial manner.” Francisco Quiroga, Deputy Minister of Mining at the Ministry of Econom

with other government institutions and consolidating wills and mindsets,” he said. “Our sole objective is to boost the mining industry for the benefit of the country.”

COMMUNICATION BETWEEN MINING COMPANIES AND COMMUNITIES: KEY TO A MINE’S SUCCESS

KEY SPEAKER

Many complex calculations lay behind the success of a mining project. Chief among them is the relationship with the local community. A good relationship can mean smooth sailing, while a troubled one might lead to delays and even mine closures. During the fourth edition of Mexico Mining Forum, panelists agreed on the importance of this relationship and analyzed best practices to ensure a successful approach and impact on the local community. “Involving society in the mining process is now a real demand that requires the participation of the entire industry,” said Moderator David Guillén, Founding

JOSÉ ANTONIO BERLANGA

Partner of Rios Ferrer, on Wednesday at Sheraton Maria Isabel in Mexico City.

CEO of Telson Mining Corporation

Guillén highlighted the importance of the sector to Mexico’s economy, especially

José Antonio Berlanga began his career

considering that it represents 4 percent of the country’s GDP.

at Minera Autlán, in the Molango Unit,

The economic impact of the mining industry goes far beyond its mayor players. He

fundamental changes in the production

adds that 70 percent of Mexico’s mining sector are micro companies with less than

system to increase production and

10 employees and highlights that these economic benefits can also trickle down to

savings. Later, he worked at Peñoles,

the community living next to a mining project. However, change is often seen with

where he participated in the evaluation,

distrust so companies must ensure that communities feel involved in the changes

design and construction of several of

that are happening to their surroundings.

the group’s mining units. In Sonora,

where he designed and implemented

Berlanga started one of the first gold The relationship between operators and the community is key to the mining

heap leaching operations in Mexico at

company, explained Luiz Camargo, Director of Finances and Corporate Affairs of

the La Amelia Mine. As an entrepreneur,

Minera Cuzcatlán. He quoted a study by EY that identified “permission to operate”

he has attracted tens of millions of

among the Top 10 major risks for a mining company, which refers not just to

dollars in investment to Mexico.

government approval but permission from the local community where the mine is located. José Antonio Berlanga, CEO of Telson Mining Corporation, agreed on the relevance of involving communities from the start of the project. “It is necessary to begin projects by communicating with local communities or they can halt these projects,” he said. Renato Urresta, Principal Consultant at ERM, did not skirt he image issues that might pose concerns to local communities. “The mining sector is a development engine but it is still controversial. One of the reasons is its strong link to poverty, as communities close to mining projects have a 76 percent poverty rate.” However, he highlighted the role mining projects can have in improving said communities. “It is necessary for companies to work closely with local governments to empower these mining communities.”

HIG HL I G HTS 201 9 Through research of the social impact of the mine it is possible to create

“It is necessary for companies to work closely with local governments to empower these mining communities” Renato Urresta, Principal Consultant at ERM

strategies to act in the area and develop agreements with local communities to develop win-win situations for both parties, agreed Camargo. As mines can last for up to 50 years, staying for long terms allows companies to develop complex community projects to empower the local population, explained Urresta. He called on the audience to analyze their own engagement plans with local communities and measure their impact. The speaker highlighted the importance of developing social engagement teams from the beginning of the project that support community from the beginning. “If we don’t develop social engagement plans, the mining sector will face an increased resistance in local communities.”

The impact of a good relationship might extend far beyond he company and the community. “Companies generate platforms alongside the local authorities that lead to the pacification of the state,” said Camargo referring to Mexico’s insecurity concerns and how they affect mining companies. Mario Salomón, Country Manager of Multisistemas de Seguridad Industrial, agreed on the three-part link between mining operations, community and safety. “The most important aspect of security is prevention, for that reason we strongly promote personal responsibility among our employees,” said Salomón. All speakers agreed that a mine’s success often relies on fully understanding the area it is located in. Camargo used a project in Oaxaca as an example. As the region has a significant number of indigenous communities, the company performed a comprehensive sociological study to fully understand local customs and develop strategies to promote social development. The other speakers agreed, with Berlanga going on to summarize the panel. “The most important thing is to ensure close communication with the community at all times.”

ALLIANCES AND INNOVATION TO BOOST MEXICAN MINING SECTOR The success of any business lies on the strength of its supply chain, and mines are no different. The mining industry’s value chain is a key area of opportunity for Mexican companies and none more so than operators who are the top stakeholders. During Mexico Mining Forum 2019, which took place in the Sheraton Maria Isabel on Feb. 6, panelists discussed the importance of creating stronger alliances throughout not only the supply chain, but also with government and educational institutions to truly foster the growth of the Mexican mining industry. During the event, Hector Quezada, Director Mexico of Victaulic, led the discussion of the panel that discussed strengthening Mexico’s supply chain to understand the importance of technology, education and innovation in the mining supply chain and the role clusters are playing. Although the clusters are rather young, the Zacatecas, Sonora and Guerrero Mining Clusters are working arduously to professionalize SMEs and promote the use of technology to boost the efficiency of the sector, the participants agreed. “Clusters play a vital role in the mining sector and in the last few years we have focused greatly in the evolution of local companies and assisting them to professionalize their processes with the help of educational institutions,” said Alberto Mendoza, Director of Zacatecas Mining Cluster.

As for the Sonora Mining Cluster, its main focus has been sustainability. It is currently the only mining association that is certified in Social Responsibility, striving to take down barriers between local communities and miners. Alberto Orozco, President of the Sonora Mining Cluster, discussed how the cluster is identifying indicators that will help find areas of opportunity within the supply chain and monitor how companies are flourishing and how to help them grow even faster. The Guerrero Mining Cluster is the youngest cluster in Mexico. “The state’s situation is far more complex due to the insecurity problems that exist. Our main goal is to help protect investments and help them grow,” said Alfredo Philips, President of the Guerrero Mining Cluster. The vast majority of the companies in Guerrero are small and have only one asset in operation. Professionalization is a priority for the cluster, but the state’s unique situation makes transparency extremely important in order to not only attract more investment, but to retain it. Integrating new technologies is a great challenge for Mexican mining companies and requires a great deal of training. Each cluster is approaching universities and

KEY SPEAKER

research centers to create more learning and training opportunities for miners. The Zacatecas Mining Cluster is currently developing a research and science center to help companies bridge their technology gap. Guerrero is working toward creating specialized programs to help increase local companies’ skills. All clusters agreed that exploration activity has declined in the last few years and this is beginning to pose an important challenge for the industry. Orozco explained that Sonora experienced a boom in 2012 where it created great value, new mines opened and renewed operations. Nevertheless, many are reaching the end of their life cycle and have yet to generated new reserves. “We need to place a bet on exploration to

ALBERTO MENDOZA

continue generating jobs,” said Orozco.

Director of Zacatecas Mining Cluster Alberto Mendoza is the Director of

All panelists agreed that 2019 will be a year of collaboration, where the mining clusters

CLUSMIN. Prior to joining the cluster,

will all prosper together. “But it will not be the same alliances and collaboration as

he was Director and Founder of the

before. More players will be involved, including NGOs, mayors, municipal presidents

Monterrey Institute of Technology and

and educational institutions,” said Phillips.

Higher Education (ITESM) Fresnillo Campus. Mendoza is also a member

This also involves a closer relationship with communities. Orozco insisted that

of the Board of Directors of the

companies will have to step out of the box to not only integrate technology and

Zacatecas’ Polytechnic University and

innovation, but to integrate communities in order to be truly sustainable. “The

a member of Conacyt’s Technical and

community aspect needs to be done correctly from the very start or else it will

Administrative Committee for the

continue creating setbacks in the life cycle of a project. Everybody in the chain

State of Zacatecas. He has a Bachelor’s

must be aware of the social and sustainable implications their operations have,”

in industrial engineering and a Master’s

said Orozco.

in administration from ITESM.

KEY SPEAKER

DIGITAL TRANSFORMATION DEMANDS PLANNING, GRADUAL IMPLEMENTATION Even though IoT has become a buzzword in many industries, few players know the best way to adapt their processes to such disruption. For Guido Mangieri, Director of IIoT, Plantweb and Digital Transformation at Emerson, it is all about understanding how technology can add value to the productive process and gradually escalate implementations. “Think big but start small and measure, then replicate and amplify successful results,” he said during Mexico Mining Forum 2019 at the Sheraton Maria Isabel Hotel in Mexico City.

GUIDO MANGIERI

According to Mangieri, an Emerson survey found that 90 percent of the industry leaders

Director of IIoT, Plantweb and

interviewed thought a roadmap was critical to reaching digital transformation. However,

Digital Transformation at Emerson

78 percent of these companies also found that pilot automation systems were normally

Guido Mangieri is an accomplished

hard to homologate with other processes. “Scalability is key,” says Mangieri, “as well as

business executive with over 18 years

investment in human capital development.”

of experience in the automation industry. He is Director of Industrial

Following Emerson’s roadmap toward digital transformation, companies must first map

Internet of Things (IIoT) and Plantweb

their KPIs in four key areas: safety, reliability, productivity and energy and emissions,

Digital Ecosystem for Latin America

coupling results with KPIs regarding two enablers: organizational effectiveness and

at Emerson, a role through which

systems and data. “Mapping these indicators can help to develop a vision regarding the

he leads digital transformation,

future of the company, providing a roadmap to gradually incorporate manual inspection,

operational and project programs to

equipment monitoring, predictive analysis, all the way to full automation,” says Mangieri.

help technology and manufacturing

“You cannot control what you do not measure.”

companies achieve top-quartile positions in their markets. Mangieri

Referencing Emerson’s survey, Mangieri said over 60 percent of all companies

holds a BS in chemical engineering

interviewed think IoT is ready for industrial applications and highlighted the US$430

from Instituto Tecnológico de Buenos

billion opportunity that exists in improving project performance. However, he also

Aires and an MBA from Universidad

acknowledged there is still some reluctance to board the innovation train. According

Torcuato Di Tella.

to Emerson’s survey, most companies consider risk aversion and conflict with status quo their main obstacles to implementing disruption and innovation, while budget constraints are among the least important reasons. Coercing players to make a change, Mangieri used a well-known game theory model named the Prisoner’s Dilemma to exemplify what could happen to companies that fail to adapt to new technologies. “If everyone innovates, there will be a maximization of market benefits,” he said. “However, if a company fails to adapt, it will lose its position in the market.”

BIG DATA CAN HELP THE MINING INDUSTRY, IF THE INDUSTRY LETS IT

KEY SPEAKER

Thanks to technology, companies are increasingly acquiring real time information that allows them to make faster decisions that directly impact their profitability and expenses. While some of the of the principles of IoT are increasingly reaching the mining sector through specialized tools that measure and process real time data, companies have been reluctant to fully implement this technology, agreed panelists on Wednesday at Mexico Mining Forum 2019. “Realtime information will become essential to mine operations,” said Cindy Collins, Founder of Mining Technology Partners and CTO of Geosite. “Technology is placing

CINDY COLLINS

us closer to real time information from the field. We can use this information to make

Founder of Mining Technology

important real time drilling decisions such as continuing drilling or move to another

Partners and CTO of Geosite

place.” She explained that companies can use real time data to better understand

Cindy Collins moved from Canada

the mineral potential of a site and avoid wasting money drilling in the wrong place.

to Mexico in 2015 as a technology-

Considering the numerous advantages, she asked panelists: “why has this methodology

focused business development

not been widely adopted?”

professional in the mineral

Lynda Bloom, President of Analytical Solutions, recognized the potential of new

She has studied civil engineering

measuring equipment to provide faster information with which to make decisions.

technology, information technology

However, the information the equipment provides is still not sufficient, she added. Ben

and business and has been an adopter,

exploration and mining industry.

Pullinger, Senior VP of Geology at Excellon Resources, agreed. “Handheld equipment

user, implementer, recommender

allows for precise measuring of small samples but a comprehensive analysis is still

and representative for various

required before starting operations,” he said.

technologies, from data management to field instrumentation. She recently

Another barrier to the complete implementation of IoT in the mining sector is cost.

launched her company and podcast,

Antoine Caté, Structural Geology Consultant at SRK Toronto, explained that “adopting

Mining Technology Partners.

new technology requires time and money. If everything is going well in an ongoing project, the company does not want to try anything new. It will only do so if there is a problem, however by that time it is often late.” The investment goes beyond the acquisition of equipment as companies must train their personnel on the use of the new machines. “Adopting new technology might feel quite threatening because it involves changing people’s jobs,” said Bloom. The problem, summarized Pullinger, is that no one wants to be the first. “Often early adoption comes at high costs, while adopting it later often means that

Exploration Support. Caté agreed. “By not using this technology we can

“Handheld equipment allows for precise measuring of small samples but a comprehensive analysis is still required before starting operations”

lose a lot of money. Having this information might allow a company to

Ben Pullinger, Senior VP of Geology at Excellon Resources

there are more people that already are proficient with the software.” However, ignoring the data can also be expensive. “With more data, you can make more decisions. So, it is necessary to factor the cost of lacking this data in the operation. Without using the data, companies will spend more money,” said Danté Águilar, Founder and Director of Geotech and

decide whether to continue drilling or not.” Once companies decide to adopt the technology, the next challenge to address will be processing all that information. “Information will come from many different companies, all with different ways to upload this data. The mining industry uses a lot of proprietary software, so data collected by one source cannot be read by another,” said Caté. However, once the initial investment is made, data collection will benefit many across the sector. “There will be a large amount of data, true, but different people will want different things from this data. Specific tests can only be used for a specific reason but a single data set can address the needs of many different people,” he added.

HIG HL I G HTS 201 9 KEY SPEAKER

BRIDGING MINING FINANCIAL GAP THROUGH BETTER COMMUNICATION Within the mining industry, raising funds is an arduous task. The industry has capitalintensive projects with high risks that not all financial institutions are ready to take on. During Mexico Mining Forum, which took place on Feb 6. at the Sheraton Maria Isabel hotel in Mexico City, panelists discussed how the industry could come together to close the gap between capital and mining projects in Mexico. FIFOMI is Mexico’s mining development bank and is usually the gateway for companies entering the industry. “We want to be the seed of the industry through supporting

CARLOS SILVA

micro companies in Mexico which is one of the most unattended sectors. It is a sector

Director General of Carrizal Mining

that requires a great risk and in order to provide them with the necessary support, we

Carlos Silva is a mining engineer with

must create alliances with government entities to share the risk,” said Alfredo Tijerina,

expertise across various areas of the

Director of FIFOMI.Sara Warden, Senior Editorial Manager of Mexico Mining Review

mining environment, including social-

led the discussion on how financial institutions are adapting to the unique needs of

political, labor safety, environmental,

mining companies and how the industry itself can obtain more funds. Throughout the

productivity and efficiency of

discussion, the need to better communicate financial options and to provide industry

operations, financing and accounting.

specific solutions were the main points of discussion.

He is Founder and Director General of Carrizal Mining, which operates

The Mexican financial market continues to develop but some mining companies such as

the Zimapan mine in Hidalgo, as well

Carrizal Mining have found it easier to raise capital through international stock exchanges.

as being Director General for Tres

“On TSX there are 130 issuers that have a project in Mexico. The blend between Mexican

Generaciones de Mineria, a mining

and Canadian expertise adds great value. We are seeing a great amount of family-owned

service provider with expertise in

businesses looking to list on the stock exchange and more and more private equity

mine construction. He is also COO of

companies are also looking to share the risk,” said Rob Peterman, Vice President, Global

Santacruz Silver.

Business Development at Toronto Stock Exchange (TSX). From the perspective of an operator, Carlos Silva, Director General of Carrizal Mining believes that the country’s lack of financial structure specialized in mining makes it difficult for companies to raise funds. “As a Mexican mining company, it was difficult to receive funds to carry out our projects, but when we became a public company, funds poured in. We were able to invest US$60 million in the span of three years. This was because utilities were reinvested in the company constantly. The type of money the industry needs is only available in the stock exchange,” said Silva.The complexity of the Mexican market encourages the specialization of financial institutions. Accendo Bank has been in the market for over 20 years and has participated in many

“Miners are going to institutions that have the best communication. We must start tearing down communication barriers and allow information to flow freely throughout the industry”

mining operations. “We have an expertise that I believe is unique in the industry. We look to banks such as FIFOMI as allies,” said Javier Reyes, Co-CEO of Accendo Banco. But with institutions such as these, Warden asked if the financial gap was instead a communication gap between the funding sector and the miners. According to Tijerina, there is a communication gap and a lack of information to the industry. “Miners are going to institutions that have the best communication. We must start tearing down communication barriers and allow information to flow freely throughout the industry,” he said.

ALFREDO TIJERINA, Director General of FIFOMI “The financial gap is not covered and it is the biggest area of opportunity in the industry. There are signals that the cycle is changing, and with it will flow more capital. There are few Mexican companies willing to take the leap to become a public company, and it is not just in the mining sector. As long as companies keep doing the right thing and setting the example, more money will continue to flow,” Reyes concluded.

HUMAN CAPITAL IRREPLACEABLE ASSET

KEY SPEAKER

Echoing the plan stated by the Undersecretary of Mining at Mexico Mining Forum 2019 at the Sheraton Maria Isabel hotel in Mexico City, Napoleón Gómez, Senator and President of the Congress’ Work and Social Provision Commission, highlighted the importance of a social approach in mining operations and the role of human capital in boosting efficiency and productivity. “To this day, all government offices tout growth in the mining sector, as well as the new technologies being implemented to boost efficiency. However, very few mention the role of human capital in this process. Human capital is the most important asset of any company,” said Gómez during the closing presentation of the forum.

NAPOLEÓN GÓMEZ Senator and President of Work and

According to Gómez, the country must integrate innovation and human development

Social Provision Commission

strategies to boost social development, not only because of social justice but to boost

Napoleón Gómez is a Senator of

demand and purchasing power. To do this, however, the country needs a new corporate

Mexico and President of Congress

culture more in line with social and environmental issues. Gómez highlighted security as

Work and Social Prevision Commission.

one of the main national issues that could be addressed through mining development.

Prior to his work in Congress, he was

“Mines are normally located in remote areas with limited access to economic activities,”

Director General of the Mexican Mint

he said. “If workers are deprived of the opportunity to participate in mining activities,

for 12 years. Gómez also served as

they tend to turn to criminality.”

Secretary General of the Sindicato Nacional de Trabajadores Mineros,

There is political will to help the mining sector grow but this must be done with a

Metalúrgicos, Siderúrgicos y Similares

social approach, based on education, human capital development and environmental

de la Republica Mexicana. He has

sustainability. “In many industries, client is king. However, we should make human

been awarded several international

capital the main focus of our operations,” he said. “By doing this, we will see a result

prizes, including the Meany-Kirkland

in productivity and the image of the company.” Gómez also put countries like Finland

Human Rights International Award.

and Chile as examples of how a social approach can make Mexico a leader in welfare and mining productivity. Safety and security are also key topics for legislators according to the Senator, especially considering the working conditions in this industry. “Mining has always been the most dangerous activity in the national economy, which is why it is imperative to reduce risks and improve safety and hygiene standards in the industry,” said Gómez. The topic is already on the government agenda, as well as the potential risk that growing automation and Industry 4.0 could pose to human labor. According to Gómez, the global automation rate will increase from 33 percent to 75 percent in the next fie years, leaving 47 percent of all workers in North America at risk of losing their job. He is positive about the industry’s future, though, saying “there is no technology or artificial intelligence that could replace the human workforce in its entirety to this day.”

2020 SHERATON MARIA ISABEL MEXICO CITY FEBRUARY 12 , 2020

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