| VIEW FROM THE TOP
PREDICTION OF A GENERATIONAL TALENT GAP CAUSED BY THE DOWNTURN OCTAVIO ALVÍDREZ CEO of Fresnillo
Q: What is the single greatest obstacle that Fresnillo will
stage in the future. The growing presence of the mining
have to overcome in the coming years?
industry has the possibility of changing the reality of the
A: We used to consider our growth objectives to be the
state as it will bring economic growth and quality jobs.
biggest challenge that we faced but now that we are about 248
to meet our IPO goals of doubling production in 10 years, we
Q: Why did the company decide to list on the LSE over
consider the lack of human talent to be a greater obstacle.
more traditional mining markets such as the TSX?
We have a large portfolio of projects but we consider the
A: Before deciding to list on the LSE, we thoroughly
most precious asset in our company to be our talent. The
reviewed the markets in London, New York and Toronto.
downcycle in the mining industry caused many people to
Due to the size of the listing we reduced our options to
stop working in the industry and now there are many gaps
New York and London. And then we saw that mining had
to fill in medium to high-level positions.
greater weight in London than in New York. Due to the listing being primary and a secondary, the tax implications
Q: How will the new anti-bribery and corruption legislation
also had a weight on the decision. As a Mexican company
impact the mining industry?
with more than a century in mining, it was very important
A: This is a very positive initiative not only for the mining
that despite the fact that Fresnillo would be incorporated
industry but for the entire country. We are listed on the
as a UK company, we would be able to pay all taxes of the
LSE and since day one we have had to comply with the UK
listing and then those required in Mexico. This was a strong
Bribery and Corruption Act. It is very strict but with our
priority that brought us to the LSE. We have been studying
company’s values and profile we have not had compliance
the possibility of a dual listing in another market but since
problems and we have seen and we know the benefits of
only 25 percent of our capital is in the UK market, further
following these types of norms. As a company with an
dividing this percentage would only put more pressure
already-strict governance structure we comply with this
on the liquidity of our shares. For this reason, we are not
new initiative in Mexico. The sector is responding positively
considering it at the moment.
to the legislation. Q: What would you like the new administration to prioritize Q: What does the company want to see in Guerrero before
when it comes to the mining industry?
advancing projects in this state?
A: The new administration needs to understand the
A: Security can be an issue in certain isolated areas within
importance of the mining industry in Mexico and its
the country and even though we have an interesting project
ability to compete globally with other jurisdictions.
in Guerrero we have not been able to deploy exploration in
Larger companies have the privilege of being able to
the area due to these issues. We have tried a couple of times
choose or buy projects in different countries and they
to start exploring it but unfortunately, we have experienced
prioritize investments in regions that have the best
safety problems and have removed our people from the
investment platform in terms of permitting processes,
area. Thanks to our large project portfolio we can pause our
taxes, infrastructure, mining law, clear and defined mining
efforts in this area and direct them toward less challenging
development policies and human talent. It is crucial that
regions. We hope that the area will be at a more stable
the new mining authorities prioritize strengthening the areas in which we lack competitiveness. We need to make exploration 100 percent deductible. We need an efficient
Fresnillo is the world’s largest silver producer and Mexico’s
and clear permitting process, clear rules and processes
largest gold producer. It is listed on the London Stock
for indigenous consultation when and if applicable, access
Exchange and has seven operating mines across Mexico. In
to land policies and guidelines and a reduction in security
2017, it produced 58,7 million ounces of silver
issues to lower the cost of operations in Mexico.
