VIEW FROM THE TOP |
DEVELOPMENT BANK STRENGTHENS ROLE AS A FINANCIAL INTERMEDIARY ISRAEL GUTIÉRREZ CEO of The Mining Development Bank (FIFOMI)
Q: What are the biggest challenges FIFOMI faces when it
A: We need to change the resistance that Mexican
comes to facilitating access to capital?
companies have toward participating in the stock market,
A: We are focused on strengthening our role as an
which is more common in Zacatecas, Sinaloa, Chihuahua,
intermediary between the Mexican mining industry, mining
Durango, Sonora and Guerrero. Domestic companies
companies and financial institutions, not only in Mexico but
need to learn how to invest more wisely and how to
also around the world. This is a fairly novel service in the
take advantage of the financial tools available. We will
industry. We find that we can better meet the needs of the
continue working with the BMV and taking advantage
sector if we join forces with the financial industry to provide
of the information provided by SGM. The use of these
mining companies with a wider variety of financing options.
systems has been a success in Canada for the Toronto
Banks like the Industrial and Commercial Bank of China
Stock Exchange and its distribution channels as they have
(ICBC) have contacted us in international forums with the
instant access to the country’s geological information.
purpose of connecting their investors with Mexico. We can
This is an obstacle we are working to overcome in
provide a path to achieve this. Investors and international
Mexico. We also believe that BIVA, Mexico’s second stock
banks often contact us because they know that we can
exchange, will be able to attract a great deal of capital.
ease their entrance to the country and connect them with
We believe they are committed to facilitating access to
the right companies. For example, in any given project we
capital and providing more financial tools to the industry.
can offer a credit line up to FIFOMI’s maximum limit. By collaborating with other banks, we can increase this limit
Q: How can Mexico better prove its ability to provide
and help develop the industry by financing smaller projects
long-term investments?
a lot faster. We have success stories in mining Mexican
A: To gain the trust of investors we must show economic
states like Chihuahua and Sonora.
and fiscal discipline through a well-structured model that relies on infrastructure and security. This was the
We also want to bring small and medium enterprises into the
main priority during the administration of President
spotlight to promote a healthier mining industry. But only a
Peña Nieto. We are prioritizing trade negotiations to
small number of Mexican mining companies participate in
make sure that all treaties are accurate in reflecting the
the stock market, while in other countries, such as Canada,
interests of our industries. We have a strong Ministry of
SMEs are often listed on various exchanges. We also offer
Economy with the priorities of modernizing the Public
technical assistance to small mining companies. One of the
Registry of Mining, the digitalization and automation of
biggest challenges we face is creating a more democratic
Mexico’s geological information within the GeoInfoMex
access to finance. The economic reforms that were put in
platform and the strengthening of technical and
place by President Enrique Peña Nieto helped improve
financial support to companies. In addition, we work on
this by enhancing competition and availability of better
technological models involved with Industry 4.0, which
interest rates. Such significant structural reforms naturally
benefits companies. This is extremely important given
take time to be implemented. Mexico’s financial institutions,
the fact that many companies that left Mexico during
such as BANCOMEXT, NAFIN, the Agriculture and Rural
the downturn are starting to come back now that mineral
Development Bank (FIRA), The National Development
prices are starting to rise again.
Bank for Agropecuary, Forest and Fishing Industries (FND) and FIFOMI are all working together toward achieving these goals.
The Mining Development Bank (FIFOMI) is a state-owned development bank designed to promote and modernize the
Q: What are the main areas of opportunity you have
mining industry in Mexico, particularly small and medium-sized
identified in the financial culture of the mining industry?
companies, through financial loans and other forms of support
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