MEXICO - Energy & Mining
CEO, Industrias Peñoles
Fernando Alanís is the CEO of Industrias Peñoles, a 132-year-old Mexican mining company that specializes in base metals. He previously served as Executive Vice President of Metals and Mining Division of Industries Peñoles. He holds a degree in industrial chemical engineering from the Universidad Iberoamericana.
It is a project of Fresnillo and Peñoles, and we are pursuing an internal coordination with several objectives. The first is to achieve a change of culture in both companies with three fundamental characteristics: accountability, promoting an environment of co-creation, and fostering interdependence. It is important to understand that we work in a joint ecosystem; everyone depends on others. In the meantime, there have been many situations of uncertainty, one of which is COVID-19. We want to have a company that is able to quickly respond to those situations and handle them when they arise. We want to not only limit the effects of uncertainties, but also take advantage of them. In Baluarte, there is an area that is dedicated to this. Another area focuses on how we can be indispensable to our key stakeholders and form strategic relationships with them. We have identified four key stakeholders: our people, namely our employees and the contractors who work with us; unions; communities; and the government. We want them to feel that Peñoles-Fresnillo is essential to them. For example, we want to work together with the community in order to create a shared future project. The mining industry will one day end, and we do not want to leave ghost towns. We want the communities to develop their skills and abilities. With our people, meanwhile, our goal is to understand them in a holistic way. Our team will naturally be more productive if they are well taken care off. The other issues that Baluarte brings is that we want to generate growth opportunities. Peñoles and Fresnillo have grown organically, and we want both companies to grow more aggressively. We are open to contracting with other mining companies. We have just developed a new business section. Our intention is to create a global mining company, and our vision is to be a leader in our sector. There are four characteristics that should distinguish us from others: the quality of our processes, the quality of our products and services, the excellence of our people, and the ethical conduct of our actions. The last area that is integrated is technology and innovation, which includes the design of the mine of the future. That is part of my responsibility. That is Baluarte Minero.
During COVID-19, we realized the importance of China in all production chains. It will take time for the consumption and production chain to re-engage. Furthermore, China is a large consumer of metals, purchasing almost 70% of iron ore, 50% of zinc, and 70% of aluminum. When consumption of all metals slowed down, prices fell, though gold and silver recovered quickly. Prices of all industrial metals like aluminum, lead, zinc, and manganese were badly affected until 3Q2020. Today, the danger is that there will be an energy crisis in China, which could slow down the recovery of the production chain. I am worried there might be a fall in consumption again, and that factories will come to a halt.
We have to start demonstrating efficiencies in the administrative phase. We have to automate and digitalize things more, which will help us become more efficient. We should start to see some things in culture changes and in our relationship with key stakeholders. I hope we can establish a good dialogue with the federal government. We want mining to be one of the pillars to reactivate the country’s economy. In the first semester, mining generated 40,000 new jobs. Employees were able to hold on to their jobs during the pandemic. It is a goal that the sector set for itself, and that was achieved. Mining generates opportunities in places where no one else can reach. I am optimistic for the sector.
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