MINING SERVICES

Mexico 2016 | ENERGY & MINING | B2B

Mexico remains one of the top five mining destinations in the world for international investors

Héctor Hugo Miranda
HÉCTOR HUGO MIRANDA
Country Manager
Orica Mexico
Leif Lindholm
LEIF LINDHOLM
Vice President Mexico, Central America, and the Caribbean
Metso Mexico

What is the importance of Mexico to your firm globally?

Héctor Hugo Miranda Orica's international operations are divided into four zones: Australia and Indonesia, North America, South America, and the fourth zone is made up of the rest of the world, mostly Europe, the Middle East, and Africa. Mexico is a part of our North American zone. Although the country is our third largest market area in North America, it is an area of rapid growth.

Leif Lindholm Mexico represents a little over 10% of the global business, maybe 15%; therefore, Mexico is important for the company. As we still see possibility for growth, from here we have a major project for a copper mine in Panama that will go online in about two years. And, of course, a second plant is starting up in Cananea in the northern state of Sonora, where we still see great potential. Sonora and the Cananea mine represent 35% of our business, making it an important center for us.

Has your business been affected by stagnant commodity prices?

HHM Our growth has definitely decreased in the last few years, but we have nevertheless continued expanding our work in Mexico with copper, gold, and coal. Copper is our fastest growing market, due to investments from Grupo Mexico, and the country is also growing strong in gold. Coal has unfortunately not grown as much. Silver remains an important part of the local economy, as Mexico is still the largest producer of silver in the world.

LL I would say that it is a more normal environment today. Most mines are still working despite the difficulties the industry has seen. There aren't as many new projects going on now as they used to before but I do not see it as a negative, since our service business is still growing. Now, the industry has moved more toward the services sector, and we started that business 10 years ago so we are ahead of most of the competitors.

How do you integrate environmental concerns into your operations?

HHM Environmental preservation is key for us. We have a comprehensive environmental impact plan worldwide and we are subject to global supervision. We respect and abide by all the environmental regulations of any country in which we operate, and we are strict in terms of applying our own standards, which are even higher than those of many governments.

LL When it comes to the global environmental issues in the mining industry, Mexico has been doing well. Without a fair level of precautions, it will be more and more difficult to get permits to build mines; hence, future trends point at a reduction and reuse in water consumption. Metso has a strict program for these things, mostly because it is a Finnish company, and we are aware of the environment.

What is your outlook over the medium term?

HHM We are the main player in Mexico and North America. To maintain our leading position and market share, we have to find new ways to grow ever faster and we are prepared to help modernize the mining sector in Mexico. We are convinced that we can help this industry become more competitive and we want to introduce technologies to facilitate that. We can contribute not only new technologies related to equipment or products, but also knowledge transfer and practical know-how. One of the advantages of being the big player in the country is that we can bring best practices into the sector here. We want to set the standards in the market and introduce new methods and technologies into all areas of mining, be it blasting, hauling, digging, transporting, crutching, milling, or leaching.

LL We need to ensure that we keep growing, especially in the service area. This is a cyclical business; therefore, we will not see very many new projects in the following years. As long as the economy continues to grow, the mining industry will still be there. Mexico still has areas that have not been explored yet, leaving room to grow. We still have a lot to do with existing customers. Most of the mines in Mexico are our customers, though not all of them are in the same area as they should be. We are currently getting close to Frisco to deepen our ties. We still have a lot do to, especially with the smaller companies, many of which are Canadian-owned. I see a great future for our business.