CAN YOU DIG IT

Mexico 2019 | MINING | INTERVIEW

Though certain policies of the new administration differ from those of the past, Mexico's mining giants have worked hard to establish community relations that withstand changes in government.

Oscar González Rocha
BIOGRAPHY
Oscar González Rocha was included in the American Mining Hall of Fame in Tucson, Arizona in 2016 and in the Mexican Mining Hall of Fame in October 2017. He is a civil engineer with a degree from UNAM and is CEO and President of Southern Copper Corporation, a subsidiary of Americas Mining Corporation within Grupo Mexico.

What is the new administration's vision for the Mexican mining industry?

The government has good intentions to promote investment in mining as well as increase production for the benefit of the country. Initially, it will focus on increasing the taxes the federal government receives for mining production, a policy toward which our company will contribute greatly given that the new Buenavista del Cobre concentrator is already operating. It is the largest concentrator in Mexico and was part of a USD3.1-billion investment over two years that is already producing more than 110,000 tons of milled minerals per day. With that investment, the people of Sonora are receiving more benefits in the form of much greater tax revenues through the Mining Fund. For example, the people of Cananea received MXN240 million (USD12.6 million) to invest in infrastructure. Yet, the current government seems to want to change this and use the money in other unforeseen ways.

What advantages does Mexico offer the mining sector?

The water we need generates one of the highest costs because the government is in charge of it. In Peru, water is cheap, and in the US, we pay nothing because the owner of the land owns what is underground. Other than that, in Mexico, there are not as many problems with the communities as in other countries. We had some problems in the past with the ejidos, communal farming land, and there are still occasional problems when we need to buy their land, as they want to sell at high prices. However, states with a mining history and knowledge about the sector are in favor of attracting foreign investors. For example, Sonora has many investors from Canada.

What are the company's international expansion plans?

We are looking at entering Ecuador, Argentina, and Chile and working to continue developing the ASARCO mines in Arizona. Mexico will continue to play a central role, as this is where the headquarters of the group are located. We have a railroad throughout the state of Florida in addition to the railroad in Mexico we have with Ferromex from Mexico City to the border, not to mention our railroad to Mérida. We also have an infrastructure subdivision part of the group that includes a construction and an engineering company. Moreover, we drill in the sea and on land for Pemex. There are certain benefits for us to make investments in energy. At present, we generate enough energy to serve our projects and generate some cash flow by selling the rest. We produce energy from gas and wind in the Isthmus of Tehuantepec and want to do a solar energy project in northern Sonora for Mexicana de Cobre and Buenavista del Cobre. Two-thirds of Americas Mining Corporation's production was in Mexico and a third in Peru. In the latter, it will improve thanks to the Toquepala concentrator, which will increase production by up to 100%.

Which of your projects in development are about to start producing in Mexico?

We are just about to start the Buenavista zinc project, which will export zinc and copper reserves. We need to extract those reserves to continue exploring the copper that is underneath. In 2019, the construction of that plant begins, and it will take about two years before it starts producing zinc. With this production and that of our underground mines here and in Spain, we will produce a significant amount of zinc for Grupo Mexico.