Although the remaining presidential candidates did not directly address the mining industry at their second debate on Sunday, they touched on topics that can impact the wellbeing of the sector, such as minimum wage and increasing Mexico’s competitivity through infrastructure and commerce. The debate, held in Tijuana, was conducted in three blocks: foreign trade and investment, border security and the fight against transnational crime and immigrant rights.
In Mexico Mining Review’s last update on the presidential election, leading experts in the industry analyzed three possible scenarios for the sector based on who gets elected.
With Margarita Zavala no longer in the race, the focus of the debate was centered on the top three candidates: Andres Manuel Lopez Obrador (AMLO), Ricardo Anaya and Jose Antonio Meade. The discussions represent an important opportunity for the candidates to gain more votes and promote their proposals as Mexico’s chance to choose its next president on July 1 approaches.
MINIMUM WAGE AND EMPLOYMENT
According to the OECD, Mexico has the highest level of inequality in Latin America. Two of the candidates agreed that it is necessary to increase the minimum wage in Mexico. Ricardo Anaya proposed to immediately increase the minimum wage to MX$100 from MX$88 and to double it during a period of four years. AMLO said he would “double the minimum wage in the northern border as it is unfair that Mexicans can earn up to 10 times more in the US than in Mexico.”
Anaya concluded by saying it is not just about having more jobs but making sure they are well paid, which is an area that the Mexican mining industry excels in. According to CAMIMEX, mining was the fifth-best paid profession in the country and was one of the sectors that attracted the most investment in 2016. As part of their CSR policies, many companies hire local people to be part of their mining projects, such as America’s Silver Corporation. At its project in Sinaloa, the company employed 350 people. “When including the supply chain and indirect employment, the community realizes how much of a benefit the mine provides,” stated Darren Blasutti, President and CEO of Americas Silver Corporation, a good reason for the next elected president to keep a closer eye on the Mexican mining industry.
IMPROVING MEXICO’S COMPETITIVITY
While Anaya and AMLO backed an increase in the minimum wage to fight inequality, Meade said that commerce and investment should be used to close gaps in the country. “Mexico has many gaps between north and south, men and women and those who have a lot and those who have nothing,” he said. “We need more investment in the south to promote productivity and close these gaps.”
Along with closing regional gaps, Anaya said the country needed to take better advantage of its national infrastructure plan to increase competitivity. The Mining Fund that was created in 2014 through the fiscal reforms could be an important factor in the development of infrastructure as one of its objectives is to support communities and towns surrounding mines, but many complain that the process is not transparent enough. “I think that about half the taxes collected from a particular operation are supposed to go back to the community for infrastructure,” stated David Wolfin, President and CEO of Avino Silver & Gold in an exclusive interview for Mexico Mining Review 2019. “There is a long list of needed infrastructure projects so there is no excuse why these funds are not there. Countries need infrastructure and infrastructure comes from mines.”
Considering that NAFTA renegotiations remain in the air, there are some concerns about the impact of the treaty on relationships between Mexico, the US and Canada – a major investor in Mexican mining. “Ease of doing business between Mexico and Canada may suffer and this will in turn impact the Mexican mining industry,” stated Mariano Calderón, Partner at Santamarina + Steta told Mexico Mining Review. During the debate, Meade said he was open to international commerce, but confirmed that under his presidency he would not allow agreements or treaties on any topic that is not based on respect, in reference to the US.
Making sure that the next administration stays open to investment in the country is a priority for the mining industry as international and national companies invest large amounts of capital to the development of projects. “Mining and foreign investment are important sources of revenue and jobs for the country, so it will be nice to see an administration that continues to foster policies which support these aspects of the economy,” said James Bannantine, President and CEO of Great Panther Silver in an interview for Mexico Mining Review 2019.
AND THE WINNER IS…
According to the Washington Post, “much of the debate was taken up with the candidates trading insults, calling each other hypocrites, liars and accusing each other of corruption and illicit wealth.” But the tactic proved to be positive for Ricardo Anaya, who was declared the night’s winner in a survey conducted by Massive Caller. The survey company interviewed 2,000 people over the phone and found that 57.3 believed that Anaya had won the debate with AMLO a close second place with 42.6 percent. However, another survey created by Numerus found José Antonio Meade to be the winner with 35 percent. Time will soon tell who the real winner of the 2018 presidential race is.