This week, Mexico Mining Review takes a look at the international champions that want to incorporate themselves into Mexico’s mining supply chain. We spoke to Nicholas Baker, Trade Commissioner of Mexico, Central America & The Caribbean of Austrade who explained what value Australian companies can add to the national industry.
Q: How can Mexico benefit from the similarities between Australia’s and Mexico’s mining industry?
A: Mexico has many similarities with Australia. Geologically they are both very resource-abundant and both share a long history in the mining industry. The difference is that Australia is a large country and the mines are normally located in isolated and remote areas. The necessity to fill in the gaps created by the lack of a workforce in these areas helped turn Australia into a hub for technology in mining. People do not want to live close to the mines as these are often thousands of kilometers away from the main cities. It can also make it really expensive to fix a broken-down machine when the nearest mechanic is far away. To fix the problem, mining companies created software that can predict the life cycle of a machine to help operators prepare better for breakdowns. Australian mines also use autonomous machines and vehicles that can be controlled from the capital city in that state.
We use these tools in Australia because the conditions are so tough. This kind of technology is still not a necessity in Mexico as mines are not as isolated. But there are many areas of opportunities to incorporate these solutions into the life cycle of operations in the country. We also seek to motivate Australian companies to invest in Mexico as there are probably only about a dozen mining companies who have invested in the country’s mining industry.
Australia also excels in establishing healthy relationships with surrounding communities. Companies know that they cannot just enter a country and announce that they will be opening a mine. A healthy relationship requires a clear plan and strategy for market entrance. It is all about working locally. We can also relate to the water management issues that the country faces as Australia is the driest continent in the world. Mining is a thirsty industry and requires a high consumption of this precious resource. We can help companies better recycle water and optimize its use.
Q: How would you describe the advantages Mexico has over other mining jurisdictions in Latin America?
A: Australian companies first entered Latin America through Chile. It became a hub for Australian companies in the region. Our goal is to continue motivating these companies to expand to Peru and Mexico. Colombia is also starting to attract the presence of a lot of Australian companies. Mexico has a unique position as it links North and South America. It has the advantage of encompassing geological diversity as Chile mines mostly copper and Colombia coal. Peru also has mines that are in remote areas in the Andes. It can make it expensive to open a mine in these areas. Access to mines in Mexico is much more developed in comparison. Mexico additionally has a booming oil and gas industry that Australia can work in parallel with. The country is opening opportunities for deepwater oil projects and Australia has expertise in deepwater. BHP Billiton has already signed a historic contract with PEMEX for the Trion farm-out. We are hoping that BHP will turn its attention to mining in Mexico as well. The country also has a great deal of talent, with more engineers per capita than many other countries.
This is an exclusive preview of the 2019 edition of Mexico Mining Review. If you want to get all the information, plus other relevant insights regarding this industry, pre-order your copy Mexico Mining Review or access our digital copy of the 2018 edition.