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Mining in Mexico
3/7/12 Mexico Mining Seminar at PDAC 2012 1
PDAC
Toronto; March 2012
E. Luna
3/7/12 Mexico Mining Seminar at PDAC 2012 2
Mining in Mexico Access to land
• “Ownership” not really the issue
• Three types of ownership • Private property
• It can, and should be, bought • Ejidos
• Only individual parcels can be bought • Temporary Occupation agreements are widely used
• Agrarian Communities • Hardest to negotiate
• Get a local (firm or person) to negotiate • Language barrier • Different culture • Lack of knowledge of legal provisions
• Cost of gaining access has increased • Be prepared to pay top peso
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Mining in Mexico Royalties-1
The Economist, Leaders, February 11, 2012
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Mining in Mexico Royalties-2
• It has happened in other countries • Caused by high prices and economic crises • Can not be a special tax (unconstitutional) • In principle, we are opposed to it • Thinking creatively
• Design it as an additional levy on concessions • Use it as a credit to VAT and/or other taxes • Triggered by a minimum price • Apply proceedings directly to Municipalities • Has to have built-in accountability
• Work with Congressmen is being done
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Unions • Having a union is not unavoidable but it is difficult to escape from it
• Three different national Unions • National leadership weak in every case
• One located in Fresnillo • One located in Monterrey • One located in Mexico City-Vancouver
• Relations with Locals should be close and respectful • They should decide
• Due to current prices, great expectations about salaries and bonuses • Tug-of-war between local and corporate management • Agree on a collective contract that is:
• Simple • Understandable • With very few different jobs
Mining in Mexico
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Health and Safety
• Hindrances • Machismo • Low formal education • Lack of training • Health related
• Drug abuse • Physical conditions
• Assistances • Use of families • Should be written within the Collective Contract • Training • Start with staff: Word convinces but example drags
Mining in Mexico
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Community Relations
• Strongly intertwined with Access to Land • Patronizing and Paternalism shouldn’t be applied • Make communities part of the project
• Mess halls • Garbage collection • Some freights • General housekeeping • Shops
• Sewing -coveralls, vests, etc. • Poultry farms • Bakeries
• Set up a team of NATIONALS to handle this matter • Foster education, formal and informal • Promote the incorporation of a Community Development Committee.
• Town people • Company • Local governments
Mining in Mexico
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Operations
• It is best to develop or choose a local team of operators • The only long term solution
• Convenient to support Mexican Earth Sciences Schools • Students • Teachers • Using market oriented provisions
• Reinforce training and development
Mining in Mexico
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Mining and environmental regulations
• Participation in the writing of regulations is necessary
• Mexican Chamber of Mines • State and Federal Congressmen • State Governors
• Support for adequate application and interpretation
• Mexican Chamber of Mines • Mining Task Force of Can Cham
• Have lawyers and advisors with the right Rolodex
Mining in Mexico
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Mexico Economic Outlook
• Mexican-and Canadian-economy tangled with US economy • Outlook is fair • Government (and citizens!) has to bring about several changes
• Privileges have to diminish • Unions • Government monopolies • Big business
• States have to be financially independent • With accountability
• As the economy improves, there’ll be better: • Security • Labor pool
• Canadian miners in Mexico have helped in curtailing duopoly
Mining in Mexico