The Reputational Challenge of Canadian Mining Companies in Mexico

Of all industries, mining is probably the most misunderstood. Our lives depend on the availability of metals for a myriad of everyday uses. It is hard to find a "mineral teetotaler". But mining is questioned and attacked for its environmental impact and rejected by those who argue that it has negative impact on the communities where it is developed.

In Mexico, the government has attacked mining activity for various reasons: the granting of mining concessions under non-transparent circumstances, tax evasion and land speculation. For mines operated by Canadian companies, the attack can take on nationalist overtones: mining in the hands of foreigners. 

Mining is a central sector in the Mexico-Canada relationship and has been a conversation topic between President López Obrador and Prime Minister Trudeau. López Obrador has publicly criticized the case of a Canadian company that apparently does not correctly register the mineral extracted in order to avoid paying the right taxes. In turn, Trudeau has criticized the unfriendly treatment that his country's companies have received in Mexico. Nevertheless, Canada's investment in Mexican mines continues to grow, which today represents 35% of its total investment in Mexico. At the end of 2022, for example, Torex Gold announced an investment of 850 million dollars to develop three mines it has in operation in Guerrero.

Canadian mining companies in Mexico, as in other parts of the world, need to strengthen their reputation and highlight their environmental protection and social responsibility actions. 

To move forward on this path, four key elements must be addressed: 

1.- Approaching the government. When the authorities critic mining, the currents of public opinion it fuels are hard to reverse. The sequel is twofold: (a) it sends a very clear line of rejection to public officers who should supervise and encourage it, and (b) it opens a greater margin of maneuver to social groups and non-governmental organizations that have traditionally opposed its activity. That is why approaching the government and leaders who can serve as interlocutors is key for the industry to sensitize them about the mining-related actions and benefits. 

2.- Rely on research. To define a sound strategy, mining must conduct accurate research on where it stands: What builds a good reputation? Are its benefits recognized? What gives mining credibility among the population? What actions should it take and what tools can it use to involve society? In such a multi-trend, controversial environment, research into public attitudes would make it possible to chart a safe route to touch the right sensitivities in the relevant people.

3.- Respond to critical issues. Many of the issues that create conflict in the mining sector are related to six essential aspects: (a) water use, (b) land tenure, (c) social benefits, (d) forms of community participation, (e) concepts of community development, and, (f) respect for the customs and traditions of the area in which they operate. The quality of the policies and initiatives that Canadian mining companies design to address these aspects are critical to seamlessly run mining businesses..

4.- Communication. Perceptions about mining are closely linked to the type of information received by stakeholders. Improving the quantity and quality of communication from mining companies is crucial to correct outdated images of the industry.

If mining wants to strengthen its reputation to increase its social support, it needs to highlight the socio-economic benefits it generates, the actions it implements to reduce the impact of its activity, the collaboration with authorities and specialists it develops in rapport with regulatory and sustainability schemes, and mining’s social programs and success stories. 

Everyone in Mexico and the world needs sustainable mining, because many industries have no substitutes for their processes. It is important to acknowledge that mining is an essential activity and that for many remote populations mining is the only development option. The key is for the social impact actions and benefits of mining to be more widely known and supported by society and making room for cooperation to reduce mining impact on the environment and the communities where it is run.