Mexico mine owners bypass 'middlemen'

Gold miners from Mexico have long relied on companies from Canada to excavate gold and export it to the UAE. Determined to set aside the 'middlemen', mine-owners have now approached gold companies directly and have found investors in the UAE, Emirates Business has learnt.

Sergio A de la Rocha, President, and Rosa de la Rocha, Director of the Durango Miners Association (DMA), recently toured the UAE offering majority holding of 51 per cent in such projects to investors. With 140 tonnes of gold imports, Dubai is the largest "reseller" of gold in the world.

"There are people interested (in investing in Mexican mines) in UAE and they are interested in a big project. We have about 20,000 hectares in a very important gold and silver area that can be used for the project," de la Rocha said.

"We want to set up an integrated system that will excavate and process gold. It can then be exported to the markets in Dubai," De la Rocha said.

She said that so far Canadian mining majors have benefitted from concessions granted to exporters. The DMA wants to avail those benefits now by becoming directly involved in projects with importers from the UAE.

Mexico is a large producer of gold and its reserves are expected to increase considering recent announcements by a few companies. Durango, located to the west of the country, has the third-largest gold reserves in Mexico. Most of the gold in the country is mined by Canada-based conglomerates that, from time to time, have announced increases in their reserves.

Capital Gold Corporation, a Canadian company, recently announced that its probable gold reserves increased nine per cent to 43.4 million ounces. Soho Resources, Gold Corp, Great Panther and Plata Panamericana are some of the many Canadian companies excavating gold in Mexico, De la Rocha said.

The DMA has more than 150 members in one of the most important gold-mining belts of the American continents. All the DMA members have been granted mining concessions by the government, the DMA claims. Durango miners claim that the region is substantially under-explored for investments.

"Our associations maintain a good relationship with the landowners, and therefore, we guarantee a project invested in can be calmly developed without local problems," the association said in its presentations made in the UAE.

Mexican gold could support Dubai's (and the UAE's) ambition of being the world's largest gold trading hub. Jeffrey Rhodes, Chief Executive of Dubai-based INTL Commodities, said Dubai is currently exports a quarter of the world's gold, a capacity the emirate wants to double. "The Mexican gold could be of benefit to the UAE's refiners," he said.

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