November 26, 2011 Mining for the Future

Volume 14 | Issue 3

Since it began operations in 1887, Industrias Peñoles has played a leading role in Mexico for its mining, metallurgical & chemical operation

With more than a century of experience in the mining industry, Industria Peñoles, S.A.B. de C.V. is no stranger when it comes to working with natural resources. Today the mining group is the largest producer of refined silver and metallic bismuth in the world. It is also the leader in Latin America in the production of gold and lead, and is one of the leading producers in the world for zinc and sulfuric acid.

In addition to these activities, the company has a long history of caring for natural resources and giving back to both the environment and society, notes Leopoldo López Rodríguez, spokesperson for the company. “Peñoles has focused on the environment since 1972, when it created the first water treatment plant in Mexico,” he explains.

Today Peñoles has a vast portfolio of projects that focus on helping out communities in areas where the company has ongoing operations. “After 124 years of existence, we believe that a lasting company needs to have a strong commitment to three things: society, the environment, and economic growth,” says López.

VAST OPERATIONS
Peñoles first began operations as a mining company in 1887 in the city of Durango, Mexico. During its years of existence, the company branched into various parts of Mexico and other countries. Today Peñoles has ongoing operations in nine different states within Mexico, as well as projects in other countries such as Peru. It belongs to a group called Grupo BAL, a private investing organization that consists of a number of independent Mexican companies.

For its mining operations, Peñoles has a copper mine in the northern state of Sonora. In the state of Chihuahua, the company has a zinc mine, as well as a mine for lead. In the central state of Zacatecas, Peñoles operates a poly-metallic mine and the largest zinc mine in the country. In the state of Mexico, the company has a poly-metallic mine that mainly deals with zinc.

In the metallurgical sector of the company, Peñoles has three bases of operations in the states of Durango and Coahuila. In Met-Mex Peñoles, located in Torreón, Coahuila, the company operates a metallurgical complex and produces refined silver, metallic bismuth, refined gold, zinc, lead, sulfuric acid and sulfur dioxide.

In its chemical division, Peñoles has five plants spread throughout the states of Coahuila and San Luis Potosi. One of these, known as Magnelec, is the largest producer of sodium sulfate in the Western hemisphere. It also produces magnesium compounds.

The company has ongoing exploration efforts throughout the country. It has an exploration project for copper in the state of Sonora. In Guerrero and Durango, Peñoles oversees exploration projects for zinc. In addition to these, it has a project in Racaycocha, Peru.

The company currently employs 14,541 workers. Corporate offices for Peñoles are located in Mexico City and Torreón, Coahuila.

SUSTAINABLE GROWTH
Perhaps more impressive than Peñoles’ extensive list of ongoing operations is its strong involvement in projects based on social responsibility. In 2010, the company invested 351.7 million pesos ($284.4 million USD) in the areas of the environment and community development. For its efforts in being a socially responsible company, Peñoles focuses on five main areas: the environment, education, family health and wellbeing, development of autonomous productive activities, and social infrastructure.

In the area of the environment, López notes that the company participates in both reforestation and forestation efforts. “We have areas where we operate mines that need to be replanted, and we also have greenhouses where we start new plants to help the environment.”

The company’s greenhouse efforts paid off in early 2011, when a harsh freeze struck the northern part of Mexico, killing 80 percent of the trees in the urban zones. “We donated 20,000 trees to help replenish the affected areas,” says López.

Peñoles also has a strong focus on renewable energy resources. “By 2012, we set a goal to have 20 percent of our energy sources come from renewable resources,” López explains. The company has already delved into projects dealing with solar and water vapor energy.

In the education department, one of the company’s recent projects includes the opening of a metal museum in Torreón, Coahuila. “We chose Torreón because it is the world capital of refined silver,” notes López. The museum is open to the public and is free of charge. Each year, approximately 35,000 visitors, mostly from schools, pass through its doors. Students learn of the sciences involved with metal. They also see how minerals are involved in supply chains, and the importance of caring for natural resources and the environment.

In all of the areas where Peñoles has operations, the company set up a program called “Life Skills.” This program, which started five years ago, offers tools to assist personal development and strengthen family ties.

Peñoles also promotes economic development in the communities where it has a presence. In 2010, the company offered a total of 1,250 courses for citizens, ranging from painting and ceramic classes to cooking and beauty courses. “We don’t offer these as a casual activity,” says López. “We want to reinforce the arts, and also to help create and preserve new areas of employment.” In many cases, after participating in the courses, citizens are able to take ideas and lessons learned and apply them to their own business efforts.

Last year, Peñoles participated in a group that helped create or assist a total of 151 businesses. Of these, 92 were new companies. “These projects offer productive avenues for the community,” says López. “We saw companies develop that produce dolls, serve food, offer carpentry services, and car repair, to name a few. This diverse group of small businesses helps generate employment, and this allows us build up strong capacities in the communities we work in.”

A THRIVING FUTURE
Due to the type of operations it carries out, Peñoles often takes on unique roles in the areas where it has a presence. “Peñoles goes to areas where minerals with valuable metallic components can be found, but that often means mountainous areas or places in the middle of the desert,” says López. These locations are often deserted and isolated; yet communities spring up as workers arrive in search of employment. “This means that Peñoles often takes on an administrative role: it sets up housing units, and builds water treatment and energy plants.”

Since mines have a determined life cycle, the company devotes great efforts to ensure that communities can continue to thrive – even when the natural resources are no longer supplying jobs. “We’re contributing to communities to help them become self-sufficient,” says López. “We want to use our relationship with them to help them be independent.”

The company’s efforts in the area of social responsibility are key factors toward achieving this goal. “We want to share what we’ve learned with others,” concludes López. “We are convinced that we need to be a company that incorporates its duties to the environment as part of its culture, and that being committed to social development doesn’t just make a good business, it makes a good way of life.”

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