A collection of the Board of Directors meetings for the Utah Construction Company. The minutes cover 1900-1952 with the year of 1909 missing. The meetings covered jobs the company was bidding on, financial outlook of the company, and the daily business of the company. ; Microfilm
A collection of the Board of Directors meetings for the Utah Construction Company. The minutes cover 1900-1952 with the year of 1909 missing. The meetings covered jobs the company was bidding on, financial outlook of the company, and the daily business of the company. ; Microfilm
A collection of the Board of Directors meetings for the Utah Construction Company. The minutes cover 1900-1952 with the year of 1909 missing. The meetings covered jobs the company was bidding on, financial outlook of the company, and the daily business of the company. ; Microfilm
A collection of the Board of Directors meetings for the Utah Construction Company. The minutes cover 1900-1952 with the year of 1909 missing. The meetings covered jobs the company was bidding on, financial outlook of the company, and the daily business of the company. ; Microfilm
A collection of the Board of Directors meetings for the Utah Construction Company. The minutes cover 1900-1952 with the year of 1909 missing. The meetings covered jobs the company was bidding on, financial outlook of the company, and the daily business of the company. ; Microfilm
A collection of the Board of Directors meetings for the Utah Construction Company. The minutes cover 1900-1952 with the year of 1909 missing. The meetings covered jobs the company was bidding on, financial outlook of the company, and the daily business of the company. ; Microfilm
In 1928, Utah Construction Company completed its first project outside of the United States with the 110 mile railroad for Southern Pacific of Mexico. Over the next 30 years, UCC continued to work on projects in Mexico including dams, roads, mining, and canals. The collection contains several booklets and correspondence along with approximately 500 photographs. ; 8.5 x 11 in. paper ; ENGLISH TRANSLATION OF ING. LUIS DE LA PEA PORTH'S SPEECH INAUGURA-TING THE NINTH NATIONAL CONVENTION OF THE ASSOCIATION OF MINING, ME-TALLURGICAL AND GEOLOGICAL ENGINEERS OF MEXICO. Preamble by the Press, as published in the Hermosillo Daily ""Imparcial"" De la Pea Porth Demands Unity of Endeavor and Unity of Resources for Mexican Mining. Taking the speaker's stand to expound his concept of the general pa-norama of mining in Mexico, the Deputy-Minister of ""Recursos Natura-les No Renovables', Luis de la Pea Porth, delivered a vibrant mes-sage to more than 1,600 delegates of different entities of Mexico, to whom he delineated the Mining Policy of the present Administration. The official from the Federal Government, demanded the participation of all parties in the difficult task of the resurgance of the mining-metallurgical industry of Mexico and cited concepts of great signifi-cance which are presented during his speech which is published com-pletely as follows: VERBAL TEXT OF ING. LUIS DE LA PEA PORTH'S INAUGURAL ADDRESS TO THE NINTH NATIONAL CONVENTION OF THE ""ASOCIACION DE INGENIEROS DE MINAS, METALURGISTAS Y-GEOLOGOS DE MEXICO"" October 25, 1971 - Hermosillo, Sonora Mr. Governor of the State of Sonora; Mr. President of the Board of Directors of the National Association of Mining, Metallurgical and Geological Engineers of Mexico; Honorable Members of the Presidium; Ladies and gentlemen. It is a great honor for me and one of the greatest satisfactions of my professional life to be present in this ceremony with the most ho-norable representation of Mr. Lic. Luis Echeverra, Constitutional President of the Mexican United States, as well as to transmit to you, on his behalf, a warm greeting and his best wishes for the suc- cess of this Ninth National Convention. Considering the foregoing and knowing that the Asociacin de Ingenie-ros de Minas, Metalurgistas y Gelogos de Mxico, to which I'm proud to belong, includes the majority of Mexican mining technicians and that one of their main objectives is to collaborate with the Govern-ment in the development of the mining activities of the country, I feel it is very appropriate to take advantage of this opportunity to present to you some of the main components of the present mining policy of the Mexican Government. An adequate mining policy, aside from purely technical and economic factors, must consider, very specially, social, cultural, political factors and in some cases aspects of national sovereignity. It is not acceptable, under any circumstance, to believe the thesis that the exploitation of mineral resources with which the Country has been endowed should be developed with exclusively economic objectives, no - 2 - matter how justifiable and apparently favorable they may be. It is indispensable, in our opinion, that this exploitation be developed in such a way that a maximum contribution be made toward the achieve- ment of the highest national objectives. Undoubtedly, one of the fundamental aspects of the mining policy of the Mexican Government during the last years, has been the so-called ""mexicanization of mining"". This process, consisting in the majority participation in Mexican mining enterprises by Mexican capital, be it state or private, is backed in the precepts of Article 27 of the 1917 Constitution, which clearly states that the exploitation and use of the mineral resources will only be able to be developed in the Coun-try, under the protection of concessions given by the Mexican state and that these concessions will be given only to Mexican citizens or Mexican enterprises. I consider it very important to clarify that ""mexicanization"" is not equivalent to nationalization, nor does it constitute in itself, a first step in this direction. On the contrary, we understand mexica-nization to be an alternative between a mining industry in Mexico controlled by foreign interests, separated from the economic life of the country, and a nationalized mining industry, separated from its natural markets and from its most accessible sources of capital and tecnology. Considered in this manner, mexicanization of mining may not be a so-lution thoretically ideal for the difficult dilemma with which we are faced, but we sincerely believe that, within the general frame-work of realities of our national circumstances, as well as interna-tional, it is the best practical solution that, at the moment, we can find for this dilemma. The basic objectives of mexicanization are: a) To ensure that the private interests of mining enterprises be kept, in all cases, subordinate to national interests; b) To achieve a true integration of mining activities with the e-conomic life of the country, and c) To avoid, as much as possible, and without resort to coercive measures, the exit of economic resources from the country, ge-nerated by the exploitation of our mineral resources. It is undoubtable that in the first stages of the mexicanization of mining enterprises that were already in operation, this process, which the President of the Republic himself has claimed a ""national conquest of great importance"", has been successful. Nevertheless, it is necessary to recognize also that, unfortunately, there still exist doubtful ""mexicanizations"" that only obey the let-ter of the Law but not its spirit. Also, facts and negative tenden-cies in mining are occuring which require corrective measures which will perfect and make more real and effective the mexicanization of mining. Among the negative aspects of the present disposition of Mexican mi-ning, we are particularly concerned about the following: 3 a) The insufficient investments presently being made both by the State as well as by private enterprise, in mining exploration and in the development of new mining ventures. b) The weakness of the small and medium mining entities, and the dan-gerous concentration of the national mining production by a small number of large companies. c) The vulnerability of the Mexican mining industry to international prices, to the extent that when prices are unfavorable they not only affect present production, but they have a large impact on future production and impede taking adequate advantage of periods of good prices. d) The abuse in the incorporation of enterprises that, with purely promotional or speculative ends, obtain mineral concessions over large surfaces of land. e) The existance of many inactive mining properties or on which only the minimum legal work is carried out, even though some of them are located in zones with no other natural resources, and in which. zones mining is vital for employment. f) The disequilibrium which exists between the degree of mexicaniza-tion achieved in the productive phase of mining and the scarse progress obtained in other phases, such as the commercial (market- ing) phase and with reference to the utilization of mineral pro-duction, and g) Finally, the precarious situation due to international factors be-yond our control, which affect mining in general, and which ef-fects we are just beginning to feel. The first phase of mexicanization, namely the mexicanization of enter-prises that were already in operation, was almost completed with the mexicanization of Cananea, which event was announced by the President of the Republic on August 27 of this year. With pride we can state that at the present, more than 98% of mining production in Mexico is generated by enterprises in which the majority of share capital is Mexican. Nevertheless, it is appropriate to note that the foregoing fact also implies a great challenge for the future. In other words, we can say that the simple phase, relatively certain and inexpensive to attain, of buying operating enterprises, has ended, and we now enter a much more difficult and expensive stage; namely, to create and organize new enterprises and new mining/metallurgical ventures. This is a phase that requires great technical and administrative know-how and in which there is no room for improvisations or lack of preparation. With reference to mining, the Mexican Government considers that the small, medium, and large enterprises are the parties who are responsa-ble for the principal tasks and work involved, but the Government is also conscious that its promoting function must be intensified by means of its direct participation in enterprises dedicated to the ex-ploration, exploitation, and refining of minerals, as well as to the transformation and marketing of mineral products. It is undoubtable. -4- in our opinion, that the association of the State with private enter-prise has already demonstrated to be a positive factor in the develop-ment of the Mexican mining industry, and that it can be much more so in the future. Another very important aspect of the mining policy of the Government is that which consists in achieving the maximum transformation or in-dustrialization economically possible of the mining products of the country. We consider that, except for some cases in which special circumstances have resulted in unfortunate and prejudicial consequen-ces, Mexico has had considerable success in its objective of reducing the exportation of its raw minerals or concentrates with a low degree of refining. To conciliate and stimulate, as much as possible, the development and the modernization of foundries, refineries and metal industries in Me-xico, is (and we are sure that it will continue to be) a fundamental tenet of the mining policy of the Mexican Government. Another of the basic aspects of the Mexican mining policy is the de-cisive support and encouragement of the existence and development of the small and medium mining enterprise, which has been emphatically ratified on numerous occasions by the President of the Republic him-self. ""We conceive the development of mining in Mexico"", the Presi-dent has said, ""basing it not only on large enterprises, but especially on thousands and thousands of small and medium size mining enterprises and producers"". In addition to the aspects of a social nature, which in themselves would suffice to justify this policy, we consider that there exist also in this respect solid justifications both technical and economic. The particular characteristics which are found in many of our mineral deposits; the low unit value of some of these minerals or great varia-tions in their prices, make their exploitation marginally attractive, or frankly uneconomic for large enterprises. We believe that Mexico, under no circumstances, can afford to waste or ""freeze"" for an indefi-nite period of time, resources that, even without large profits, can be exploited which permit the generation of productive employment to our fellow citizens. Whichever the state of development of a country, it is undoubtable, that one of its most important resources is constituted by the existence and availability of technical and administrative personnel well trained Therefore, another of the important aspects of the Mexican mining policy is to achieve the objective that in these activities, the services of Mexican personnel be used and developed at maximum levels in all fields of mining. Adapting to our case an old Chinese proverb, we could affirm that if we want to have mining for a few years, mexicanization of these mining enterprises actually existent is sufficient, but if we wish to achieve the development of a prosperous mining industry of unlimited duration, we will have to be able, with our own technical and administrative skills to discover new mineral deposits, to develop those which are being discovered, and to create and organize new enterprises and enti-ties to exploit them, new industries that use the minerals that are thusly obtained, and to establish marketing enterprises able to -5- place our mineral products In international markets. During the last few years, and as a result of the combined work of the Government, the Universities, and mining enterprises, the number of students that have enrolled and graduated in the field of Mining Engineering, Metallurgy and Geology in Mexico, has increased notably. It would be sad indeed if, due to conditions, which are undoubtedly of a transitory nature, the Mexican mining industry did not take advantage of the work developed to date and left without employment some of the technicians who egress from our universities. I consider it my duty to specifically mention this, problem, which may become a serious situa-tion next year and for the adequate solution of which I consider indis-pensable, the cooperation and good-will of all mining enterprises working in Mexico, and which will require the decisive intervention of the Asociacin de Ingenieros de Minas, Metalurgistas y Gelogos de Mxico. Another of the basic functions of the Mexican Government with regard to mining, is the colaboration and the publication of basic information such as topographic and geologic maps, statistics, economic studies, etc., and that, within these efforts, attention should be given to the study and the evaluation, not only of large mineral deposits, ame-nable to exploitation on a large scale, but also, particularly to the very numerous small deposits that, within our special circumstances, can give employment and economic independence to many Mexican citizens. Mexico should not, and must not, continue to be a country of great eco-nomic contrasts. The adequate distribution of wealth implies as a first step, a more homogeneous development of the different regions of the Country. Mining, one of whose special characteristics is that it cannot choose its location, as this is predetermined by the loca- tion of mineral deposits, can be an important factor in the develop-ment of zones which do not contain other resources; a great help to di-minish economic regional differences, which in some cases are so drastic and so unjust, similar to economic differences between the di-verse sectors of the population. Due to their nature, minerals are non-renewable resources; in other words, they tend to necessarily diminish. In some cases, and above all, when the mine exploiter lacks the necessary social conscience, and does nothing to aleviate and facilitate the transition when mi-neral reserves are exhausted, serious social problems develop that re-quire solutions, even though they may only be temporary solutions, based on operations subsidized by the State. These operations cause the inefficient use of available capital resources, employment and technology, without, in most cases, adequate solutions being found to the problem. It is also undoubtable that the safety in the workings of the mines and the metallurgic instalations are an important part of our mining policy. The life and health of our miners are factors to which top priority must be given. Honorable Mining Engineers, Metallurgists and Geologists of Mexico: When the directors of the Association invited the President of the -6- Republic to attend the Inauguration of your Ninth Convention, Lic. Echeverra emphasized that economic development always implies the combination of natural resources and human resources and that with regard to raining, Mexico is willing to continue making large invest-ments of patience and money to consolidate and perfect the mexicani-zation of mining in Mexico. It is certain that the ideas that I have taken the liberty to explain regarding the mining policy of the Mexican Government do not include all the various important aspects that one might consider within the scope of this topic. Nevertheless, gentlemen, the dialogue has been initiated on the highest level and it only remains for me to request that you continue it, always having as the fundamental objective, the benefit and the progress of our Country and of our profession. Thank you very much. Ing. Luis de la Pea Porth October 25, 1971 Translation FMGS/ebh
In 1928, Utah Construction Company completed its first project outside of the United States with the 110 mile railroad for Southern Pacific of Mexico. Over the next 30 years, UCC continued to work on projects in Mexico including dams, roads, mining, and canals. The collection contains several booklets and correspondence along with approximately 500 photographs. ; 8.5 x 11 in. paper ; 96) Return to Harry McNev Mexico- Copper & Exploration ABSTRACT CONDITIONS THAT AFFECT MINING EXPLORATION AND MINING PRODUCTION IN MEXICO Private mining industry is experiencing difficult times in many countries that are or have been large mineral producers. Would Mexico offer opportunities for exploration and production? Mexico is a mineral rich country. For the exploration en-gineer this is the most vital point. If the exploration groups are professionally adept, they will find mineralization. A broad review of metallogenetic provinces and of past and present production in Mexico can be used as a guide to explora-tion. Although Mexico is well endowed with minerals, there are many factors that must be considered before a determination can be made that the mineral discovered is ore; (a) restrictive factors in-cluca governmental policy such as taxes, Mexicanization, commodity prices and certain laws; (b) favorable factors include a stable government, strong and freely-convertible peso, and relatively low direct-production costs. -The Mexican mining industry offers an opportunity to those willing to study the problems, accept the law, and invest in the social -as well as financial- future of Mexico. CONDITIONS THAT AffECT MINING EXPLORATION AND MINING PRODUCTION IN MEXICO I. INTRODUCTION. The potential foreign investor in Mexico's Mining In-dustry must carefully consider many facets of the industry and of the country. On the positive side, a stable govern-ment, a healthy monetary position and. above all, a mineral-iy rich country can be found. However, no investments should be made until the potential investor has investigated the min-ing law with its Mexicanization requirements, the mining taxes, the technical manpower regulations and the power of the ex-ecutive branch to set commodity prices. The official mining policy during the period 1930 to 1954, did not encourage investments in the mining industry. However, the future looks much brighter, for now Mexicanization has been accomplished for over 90% of the industry and the gov-ernment realizes that mine products provide a base for Mexico's currency and bring in foreign exchange, that mining provides an important source of government revenue and is an important con-sumer of power, supplies, and transportation services. Also, and of great future importance, Mexico's expanding industry will be in need of more raw materials to supply its demand and its increasing export of manufactured goods. II. HISTORY. The Spanish conquistadores were obsessed by the riches found in Mexico - particularly gold and silver. Thus began the systematic plundering of the new colony and the beginning of mining as the basis of Mexico's economy, Mexico became known as the ""mine and mint of Spain"". Major mining districts such as Taxco, Zacatecas, Santa Brbara and Guanajuato were discovered and brought into pro-duction between 1520 and 1550. It is interesting to note that these selected districts are ail still in production. From 1810, which saw the start, of independence from Spain to 1910 when the Mexican Revolution broke out, mining continued to play a leading role in the national economy. It probably would be fair to say that it sustained the economy. From 1875 to 1900, for example, mining accounted for 70% of the value of Mexico's exports. During the period of the 1910-1917 Revolution mineral pro-duction sharply declined. Silver, lead, and zinc, however, hit their peaks in the late 1920's nut then the general depression followed by governmental restrictions and high taxes reduced exploration which then was followed by reduced production and to date the peaks of production of the late 1920's have not been reached. Under the progressive regime of President Diaz Ordaz, which started in 1964, governmental stimulation to the mining industry has led to greater exploration which is now showing up in increased production. Today Mexico ranks as the leading producer of silver and is the fourth largest producer of lead, fifth of zinc and fourteenth of copper. Mexico also produces major amounts of mercury, bismuth, sulphur, antimony and is the leading producer of fluorite. The entire mineral industry accounts for over 20 percent of the country's foreign exchange earnings although this amounts to less than 2% of the Gross National Product. III. CONDITIONS IN THE MINING INDUSTRY OF MEXICO THAT AFFECT IN-VESTMENT. A. Mexicanization. The term Mexicanization has often been misinterpreted as nationalization. Mexicanization only implies the control of a company in Mexican hands. The transfer of control from foreign to Mexican hands proceeds on a private level by negotiations between local and foreign businessman. Although foreign capital is welcomed, the investor should not expect more favorable treatment than that accorded domestic investors. In Mexicanization it is implicit that as a country progres-ses and matures it must create a body of national capital. For if the profit earned leaves the country (although it created jobs, paid taxes, etc.) the servicing of loans and repatriation of capital would likely endanger the balance of payments leading to an unsound economy. Instead, by retaining within the country at least 51% of the profit, a national capital can be created which is so necessary for further economic expansion and industrialization. - 3 - In 1961 a mining law was passed providing that new mining concessions can be granted only to Mexican nationals, and companies in which a minimum of 51 percent of their capital stock (or 66 per-cent in some instances) is owned by Mexican nationals. This same law, however, granted tax privileges to Mexicanized companies. B. Immigration Restrictions. To protect their skilled and unskilled labor, the Mexican Government has regulated the immigration of foreign technicians in-to Mexico. However, if for the good of the country it is felt that a foreign expert is vitally needed, he can be permitted to enter generally with the stipulation that he train his replacement. Mexican universities are training mining engineers, metal lurgists and geologists but their training is principally academic and an industrial training period is necessary to make these en-gineers capable of filling normal production positions, C. The mining law of Mexico was completely redrafted in 1961, This is an extensive law and only a few of the points will be discussed, 1. Only Mexicans or Mexicanized companies have the right to obtain concessions. 2. A concession shall have a maximum surface area of 500 hectares l hr = 10,000 sq. meters). The sides of the con-cession are limited by vertical planes, 3. The total maximum concession area for a company or an individual is limited depending on the substance. However, three times this maximum can be held for a five-year exploration period. As an example for gold, silver, copper, lead and zinc, a maximum of 9000 hectares can be held for the first five years. After this five year period, a maximum of only 3000 hectares can be held. 4. Mining concessions are issued for 25 years but may be extended on proof of effective exploitation. 5. Assessment work is required. D. Taxes. Taxes paid by mining companies include: 4 1. Income Tax. This tax is modarate and has a maximum of 42%. 2. Production and Export Tax. These taxes are based on price set monthly by the Treasury Department. This official value is arbitrary and can change but generally reflects world prices. These taxes are levied whether the Company is making an operating profit or not. 3. Surface Tax. This tax is a rental on mineral concession of $1.20 dollars per hectare per year. 4. Capital Gains. Capital gains are included in gross income but at a reduced percentage depending on the length of time that assets have been held. 5. Depletion. There is no deduction allowed for depletion. 6. Amortization and Depreciation. It can be stated that deductions allowed are those that the tax authorities regard as normal and necessary for conduct of business. 7. Reduction in Taxes for New Mines. A directive calls for a five year reduction of up to 40% income tax and up to 100% of the federal portion of the production and export taxes, and accelerated depreciation and amortization for certain investment in new operations. 8. Other Taxes. Other taxes such as social security payments and distribution of a portion of annual profits to employees are required. E. Metal Prices. Metal prices for sale in Mexico are set by a govern- - 5 - merit agency. These prices are lower than world prices and act to subsidize Mexico's metal-using industries at the expense of the mining industry. F. Favorable Conditions. 1. Stable Government. The Mexican Government is stable and this stability will be entrenched each passing year with the development of a larger middle class and the strong emphasis on education. 2. Financial Stability. Exchange restrictions have never been imposed and funds are freely convertible and transferable to and from Mexico. The exchange rate has remained at 12.50 pesos per U.S. dollar since 1954. An exchange stabilisation agreement exists between Mexico and the International Monetary Fund which permits Mexico to draw on foreign currencies to maintain the parity of the peso. However, Mexico has maintained a favorable balance of payments for numerous years. 3. Low cost labor. Although there is a notable lack of qualified mining and exploration personnel of the highly technical and supervisory calibre, there is plentiful mining labor in the mining regions. In general, the mining labor is efficient and the costs are reason-able. Recent wage raises have been higher than increased productivity and management must work for higher productivity. In recent years strikes of over 15 days duration have been exceptional and peaceful labor relations are the rule. 4. High mineral potential. We can start with the premise that Mexico is a country extremely well endowed with minerals and many ore bodies await to be discovered. The fact that there has not been more than possibly three major metallic mineral discoveries in the last two decades is not that the bodies do not exist but that fiscal conditions have been such that no search has been made - 6 - for them. Now methods and philosophies of exploration have not been tried until very recently but in them lies the great ex-ploration potential of Mexico. There are three general geologic zones in Mexico. The nor-thern zone is separated from the southern zone by the volcanic-rift belt which runs east-west through Mexico City and Guadalaja-ra and has as its most obvious surface feature a belt of Cenozoic volcanics. Most of the mining in Mexico has taken place in the northern zone in which the more acidic intrusive rocks are found. The southern zone contains more basic rocks, and although there are numerous mineral occurrences, the mines are small in size and number. The scarcity of mines in this zone is undoubt-edly due, in great part, to the lack of exploration which is made difficult due to lack of roads and facilities and to the heavy vegetation covering the outcrops. The volcanic-rift belt exhibits difficult exploration con-ditions; the principal ones being the great amount of volcanic cover and the intense faulting. As in the southern zone this area has not received intensive exploration; however, the famous silver deposits of Pachuca, Taxco, El Oro and Guanajuato lie within this region or at its edge. In the northern zone a long, large northwest trending belt of middle Cenozoic volcanics is found, which constitutes the Sierra Madre Occidental. Pew large mines are known within this belt of very thick volcanics; but where the rocks below the volcanics have been exposed, they are abnormally well mineralized. Therefore, here again the scarcity of mines is due to lack of out-crops. In order to investigate the exploration possibilities in greater detail, let us evaluate the situation of various metals. a. Silver. Mexico is and has been for many years (except 1968) the world's leading producer of silver. In the past a majority of the silver came from such bonanza camps as Pachuca, Guanajuato and Tax co where the silver was found in very high-grade deposits with very minor amounts of other metals. Today. most of Mexico's silver is produced as an accessory mineral in the lead and zinc deposits. This means that with lower lead and zinc prices there has been a reduction in the production of silver although silver prices have advanced. Although the bonanza camps have been reported as ""worked out"", there are definite signs that this may not be the case. Recant high-grade discoveries in Guanajuato and Taxco indicate that if modern techniques and vigorous exploration are carried out, it is quite possible that bonanza deposits will be discovered. Silver is well distributed in many parts of Mexico and it would be difficult to pin-point exact locations favorable for exploration. Slide No.2 shows in general the major distribution of silver. Since the environments vary widely, so also would the exploration techniques. In parts of Mexico numerous silver deposits have been known but left unexploited due to lack of roads and facilities. Large, low-grade deposits probably exist but as yet company philosophies have not been such that they would explore for this type of deposit. b. Copper. Copper, like silver, appears to have a future at favor-able prices. Added to this is the great increase in demand for copper by Mexico to satisfy its rapidly expanding industry. Until this year (1970), there has been only one copper mine in Mexico that could be considered major; the Cananea mine which produces approximately 70% of Mexico's copper. The Santa Rosalia mine in Baja California could be considered a medium sized mine and the rest of the present copper production comes from very small mines or as a minor mineral from other base metal mines. Because of this limited production, Mexico is presently producing just enough copper to supply its internal demand. This picture, however, is changing rapidly. In early 1971, Asarco Mexicana, S.A. will bring into production their Inguarn mine, in the State of Michoacn, which will have a mill capacity of 2000 metric tons per day of 1.8% copper which will more than take care of Mexico's immediate industrial demands for copper. Then in the future lies the immense deposit, La Ca-ridad, of Mexicana de Cobre, which has reserves in excess of 600 million metric tons of 0.75% copper with values in molybdenum. The exact size of this deposit is as yet unknown. Work is now underway to bring this deposit into production in 1974. -8- The reason for not producing more copper in Mexico has been the lack of exploration incentive by the mining companies. The small prospector is not equipped to explore for bulk, low-grade copper deposits and only in the last year or so have major companies made an exerted effort in this field. A very favorable copper mineral province exists in the State of Sonora, Perhaps the most important structural characteristic of this area is its location (Slide #3) along the north-trending Wasatch-Jerome crustal lineament at or near its intersection with the northwest-trending Texas lineament. Correlation between these lineaments and the distribution of the bulk low-grade deposits has been remarkable. Mexico's largest copper producer at Cananea and the previously mentioned La Caridad deposit lie along the Wasatch-Jerome near the intersection with the Texas lineament. Although northern Sonora is a most favorable area in which to explore for copper, this area should not be considered as the only target area since favorable areas exist in other parts of Mexico. Molybdenum can often be expected as an accessory metal with the copper mineralization. If unfavorable conditions for mining investment in Zambia, Peru and Chile -all major copper producing countries- continue or worsen, Mexico will become a major exporter of copper within the next ten years. Even if conditions become better in those countries, Mexico will still play a major role as a copper producing country. c. Lead and Zinc. Although the long term picture for lead and zinc, with silver as an accessory metal, may not be as bright as for copper, established smelter capacity and both local and foreign markets exist and, therefore, exploration for lead and zinc can be con-sidered by both large and small companies. For many years there has been little exploration for new lead and zinc deposits and there has been no exploration with the use of modern tools for locating unexposed bodies. The greatest exploration provinces for lead and zinc are shown on Slide #5. In these areas substantial silver values associated with the lead and zinc could be expected. - 9 d. Other Metals and Minerals. Mexico is a major producer of fluorite, barite, mercury, tungsten and antimony. Exploration will continue for these ma-terials depending primarily on world prices. i IV. SUMMARY OF CONDITIONS. Prom the foregoing, we can quickly summarize the conditions that exist in Mexico that directly affect investment in the mining industry. A. Regulatory. 1. Mexicanization. The requirement of majority investment by Mexican nationals by itself is certainly not unfavorable; however, risk capital is difficult to find. 2. Immigration Restrictions. It is often difficult to obtain highly technical personnel and companies are limited to the number of foreign personnel they can hire. 3. Mining Law. The mining law has been updated and is meant to broaden the mining industry base in Mexico. However restrictions and control are an essential part of the law. 4. Taxes. Income Taxes are moderate but production and ex-port, taxes are a severance tax not based on profit. There is no reduction in taxes for depletion. 5. Metal Prices. Mexico's industry is subsidised at the expense of the mining industry through official prices set slightly lower than world prices -10- B. Favorable. l. Mexico is a mineral-rich country. 2. Mexico has a stable government. 3. Mexico has a strong-convertible currency. 4. Direct production costs for medium to large operations are low. 5. The proximity to the United States assures a large market in addition to the growing market in Mexico. Future. The most striking feature about Mexico today is the tremendous social gains. Education receives, by far, the largest share of the national budget; health facilities are readily available and are ex-panding; electricity and roads are coming to the small villages and wages are being raised in an attempt to make even the poor farmer a consumer. Mexico is expanding industrially to keep in step with the local demands and manufacturing more and more of its necessities in or-der to reduce the need to import, which makes its trade balance more favorable. Mexico yearly increases the export of manufactured goods where previously the country had only been an exporter of raw material and crafts. Politically Mexicans are, and should be, proud of their ancient past and their recant history. They are, therefore, ready and anxious to work with foreign companies if this partership will assist in the development of Mexico as a country and to the advantage of the Mexican people. The exploitation of Mexico to the advantage of other peoples is a thing of the past. Mexico is a developed country and expects to be treated as such. The Mexican mining industry offers an opportunity to those willing to study the problems accept the laws and invest in the social -as well as financial- future of Mexico. D.F. Coolbaugh Mexico, D.F. Mexico, May 1970. DFC/mfb. - 11 -
In 1928, Utah Construction Company completed its first project outside of the United States with the 110 mile railroad for Southern Pacific of Mexico. Over the next 30 years, UCC continued to work on projects in Mexico including dams, roads, mining, and canals. The collection contains several booklets and correspondence along with approximately 500 photographs. ; 8.5 x 11 in. paper ; D-1.1 6-62 INTER-OFFICE CORRESPONDENCE Date: February 7, 1973 To: Mexico Files From: Weston Bourret Sub: CONVERSATION WITH JIM HANNAN, CONSULTING MINING ENGINEER, COLIMA, MEXICO Ref: Mexican Report of 1972 A. M. Wilson c.c. E. C. DeMoss H. G. Peacock R. O. Wheaton H. Douglas On January 22, 1973, I had a call from Jim Hannan in response to previous discussions on Mexico. Following is the substance of the conversation: 1. The large Mexican mining companies like Penles, Asarco de Mexicana, Frisco, and Mexicana de Cobre are inundated with requests from American and Canadian companies for joint venture propositions. Foreign companies with generous exploration budgets are coming to realize that the key to entering Mexico is the right Mexican partner. Accordingly, American companies are seeking out established operators. 2. Asarco's deal with the Mexican government for La Caridad has hit a major snag in regard to management and technical coordination. For these reasons, financing is stalled. Jim Hannan is a close friend of Eng. Garcia Locana, Assistant Manager for Asarco, and has promised to keep me informed. The President of Asarco Mexicana is Gorge Larea. 3. One of the major problems to working in Mexico is the serious shortage of competent geologists and mining engineers. In order to get a good man (if there are any), you must resort to piracy. Mexico's best-known consulting geologist, Georges Ordonez, has retired and is turning his practice over to his son Ezekial, age 34. 4. The Fluor Utah joint venture arrangement, known as Azteca, has been dissolved for lack of business. 5. Jim Hannan recommends closely watching the La Caridad situation before making any major move or commitment. One of the few active foreign organizations in Mexico is Placer Mexicana. Fortunately, Placer has a staff of Spanish-speaking geologists, including a few Columbians, formerly attached to the Pato operation. .12 - 2 - 6. Hannan spent several years running Daniel Ludwig's mining and exploration activities. Ludwig has pulled out of exploration and Hannan is presently spending most of his time for Martin Marietta and the Banks. Altogether Jim Hannan has had about twenty-five years in Mexico and is regarded as an ""old hand"" in the mining business. Personally, I regard him as most reliable and unusually well-informed. W.B. Weston Bourret WB:nam D-l.l 6-62 File INTER-OFFICE CORRESPONDENCE Date: . 8 February 1973 To: E. C. DeMoss cc A. M. Wilson From: Weston Bourret Sub: MEXICO - ATTACHED MEMO Ref: The attached memo on Mexico was prompted by rumors through Fluor Utah, Asarco and Georges Ordonez that investment climate in Mexico has taken a turn since my report of last year. Last fall, the Mexican Secretary of Commerce, Jose Campillo Sainz, gave a talk before a U. S. conference on investment policy. According to Jim Hannan, there has in fact been a rift between factions in the Mexican government and the United States business community. Wes Weston Bourret WB/nam Attachment
In 1928, Utah Construction Company completed its first project outside of the United States with the 110 mile railroad for Southern Pacific of Mexico. Over the next 30 years, UCC continued to work on projects in Mexico including dams, roads, mining, and canals. The collection contains several booklets and correspondence along with approximately 500 photographs. ; 8.5 x 11 in. paper ; REGULATIONS GOVERNING THE UTILIZATION OF IRON OXIDE ORES, WITH THE EXCEPTION OF OCHRES (Translation from ""Diario Oficial"" of September l8th., 1952) MIGUEL ALEMAN, Constitutional President of the Mexican United States, to its inhabitants, KNOW YE; That, exercising the powers granted to the Executive of the Union by Section I of Article 89 of the Political Constitution of the Mexican United States, and pursuant, furthermore, to Articles 126 and 129 of the Mining Law, I have seen fit to issue the following REGULATIONS GOVERNING THE UTILIZATION OF IRON OXIDE ORES, WITH THE EXCEPTION OF _OCHRES_ Article 1. The special concessions covering mining reserves and relating to substances embraced by these Regulations shall be granted taking into account the technical ability and financial resources of the applicant, as well as the purpose for which the ore is to be used. Article 2. The ore shall be destined mainly for consumption in the iron and steel plants of the concessionnaire, located in the country. Article 3. The concessionnaires shall be under the obligation of supplying the needs for the ore of other consumers in the country whenever the latter so request them and lack sources of supply of their own, at market prices and whenever such concessionnaires have a surplus after meeting their own needs over a minimum 20-year period, in the opinion of the Ministry. Article 4. No concessions applied for to supply plants which have already their sources of supply shall be granted, whenever such plants can meet their needs directly or indirectly over a reasonable period of time, it being considered that, in such cases, the granting of the concessions would not benefit the general interests of the country. Article 5. The concessions shall embrace two periods: the first, consisting of two years' exploration work and the second period, which shall embrace the remainder of the term set in the concession, to explit the claim, in the event that a commercially utilizable deposit should have been found. The following requisites shall be specified in the concessions in connection with the aforesaid periods: I. The concessionnaire shall be under the obligation of making an original investment for exploration purposes. This investment shall amount to a minimum of $5,000.00 (pesos) per hectare. This obligation must be guaranteed by a deposit in cash in Nacional Financiera or by a bond executed by an authorized company. The deposit or bond shall amount to 20% of such investments. II. Within sixty days following the date the concession is granted, the concessionnaire shall be under the obligation of presenting to the Ministry of Economy, for its approval, a project of the exploration works, which may be drilling, cuts, shafts, tunnels, etc., in addition to geological and topographic studies. III. In the event that the superficial area granted is 20 hectares, the minimum investment for mining operations shall never be less than $750,000.00 (pesos), which investment must be increased by $10,000.00 (pesos) minimum for each 10 hectares or fraction in addition to the original 20 hectares. All works connected with this investment must be carried on within a maximum period of two years, reconed from the date the exploitation period commences. IV. If the concessionnaire has no smelter, he must build a plant which can treat a yearly minimum of 30,000 tons of ore. This plant must be built within four years from the date the exploitation period starts. V. Apart from the minimum output established for royalty purposes in the second paragraph of Article 8, the concessionnaire shall be under the obligation of producing a yearly minimum volume of ore, which output shall be fixed after hearing the views of the Mining Development Commission and taking into account the size of the deposit, the capacity of the plant or the concessionnaire's contracts with other consumera. Article 6. The concession shall be considered as terminated if the concessionnaire has not discovered a commercially exploitable deposit at the end of the two year exploration period. Article 7. The concessionnaires, after obtaining authorization from the Ministry, may export yearly a quantity equal to the treatment capacity during one year of the existing or proposed smelter, and provided the net value of the exportations is used for building a steel plant or the enlargement of an existing one. Article 6. The concessionnaires shall be under the obligation of paying a royalty to the Mining Development Commission. This royalty shall amount to a minimum of 3% for exploitations where the ore is intended for steel plants in the country and 6%, as a minimum, when the ore is to be exported. The royalty shall be determined an the value of the ore output. A minimum output shall be specified for payment of the royalty, based on the importance of the deposit. The concessionnaire must pay the royalty on this volume, whether the output reaches this minimum or not. Article 9. The royalty may be paid in cash or in ore, at the choice of the Mining Development Commission. If collected in money, the form of estimating the production shall be specified, which may be a half-yearly average of the sale price of iron ore in the country, or, lacking such a price, the public quotation in the United States. If paid in ore, the delivery point and other supplementary data shall be specified. 2 Article 10. It shall pertain to the Mining Development Commission to supervise the output for the payment of the royalty, at the expense of the concessionnaire. Article 11. As regards technical ability, the applicant for the concession must prove that he is a miner or the owner of a mining concern and with sufficient experience or has technical personnel which is adequate for the mining works, in the opinion of the Ministry of Economy. As regards financial resources, proof must be furnished that he has the necessary capital. The plans for the works and installations and for the exploitation and treatment systems must be drawn up by a Mining Engineer holding a degree and registered as a mining expert at the Ministry of Economy. Article 12. The life of the concessions shall be a maximum of thirty yrers, renewable for additional twenty year periods, provided the concessionnaire is in a position to continue complying with his obligations and that the renewal would not be detrimental to public interests, in the opinion of the Ministry of Economy. The renewal shall only be granted covering a sufficient area to enable the concessionnaire to have the necessary ore for his own consumption needs over a twenty-year period. Article 13. The minimum area which can be granted to a single individual or company shall be 20 ""pertenencias"" (#), and the maximum area, covered by one or all the concessions granted, and located throughout the Republic of Mexico, shall be 500 ""pertenencias"" (#). Article 14. The concessions referred to in these Regulations shall only be granted to Mexicans and to Mexican companies. The provisions of the preceding paragraph and of Article 4 shall be applicable to transfers of concessions. Article 15. Failure to comply with any of the obligations which concessionnaires undertake according to the requisites specified in Articles 4 and 8 and Sections I, II, III, IV and V of Article 5 of these regulations shall furnish grounds for the respective concessions to be declared forfeit. The causes provided for in Section II of Article 22 of the Regulations governing National Mining Reserves shall also be causes for forfeiture of the concession. Article 16. The Mining Development Commission must abide by the rules contained in these Regulations, insofar as concerns fundamental requisites, in all contracts which it makes for the deposits of this type which form part of its assets. Article 17. The provisions of the Regulations governing National Mining Reserves now in force shall govern in everything not provided for in these Regulations. (#) 1 ""pertenencia"" is equal to 1 hectare. 3 TRANSITORY ARTICLES First. The bases dated September 29, 1941 for the utilization of iron oxide deposits shall be repealed from the date these Regulations go into force. Second. These Regulations shall go into force on the date of their publication in the ""Diario Oficial"" of the Federation. Issued at the seat of the Federal Executive Power, in the City of Mexico, Federal District, on September 15, 1952. (Sigd) MIGUEL ALEMAN ANTONIO MARTINEZ BAEZ, Minister of Economy
In 1928, Utah Construction Company completed its first project outside of the United States with the 110 mile railroad for Southern Pacific of Mexico. Over the next 30 years, UCC continued to work on projects in Mexico including dams, roads, mining, and canals. The collection contains several booklets and correspondence along with approximately 500 photographs. ; 8.5 x 11 in. paper ; PLANNING & DEVELOPMENT 31 MAY 1972 MINING DIVISION UTAH INTERNATIONL INC. Mexico Study Re: Mexico Report Paradise, California May 27 1972 Mr. Weston Bourret Vice-President Utah International Inc. 550 California Street San Francisco, California 94104 Dear Wes; This will acknowledge and thank you for your letter of May I7th. I am taking the liberty of enclosing my translation of the re-gulations which apply to special concessions in the National Reserve.(copper) This may help, to clarify the official attitude on this subject. In essence, officially, the Government will listen to and consider applications for spe-cial concessions in the National Reserve only from mexicans or mexicanized Companies. Consequently the first step is to associate with qualified mexican or mexicanized partners. This can be done in several ways:- 1- By acquiring the ""B"" stock of a qualified Mining Company whose application will be favorably considered by the Government. 2- By associating with a reputable and well-established mexican financial Institution to incorporate as a mining Company. 3- By organizing or acquiring a mexicanized Company (66% ""A""-3k% ""B"" shares) with a qualified and influential mexican group to apply for the special concession and later seek Government participation. Until one of the three indic ated steps has been accomplished I believe it would be futjle to approach the Government on the subject of a special concession.,During the early stages of the mexiacnization process some of the officials came under fire for subverting or circumventing the spirit of the law by accepting Mexicanized Companies with ""dummy"" ""B"", mexican stockholders, ect. Consequently the officials are now extremely sensitive and meticulous about carrying out the letter as wellas the spirit of the Law. Finally the mexican financial policies have generally been realistic and practical, Economic conditions in the future may lead to a more lenient attitude toward foreign investment. Specifically, in reply to the fourth paragraph of your letter of May 17th. for the reasons mentioned above I believe that it would be a mistake to approach any of the government ministries at this stage, and that if you did, they would politely but emphatically refuse to recommend the names of any possible associates. with best regards,as always Sincerely yours Al Rodriquez A.I. Rodriquez
In 1928, Utah Construction Company completed its first project outside of the United States with the 110 mile railroad for Southern Pacific of Mexico. Over the next 30 years, UCC continued to work on projects in Mexico including dams, roads, mining, and canals. The collection contains several booklets and correspondence along with approximately 500 photographs. ; 8.5 x 11 in. paper ; 12 May 1972 Mr. Alfredo Rodriguez Consulting Geologist 5845 Pentz Road Paradise, California 95969 Dear Al: This is to confirm our conversation of yesterday in reference to your preparing a memo on Mexico. Utah's objective in entering Mexico would be a large, open-pit copper mine with reserves in excess of 100 million tons. The grade, of course, is unknown at this time. However, since La Caridad feasibility is premised on 0.77% grade, perhaps we could live with same. Your assignment is to prepare a time schedule, by years, setting out in some detail the logical steps and procedures required in setting up a Mexicanized office. We accept the fact that this might take a year or two. Please include in your memo comments on the various government offices we would be dealing with, legal counsel, tax guidelines, administrative organization and geological staff. To the extent possible, we would employ Mexican Nationals. However, for the first year or two, no doubt an American with long experience in Mexico and negotiating talents should prove helpful. After pre-paring the time schedule and per our discussion, we would assign an approximate dollar figure for each item. Enjoyed very much seeing you this week. With kind regards and looking forward to hearing from you. Yours sincerely, Weston Bourret Vice President WB/nam
In 1928, Utah Construction Company completed its first project outside of the United States with the 110 mile railroad for Southern Pacific of Mexico. Over the next 30 years, UCC continued to work on projects in Mexico including dams, roads, mining, and canals. The collection contains several booklets and correspondence along with approximately 500 photographs. ; 8.5 x 11 in. paper ; 17 May 1972 Mr. Alfredo Rodriguez Consulting Geologist 5845 Pentz Road Paradise, California 95969 Dear Al: Many thanks for your prompt response in preparing budget estimates for a two-year project under a Mexicanized company. I judge from your letter that probably the most practical approach to securing a large concession in Mexico can best be negotiated by working with the Mexican government officials. Will you please send us the names and titles of the two or three principle officials in the government with whom we might consider opening negotiations. Naturally, I assume that we would not begin with the president or one of his cabinet members. On the other hand, you might recommend that we open conversations with the Minister of Development or the Ministry of non-Renew-able Resources. Am I correct in guessing that one of the government ministries might prove advantageous in recommending the names of reliable associates. Again, many thanks for your speedy budget preparation. We are presently engaged in typing and editing for presentation at a later date. With all of the best, Yours sincerely, Weston Bourret Vice President WB/nam
In 1928, Utah Construction Company completed its first project outside of the United States with the 110 mile railroad for Southern Pacific of Mexico. Over the next 30 years, UCC continued to work on projects in Mexico including dams, roads, mining, and canals. The collection contains several booklets and correspondence along with approximately 500 photographs. ; 8.5 x 11 in. paper ; 5 June 1972 Mr. A. I. Rodrigues 5845 Pentz Road Paradise, California 95969 Dear Al: Many thanks for your letter of May 27 and Translation of Article 27, concerning Constitutional Law of Mineral Resources and Special Concessions. Me are in complete agreement with you about making no approach to the government at the present time. Also, I know you are aware from our conversation that no such approach has been made, or employed in any way. Our present favored inclination is to associate ourselves with a reputable and well-estabilshed Mexican financial institution such as an investment banking group. But before considering an old conser-vative banking group, we must secure recommendations from our Execu-tive Committee. This morning I approved your statement and expense account, so within a week or two you should be receiving your check. With best regards and many thanks for your generous assistance. Sincerely yours, Weston Bourret Vice President WB/nam Attachment
In 1928, Utah Construction Company completed its first project outside of the United States with the 110 mile railroad for Southern Pacific of Mexico. Over the next 30 years, UCC continued to work on projects in Mexico including dams, roads, mining, and canals. The collection contains several booklets and correspondence along with approximately 500 photographs. ; 8.5 x 11 in. paper ; File 4 December 1972 J. K. Allen cc W. Bourret E. C. DeMoss Hugh Douglas Mexican Government Bonds currently held by Utah Construction I have been corresponding with a U. S. lawyer regarding a copper pros-pect south of El Paso in Mexico. The Mexican owner of the property has indicated that should any foreign companies participate in explora-tion, development and (presumably) eventual exploitation of the deposit, that the coat of foreign participation might be made in the form of Mexican government bonds. In light of the above, could you advise the status of any Mexican government bonds held by Utah. I understand that we were paid partially in bends for construction work performed several years ago. What type of bonds are they? are they in default? has interest baas paid? Any information you have would be helpful in assessing the prospect. I should add that Utah's management has advised Wes and me that the company at this time has no interest in Mexico. Our interest may change with further study. Information on our bonds will help in evaluating the mining industry in Mexico. Hugh Douglas HD/nam