AHMSA - ISRAEL, un entorno propicio para la inversión

Through its subsidiary AHMSA Steel Israel, Altos Hornos de México operates the Arava Mines in that country, handling the mining of copper and manganese in the Negev desert, and AqWise, which generates water treatment technology.

Alonso Ancira Elizondo, Chairman of the Board for AHMSA, explains that both initiatives relate the Mexican steelworks experience in mining and in the optimum usage of water.

How did these investments in Israel come about?

As a result of unfounded accusations made by the previous government, alleging supposed tax fraud, we had to leave the country and we temporarily settled in Israel, where we received legal protection.

Among many other business options, we found the Timna copper mine, which was temporarily shut down.

Our mining training caused us to see an opportunity for applying our expertise and reopening operations with new generation equipment and technology. Today we have important reserves measured and we are beginning production on an industrial scale.

Likewise, due to experience in the optimization of water usage in our mining and steelworks operations in the semi desert regions of Mexico, we became interested in Israel’s advanced technology, and we partnered with the AqWise company which currently operates in Europe and Latin America for the treatment of wastewater.

Finally, Mexico admitted that our taxes were paid, the unfounded allegations were withdrawn, and we returned to the country with two good investments and a close relationship with the State of Israel.

Have these investments proved to be profitable?

Very profitable. We planned the mine for an adequate return when copper was very cheap, and today, with the high price of copper, the situation is much more favorable. In addition, we have discovered nearly 500 million metric tons of potential reserves in that area, with very attractive average grade percentage of copper, which is more than what was initially estimated, and positions Timna as one of the richest deposits discovered at the present time.

The case of AqWise is similar. In addition to being a successful enterprise in the field of water treatment, in our particular case, it has allowed us to substantially increase the efficiency of our plants. Currently AHMSA has replaced 75% of its water consumption that was previously taken from the ground, with recycles water.

Do Mexican workers participate in the Timna mining operation?

Only a couple dozen technicians and highly qualified specialists have been sent from Mexico. All of the remaining personnel are Israeli or resident in the country.

How will the copper production be used?

We expect that part of the production will be used by Israeli industry and the rest will be marketed in Europe and Asia, where this a high demand for this metal.

What is your evaluation of the business environment in Israel?

It is a very favorable environment, in a country that is very respectful of the law, and where investment is absolutely safe for development. This can be confirmed by other Mexican businesses in Israel, such as CEMEX.

Israel is a country that supports and guides investment toward development, especially in areas of national interest, where there are important incentives for new enterprises that create jobs. Such is our case, as we operate in the area of the Negev, where the job-generating investment is encouraged by incentives approved by the Congress and supervised by the Government.

There is a lesson here to be learned by Mexico, to channel investment into areas that, for example, have large oil resources but nevertheless experience extreme poverty.

Have you planned other investments in Israel?

At the present time our priority is to bring the mining operation to full production capacity, which will be achieved by the end of the present year. At the same time, we are investing in research programs in various fields with scientists from that country.

AqWise is working on the development of new technologies, some of which are applied at the three plants operating in Mexico, and work is also ongoing with Israeli specialists in the development of new steel alloys for specific industrial applications.

* Interview included in a special publication of the Mexican newspaper Reforma, as part of the celebration of the 60^th Anniversary of the State of Israel Independence.

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