Can you introduce Peña Colorada to our international readers?

Peña Colorada is a 50:50 JV between Arcelor Mittal and Ternium. We are a fully integrated mining operation, so we handle every single step from extracting the ore from the ground, to processing it (upgrading to higher ore content), producing a final iron concentrate and pellets, and shipping the product out. Installed production capacity is about 4.5 million t/y of iron ore concentrate and 4 million t/y of iron pellets, taking the ore from the mine with a grade of 20% magnetic iron content to 66% total iron content in pellet. Next year, we will move over 85 million t/y of earth movement to achieve the 4 million t/y of final pellet product. Peña Colorada plays a key role in Mexico’s industry, contributing to 30% of the country’s pellet production – the largest iron ore pellet producer in the country. All of Peña Colorada’s production stays in Mexico, with the final product supplied to local customers, most likely to steel plants owned by Mittal and Ternium. 

With 50 years in the market, could you elaborate on the operational modernizations undertaken? 

We have been working continuously to modernize the original beneficiation plant; in 2018, as the quality of the raw ore started dropping and we needed more advanced processing to produce a high-quality final product, we added a second plant. We optimized our processes, installed better equipment, and made improvements across the board, from better ventilation to upgrading the electrical systems and ensuring more efficient sintering. 

As the mine gets older and the ore grades are naturally declining, most of our efforts and investments today go into ensuring a more efficient mining operation, including better extraction equipment and waste handling, always with safety and sustainability at the top of our minds. Peña Colorada has invested significantly in upgrading our tailings facilities to meet higher safety and environmental standards, especially regarding water use. On the beneficiation plant, we installed new filtration systems to remove water more efficiently and replaced the flotation system to separate the iron-rich material from waste rock more effectively, enabling a higher percentage of iron from lower-grade ore. Additionally, we boosted our lab capabilities to analyze the ore and concentrate, which helps fine-tune processing and improve recoveries. On the palletization plant, we are using modern imaging systems to monitor pellet size, shape, and consistency in real time. 

In total, we have over US$200 million in current active projects as part of our modernization strategy. 

Can you walk us through Peña Colorada’s ESG mandate and strategy?

On the environmental side, we have taken a huge step in replacing traditional tailings with dry storage. Moreover, we can now recover over 90% of our water using our advanced water treatment plant. We always expand our infrastructure to meet not only today’s requirements but be ready for the future. Peña Colorada is also very mindful of the natural environment around us and we run a major reforestation program with over 150,000 trees planted annually – a 5 to 1 reforestation program, or 5 new trees for every 1 tree impacted. 

Equally important is our social commitment close to our host communities in Colima and Jalisco. Working collaboratively with both government and local communities, we have been building roads, schools, churches, and clinics, making sure we have a direct positive impact across different dimensions. Education has been a core focus of ours, supporting local schools by offering scholarships as well as school equipment to promote children’s progress to higher education; at the University of Colima, we have an excellence award for top students.

As one of the largest employers in the region, with 1,400 direct employees and up to 3,000 total indirect jobs, Peña Colorada has a deep impact on the local economy and beyond. 

How are you observing the threat of tariffs between the US and Mexico? 

This is certainly one of the big threats on the horizon. Tariffs can dramatically shift cost structure, especially in areas like equipment procurement, but we are well insulated from this risk thanks to our diverse pool of suppliers (both US-based as well as European or Brazilian). Tariff wars are outside our control, so we must focus on what is within our control, namely operations and looking for continuous improvements to protect the competitiveness of our product.