Thursday, April 14, 2011

Drug gangs clash with miners in Mexico

By Mica Rosenberg
Source: Reuters // Reuters


Mexican drug cartels greedy for new sources of revenue are targeting the country's rich mines, pushing up companies' security costs and prompting at least one project to be halted.

Vast mineral deposits have made Mexico the world's top silver producer and a major source of gold and copper, and the potential riches are too attractive to walk away from, according to companies expected to invest more than $4 billion in the sector this year.

But as international metals prices surge, gunmen are attacking workers to steal valuable ores and equipment at often remote mining sites that have fallen under the gaze of drug gangs extending their reach into new criminal rackets.

Canadian miner Torex Gold Resources Inc halted drilling at its exploration property in the western state of Guerrero last month after assailants stole trucks. Mexican authorities blamed a drug cartel for illegally extracting iron ore at another site and exporting it to China.

Shares in the company slid afterward and although an isolated incident, it raised alarm bells nearby, including a site owned by Canada's Newstrike Capital Inc , which is exploring gold prospects in Cuetzala del Progreso in Guerrero.

Inspecting the property with a group of major shareholders, Newstrike's chief executive Richard Whittall said the report was not the kind of publicity the company was hoping for.

"I had 10 e-mails asking 'are you affected?' It's a body blow but we'll figure it out. As one investor said to me 'the good news is, the gold's still there,'" Whittall said.

The effort may pay off handsomely. Gold hit a record $1,476 an ounce this week, triple what it was five years ago.

Mexico is still a big magnet for foreign investment and is far less risky than some other mining countries such as the Democratic Republic of Congo. A long history of mining since the Spanish conquest, its wealth of untapped deposits and favorable mining laws make it attractive for foreign miners.

RISKIER THAN COLOMBIA

Mining investment is expected to jump 7.3 percent this year to $4.4 billion, according to the national mining chamber.

Drug gangs are seeking a share of the boom.

Steel producers say they lost $240 million to thefts in 2010 and have seen the pace of robberies double so far this year, according to a Mexican industry association.

"They are robbing from companies' (iron ore) deposits or they are taking over the deposits completely," said Raul Gutierrez, head of the national steel chamber. "It makes it impossible to work there."

The wave of thefts has spilled out of an escalating drug war in Mexico, which pits an increasingly stretched military against brutal gangs warring over smuggling routes to the United States and other lucrative illicit businesses.

Deteriorating security is a mounting concern for investors, industry surveys show. More than 37,000 people, including many hitmen and police, have died across Mexico since President Felipe Calderon launched his army-led crackdown in late 2006.

The lawlessness led to a slip in Mexico's ranking in the Fraser Institute's annual study of the top global mining destinations. Some 39 percent of companies surveyed this year counted violence as a "strong deterrent" for investment, versus 33 percent in Colombia, where a U.S.-backed offensive has in recent years quelled a cocaine-funded guerrilla conflict.

Iron ore mines in Mexico's western state of Michoacan have been besieged by the powerful La Familia (The Family) drug cartel that operates in large swathes of the state, extorting businesses and illegally mining material for export.

A captured money launderer belonging to La Familia confessed to exporting 1.1 million tonnes of iron ore last year to China through three established companies in Mexico, netting $42 million, according to the attorney general's office.

For now, many miners are still determined to take a chance and only seven percent of those firms surveyed by the Fraser Institute said they would not invest because of the violence.

But companies are being forced to hire more guards or change the way they transport goods, with some shipping valuable metals by air instead of on dangerous highways.

"We spent 20 percent more on security last year," said Armando Ortega, vice president for Latin America at New Gold Inc , which owns the Cerro San Pedro gold mine in San Luis Potosi state. "There are miners that have suffered robberies of gold-silver dore bars or concentrates. The high prices make gold an attractive target for organized crime.

9 comments:

  1. No, Mexico doesnt need stiffer laws and better maximum security prisons as well as the death penalty... What would ever make you think that?

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  2. This is a cliche filled article that totally leaves out any context or info about the robber baron foreign mining corporations and their own looting INSIDE Mexico. We get instead pro US 'drug war' propaganda like this...

    'Some 39 percent of companies surveyed this year counted violence as a "strong deterrent" for investment, versus 33 percent in Colombia, where a U.S.-backed offensive has in recent years quelled a cocaine-funded guerrilla conflict.'

    What funded the conflict was not cocaine so much as the injustice integral to Colombian society. And these foreign companies operating inside Mexico want US militarized intervention in Mexico just like they pushed for the Colombian government death squads to be funded covertly via D.C., too. Why doesn't this article though talk some about mining company (oil) Chevron in Ecuador, that polluted huge portions of that country and now has a judgement against them for $8 billion dollars that they will never ever pay, thanks to US government support for their looting and polluting of Ecuador. These big international outfits themselves operate like criminals!

    In Mexico, the Canadian firms operate like criminal gangsters and are the biggest robbers the Mexican miners have there. Now these huge corproations themselves have to deal with some criminal gangs that are robbing them so we get news about that. We never hear though about when they employ these gangsters against the miners themselves.

    How about some news regarding how they pollute and loot, rob and murder same as in Ecuador and other South American countries?

    'A long history of mining since the Spanish conquest, its wealth of untapped deposits and favorable mining laws make it attractive for foreign miners.'

    Yeah, no doubt. Too bad still for the people of Mexico, too.

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  3. Legalize drugs and a miraculous morality will decend on Mexico, YOU BET Calderons CRACKDOWN ? Makes you wonder how bad it would be if nobody had done anything,Mexican gangs would be eating children.

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  4. ARDENT, Why don`t you just kill yourself if you hate life so much? I mean really, you gotta be the MOST unpleasant human being I`ve ever heard. I hate to bag on anyone, but dang dude, Your worse than a pissed off woman who can`t get her bra strap buckled. The Other countries in this world CAN make a profit. If the Mexican people are too brain dead to figure out how, when, where, and why to make money off their OWN countries riches, then boo to them, but don`t denigrate other countries for moving foward. You can rest assured, the politicos in Mexico are getting their peice of the pie, so throw your anger at the Governing bodies in Mexico for not helping their "constiuents" and instead lining their own pockets. It`s not secret that the rich in Mexico care about only themselves and everyone else is garbage. That`s a cultural thing that needs working out, but Mexico prospers when another country comes in and does what they can`t, won`t or are too lazy/stupid too do themselves. It just may not be prosperous if your not an elitist in the country. So get off your couch in the big bad USA, and go to Mexico, run for office, and make a change. Your rhetoric makes the right-wing extremists seem tame. I don`t know if your a right-wing kook or what, but if you love Mexico that much, and by all means it`s ok if you do, but quit bagging on every other country because Mexico won`t step up to the plate. Wheeew! I`ve needed to get that off my chest for months now. Sorry Ardent,and no, I don`t expect you`ll accept my apology or understand anything I`ve said as your views are so skewed to whatever your mind thinks up, but at least I tried.

    p.s. No, I`m not from america, mexico or canada. their are other countries that have intelligent minds that do know what Mexico is like. so your comeback that you`ll inevitably try and use won`t fly. Sorry again G`Day Mate!

    ReplyDelete
  5. So, Anonymous 11:41, you don't know a damn thing about the role of international mining companies as gangsters in Latin America in their own right, do you? Nuf said. Or you just don't give a damn...

    'ARDENT, Why don`t you just kill yourself if you hate life so much? I mean really, you gotta be the MOST unpleasant human being I`ve ever heard.... Sorry again G`Day Mate!'

    You Aussie Right Wingers make even the Brit and USA Right Wingers look sane by comparison. None of you would win any prizes in the personal Pleasantness Department yourselves, G'Day Full of Hate Mate.

    'No, I`m not from america, mexico or canada. their are other countries that have intelligent minds that do know what Mexico is like.'

    White Right Wing Aussies hating Mexicans, here comes this new anaymoe fool from Ozzie Land to BB! The voice of Aussie Clowns!

    So just what is Mexico like to you? Full of the indigenous types your country worked so hard to kill off?

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  6. Sierra Leon Africa mining companys attacked by rebels,Govt helpless,UN helpless,British mine co contracted with Executive Outcomes SA outfit,90 days later under budget problem solved. The UN demanded to reenter kicked out the contractors , 90 days after that rebels shooting up mines again. POINT GOVTS ARE BLOTED,AWKWARD,POLITICALLY STRANGLED,EXPENSIVE,INEFFICIENT,ON AND ON.If people are serious and all the whiners,writers,T V etc will shut up this can be quickly ended, but not with political forces.

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  7. Why are Canadian miners in Mexico? Because Mexicans are incapable of running any organization efficiently, THESE MINES WOULD BE OUT OF BUSINESS IN NO TIME__NO SHIT

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  8. No. Canadian companies are in Mexico exploiting the natural resources of a dominated by imperialist USA/ Canada country.

    'Why are Canadian miners in Mexico? Because Mexicans are incapable of running any organization efficiently'

    And don't you Right Wing thugs ever get sick of listening to your own racist selves babble on about supposedly inferior peoples? You neo Nazis make the rest of us sick with you crap, you know...

    And how does BB manage to attract you guys like flies to rotten meat so constantly, Heil Cheney! ... you Flag Waving Clown? Got an answer to that?

    'THESE MINES WOULD BE OUT OF BUSINESS IN NO TIME__NO SHIT'

    Rush Limbaugh ditto nut case in caps once again. LMAO at you turkeys. You are so unoriginal and stupid, all of you.

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  9. ARDENT Just what is it you want to brag about,what great accomplishment,you trend setter you,what has Mexico done of distinction?? We are all stupid,OK what great intellectual achivment ,social?political? Economic?scientific? Hello!!I own business interest in Mexico,I have employees in Mexico,I invested $ in Mexico,I want Mexico toclean up and perform along with 90% of the people living there. GOT IT ??

    ReplyDelete

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