Mexican Criminal Gangs Set Their Sights on Illegal Mining Tracey Knott - InSight
go to original July 17, 2012

As Mexican authorities crack down on drug trafficking, criminal gangs are increasingly moving into the illicit trade in minerals, with some even operating their own mines and selling the resources to international corporations.

Mexico is one of the Latin America's richest sources for minerals and its mining industry has experienced a period of sustained growth. In 2010, Mexico exported $15.47 billion in minerals and growth is forecast to continue at least until 2015. Though the benefits have been enormous for Mexico's economy, the rise has in some cases been a burden thanks to the attention mining has garnered from crime syndicates. Cartels have begun targeting the industry more in recent years, kidnapping workers for ransom, extorting up to $37,000 a month in “security fees” from businesses, and stealing resources to sell on the black market.

In recent cases, cartels have even been found to operate their own mines. For example, in May it was announced that the federal government had discovered several illegal coal mines in the northeastern state of Coahuila being run by criminal gangs.

The amounts earned by gangs from exploiting the mining sector are considerable. In 2010, steel producers reported that $240 million worth of steel was stolen while an estimated $3 million in gold was lost to theft between 2008 and 2012 in Mexico. The rising number of cases has forced some companies, like Canada’s Goldcorp, to switch to aerial rather than ground transportation to avoid robberies. Others, like Torex Gold Resources, have ceased operations altogether in areas of Mexico that are deemed too risky.

Once stolen, gangs can either sell the resources on the black market or attempt to integrate it into the legitimate commodity trade through the use of corrupt companies. In an example of the latter, Ignacio Lopez, a money launderer for the Familia Michoacana was arrested in October 2010 for allegedly selling illegally extracted iron ore in the southwestern state of Michoacan. Lopez is believed to have worked with three companies to export iron ore to China. Combined, the companies reportedly exported over a million tons of illegally obtained iron ore that year, amounting to some $42 million.

In addition to the profitability of mining, the industry has a particular allure for gangs as a way of laundering their money, as the Familia case indicates. Dirty cash can be converted into valuable minerals, which can then be moved and sold throughout the world.

We invite you to add your charity or supporting organizations' news stories and coming events to PVAngels so we can share them with the world. Do it now!