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| In this Aug. 14, 2013 photo, Mexican army soldiers enter the iron ore mine in the town of Aquila, Mexico. A resident of Aquila, said that since 2012, the Knights Templar cartel demanded residents hand over part of the royalty payments from the local iron ore mine operated by Ternium, a Luxembourg-based consortium. Mexican drug cartels long ago moved into oil theft, pirated goods, extortion and kidnapping, but it still came as a shock this month when federal officials revealed the gangs have broadened the scope and sophistication of their economic empires by entering the country’s lucrative mining industry, exporting iron ore to Chinese and other foreign mills. |
MEXICO CITY
(AP) -- Mexican drug cartels looking to diversify their businesses long
ago moved into oil theft, pirated goods, extortion and kidnapping,
consuming an ever larger swath of the country's economy. This month,
federal officials confirmed the cartels have even entered the country's
lucrative mining industry, exporting iron ore to Chinese mills.
Such
large-scale illegal mining operations were long thought to be wild
rumor, but federal officials confirmed they had known about the cartels'
involvement in mining since 2010, and that the Nov. 4 military takeover
of Lazaro Cardenas, Mexico's second-largest port, was aimed at cutting
off the cartels' export trade.
That news
served as a wake-up call to Mexicans that drug traffickers have
penetrated the country's economy at unheard-of levels, becoming true
Mafia-style organizations, ready to defend their mines at gun point.
Three
Michoacan state detectives were wounded in an ambush earlier this week
when they were traveling to investigate a mine taken over by criminals.
When reinforcements arrived, those officers were also ambushed, part of a
string of attacks on police in Michoacan on Wednesday and Thursday that
left two officers dead and about a dozen wounded.
The
Knights Templar cartel and its predecessor, the La Familia drug gang,
have been stealing or extorting shipments of iron ore, or illegally
extracting the mineral themselves and selling it through Pacific coast
ports, said Michoacan residents, mining companies and current and former
federal officials. The cartel had already imposed demands for
"protection payments" on many in the state, including shopkeepers,
ranchers and farmers.
But so deeply entrenched
was the cartel connection to mines, mills, ports, export firms and land
holders that it took authorities three years to confront the phenomenon
head-on. Federal officials said they are looking to crack down on other
ports where drug gangs are operating.
"This
is the terrible thing about this process of (the cartel's) taking
control of and reconfiguring the state," said Guillermo Valdes
Castellanos, the former head of the country's top domestic intelligence
agency. "They managed to impose a Mafia-style control of organized
crime, and the different social groups like port authorities,
transnational companies and local landowners, had to get in line."
Valdez
Castellanos said that even back in 2010, the La Familia cartel would
take ore from areas that were under concession to private mining
companies, sometimes with the aid or complicity of local farmers and
land owners, then sell the ore to processors, distributors and even,
apparently, foreign firms.
Mexico's Economy
Department said the problem was so severe that it prompted the
government to quietly toughen rules on exporters in 2011 and 2012 and
make them prove they received their ore from established, recognized
sources.
Many exporters couldn't. In 2012, the
department denied export applications from 13 companies, because they
didn't meet the new rules. And the problem wasn't just limited to
Michoacan, or the Knights Templar cartel.
"Since
2010, evidence surfaced of irregular mining of iron in the states of
Jalisco, Michoacan and Colima,"
the department said in a statement to
The Associated Press.
"That illegal activity
was encouraged by the great demand for iron by countries such as China,
to develop their industries," according to the department. "Many trading
companies began to build up big stockpiles of legally and illegally
obtained iron (ore), that was later shipped out for export."
A
Mexican federal official, who was not authorized to speak on the
record, said the cartels would use a combination of threats and outright
theft to get the ore from mines. He said the nexus between the cartels
and export companies was key.
"They extort the
merchandise from mining companies and then export it through legal
companies, or they rob trucks full (of ore) that later turn up in a
legal manner," the official said.
Ofelia
Alcala, a resident of the Michoacan mining village of Aquila, said that
since 2012, the Knights Templar cartel has demanded residents hand over
part of the royalty payments from a local iron ore mine operated by
Ternium, a Luxembourg-based consortium. Alcala, a member of a
self-defense group that rose up in arms in Aquila this summer to kick
the cartel out, said the cartel also had been hiring people to extract
the ore without permits, and then exporting it through another Pacific
coast port, Manzanillo.
"They weren't content
with getting our money and robbing our trucks, so they began secretly
extracting our minerals," said Alcala.
Ternium said in a statement that it has received reports of irregular mining near its operations in Aquila.
"Those have been passed on to the appropriate authorities," the company said in a statement.
Government
figures show the amount of iron ore being exported to China quadrupled
between 2008 and the first half of 2013, rising to 4.6 million tons per
year, precisely during the period the La Familia cartel and later the
Knights Templar cemented their control over Michoacan.
In
2008, Lazaro Cardenas handled only 1.5 percent of Mexico's iron ore
exports to China; by mid-2013, the seaport was shipping out nearly half.
In
2010, the attorney general's office estimated the cartels shipped 1.1
million tons of illegally extracted iron ore abroad that year.
Officials said the export scheme may have involved other sea ports, and that more military takeovers may be necessary.
The
cartel mining issue also resurfaced last year in the coal-mining state
of Coahuila bordering Texas. The former governor, Humberto Moreira,
called a press conference to claim that Heriberto Lazcano, leader of the
Zetas cartel, was running illegal coal mining ventures and partnering
with legitimate ones. So far, none of the accusations have been proven.
The
only known arrests related to cartel mining operations occurred in
Michoacan in 2010, when Ignacio Lopez Medina, an alleged member of La
Familia, was accused of selling ore illegally to China, the federal
Attorney General's Office said at the time.
But
the arrest apparently came to little; the Attorney General's Office
could not say whether Lopez Medina had been tried or convicted of that
crime, nor could The Associated Press determine if he is represented by a
lawyer or is still in custody.
The Chinese
Chamber of Commerce did not immediately respond to requests for
information on companies that have been involved in buying ore from
cartels, knowingly or otherwise.
The Chinese
Foreign Ministry declined to comment on whether China had any measures
in place to ensure the legal provenance of such imports.
The
iron ore, meanwhile, has both swelled the cartels' bankrolls, giving
them more money to buy guns and bribe officials, and fed the hunger of
Asian steel mills.
And it may be a two-way
trade: Precursor chemicals the cartel uses to make methamphetamines
often arrive from China at both the Lazaro Cardenas and Manzanillo
ports.
