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Latino Daily News

Saturday March 22, 2014

Mexican Newspaper Reports Organized Crime Running Mines

Mexican Newspaper Reports Organized Crime Running Mines

Photo: Mining in Mexico

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Organized crime gangs have seized control of iron-ore mines in the western Mexican state of Colima and are selling the mineral to China at below-market prices, costing legitimate producers more than $12 million this year, Mexico City daily Reforma reported Thursday.

Business leaders speaking on condition of anonymity told the newspaper that the gangs have exported more than 100,000 tons of iron ore to China since Jan. 1.

Those gangs deliver the mineral to various intermediary companies, including Oriente Minero, Shangai International de Sinaloa and Grupo Minero Leeocta, at the port of Manzanillo, Colima.

The middlemen in turn sell the product to China at roughly 50 percent below international market prices.

The process starts when the criminal gangs seize control of heavy machinery and force the producers to operate under their control, the companies say.

Some mining companies have filed criminal complaints with federal prosecutors over the mine seizures, but the legal action dating back to 2012 has yielded no results.

Criminal gangs stole some 300,000 tons of iron ore from mines in the states of Jalisco, Colima, Michoacan and Guerrero in 2013, mining companies say.

The spokesman for steelmaker Altos Hornos de Mexico, Francisco Orduña, said operations by federal police and army soldiers in Manzanillo and the port of Lazaro Cardenas, Michoacan, have failed to halt the mine takeovers.

The company cannot ensure the safety of its workers and has therefore decided to remove them from its mines in one zone of Colima due to the lack of response from authorities, Orduña said.

Another Mexican firm, Reyna Mining, as well as Luxembourg-based Ternium and ArcelorMittal, also operate in Colima, whose iron-ore reserves are estimated at 5 million tons.

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