HomeNewsAnalysisIllegal Mining a Golden Opportunity for Mexico Crime Groups
ANALYSIS

Illegal Mining a Golden Opportunity for Mexico Crime Groups

ILLEGAL MINING / 29 SEP 2016 BY PATRICK CORCORAN EN

A prominent Mexican activist turned government official recently called attention to the ties between organized crime and the nation's mining industry, sounding an alarm that has grown increasingly loud in recent years.

In an early September public event concentrating largely on the 1994 Chiapas uprising, Jaime Martínez Veloz, head of the official Commission for the Dialogue with Indigenous Peoples (Comisión para el Diálogo con los Pueblos Indígenas) and a longtime advocate, blamed Mexico's mining industry for strengthening organized crime.

Martínez Veloz's agency, which operates as part of the Interior Ministry, has long made the mining industry's potential for harming Mexico's indigenous communities a priority. In 2014, it issued a report decrying the extension of tens of thousands of mining concessions over the past 20 years, thereby threatening many rural communities near the facilities.

Martínez Veloz's focus on the danger of the mining industry's ties with organized crime is more novel, however, and it is part of a growing chorus; government officials, activists, and investigators have all noted with alarm the increasing control groups like the Zetas and the Knights Templar (Caballeros Templarios) have over mining interests in Mexico.

For instance, a lengthy April report (pdf) by the Global Initiative Against Transnational Organized Crime details the phenomenon's evolution in Mexico and other Latin American countries. The authors estimate that 9 percent of Mexico's multibillion-dollar gold industry is the result of illegal production, while mining in five different states -- Chihuahua, Guerrero, Michoacán, Morelos, and Tamaulipas -- is controlled by criminal groups.

Criminal influence over mines comes in many different forms. Often, gangs will demand extortion payments from local and multinational mine operators in exchange for allowing them to work their concessions. In other cases, criminal groups will take full control over a mining operation, using it both as a source of revenue and as a mechanism for laundering money. The groups that reportedly rely on mining include nationwide giants like the Sinaloa Cartel and the Zetas, and more regional powers such as the Knights Templar, the Guerreros Unidos and Los Rojos.

Specific examples of the growing ties between legitimate miners and criminal groups have filtered out with increasing frequency. In 2015, mine owner Rob McEwen admitted to the Associated Press that he cut deals with Sinaloa criminal groups after one of his operations was robbed. In 2014, a Coahuila coal mine owner suspected of laundering money for the Zetas through his facility was murdered outside his home.

InSight Crime Analysis

The confluence of criminal groups and the mining industry is longstanding in much of Latin America. According to the same Global Initiative report mentioned above, illegal gold mining accounts for 77 percent, 80 percent, and 91 percent, respectively, of all national production in Ecuador, Colombia, and Venezuela. The extraction of other natural resources, such as emeralds in Colombia, is also overrun by criminality.

Criminal involvement in mining also spills over into other illegal realms. In Peru, for instance, money laundering patterns refined to handle billions illegal gold proceeds can also be put to use to launder money earned in the cocaine trade.

But while there is plenty of evidence of organized crime activity in Latin America's mining industries over the past five years, it is a newer phenomenon in Mexico. This is part of a broader diversification of activities observed among Mexico-based criminal organizations in recent years. As InSight Crime has noted on many prior occasions, both longtime hegemons like the Sinaloa Cartel and upstart regional groups have expanded beyond their traditional strong suit of drug trafficking. Today, they are active in extortion -- which consequently translates well to their incursions into mining -- as well as kidnapping, human smuggling, and many other criminal realms.

SEE ALSO: Coverage of Mining

Criminal involvement in Mexico's mining industry is a small part of this broader dynamic, and indeed is a subset of the crime groups' increased involvement in resource extraction. Groups around the country have developed a market at home and abroad for oil and gas stolen from the state oil company Pemex. In Lázaro Cárdenas, the Michoacán port city where the Knights Templar and the Michoacán Family have long reigned supreme, the assassination of a local steel executive, reportedly amid demands for extortion payments by his multinational employers, made international news in 2014.

There are two major negative consequences to this development: First, criminal organizations are more resilient because they carve out new sources of revenue as well as new allies in the business community, making it more difficult for the government to dismantle these illicit networks. And second, crime groups further enmesh themselves in the legitimate Mexican economy, increasing inefficiencies and placing a brake on the entire nation's prosperity.

share icon icon icon

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

What are your thoughts? Click here to send InSight Crime your comments.

We encourage readers to copy and distribute our work for non-commercial purposes, with attribution to InSight Crime in the byline and links to the original at both the top and bottom of the article. Check the Creative Commons website for more details of how to share our work, and please send us an email if you use an article.

Was this content helpful?

We want to sustain Latin America’s largest organized crime database, but in order to do so, we need resources.

DONATE

Related Content

CRIMINAL MIGRATION / 23 JUN 2017

Representatives of three US federal law enforcement agencies were unable to offer the Senate Judiciary Committee any conclusive evidence…

MEXICO / 11 OCT 2018

Authorities in Mexico and the United States have yet to identify who is behind the construction of a recently dismantled…

COCAINE / 8 NOV 2021

Cocaine, synthetic drugs, weapons, migrants, gasoline - this range of criminal economies has seen violence escalate in Mexico's northern state…

About InSight Crime

THE ORGANIZATION

Gender and Investigative Techniques Focus of Workshops

26 NOV 2021

On November 23-24, InSight Crime conducted a workshop called “How to Cover Organized Crime: Investigation Techniques and A Focus on Gender.” The session convened reporters and investigators from a dozen…

THE ORGANIZATION

InSight Crime Names Two New Board Members

19 NOV 2021

In recent weeks, InSight Crime added two new members to its board. Joy Olson is the former executive director of the Washington Office on Latin America…

THE ORGANIZATION

Senate Commission in Paraguay Cites InSight Crime

12 NOV 2021

InSight Crime’s reporting and investigations often reach the desks of diplomats, security officials and politicians. The latest example occurred in late October during a commission of Paraguay's Senate that tackled…

THE ORGANIZATION

Backing Investigative Journalism Around the Globe

5 NOV 2021

InSight Crime was a proud supporter of this year's Global Investigative Journalism Conference, which took place November 1 through November 5 and convened nearly 2,000 journalists…

THE ORGANIZATION

Tracking Dirty Money and Tren de Aragua

29 OCT 2021

InSight Crime was delighted to support investigative reporting in the Americas through a workshop with our friends at Connectas, a non-profit journalism initiative that facilitates collaboration…