Mexico’s notoriously violent drug barons have turned to mining to both expand and diversify their sources of revenue, engaging in the direct ownership and operation of coal and iron-ore mines, especially along the US-Mexican border.
The cartels reap immense returns from the sale of coal to state-owned companies, often obtaining profits as high as 30 times their initial investment, while also obtaining an effective channel for money laundering.
CTV News reports Mexican authorities have confirmed these Mafia-style organizations have recently been found to also be exporting iron ore to China, and that the Nov. 4 military takeover of Lazaro Cardenas port, the country’s second-largest, intended to put a dent in the cartels’ export trade.
According to Mexican human rights groups, since the infiltration of the Zetas drug cartel in the industry, Mexico’s most violent and feared gang, miners are no longer allowed to utilize what limited safety protocols they previously had access to, making the environment all the more hazardous.
That gang, and recently others such as Knights Templar and La Familia, reportedly use their own poorly paid workers, many of them children, or they buy minerals from small-time miners who do not have alternative, but cooperate. Resources are then resold at a profit several times greater than the initial investment.
In addition to obtaining immense profits from their mining ventures Mexico’s drug cartels can also avail themselves of a convenient means of legitimizing and diversifying their earnings. Licit high-income businesses make it easy for the cartels to launder their illegal proceeds.
The entry of Mexico’s drug cartels into the mining sector has a nearby precedent in Colombia, where local drug barons often took up stakes in gold and coal mines.
Images from Wikimedia Commons.