Manuel Reyes, president of the Mexican Association of Mining Engineers, said that cartels have complicated the situation of both companies and employees. 

The situation of insecurity for Mexican companies and their employees has increased during the last few months, according to Manuel Reyes, president of the Mexican Association of Mining Engineers, Metalworkers, and Geologists.

In an interview with The Wall Street Journal, Reyes expressed that engineers, executives and even miners have being preyed upon by criminal gangs, being kidnaped and subjected to extortion.

Mexico, the world’s biggest silver producer and a major producer of gold, copper and lead, has increased its share of mining companies’ global exploration dollars, from 4.6% in 2005 to 6.6% in 2014, according to data provider SNL Financial.

But insecurity for Mexican mining companies and their employees is also on the rise, expressed Reyes.

“It’s a daily danger,” Mr. Reyes said. “It’s organized crime besieging people.”

The WSJ pointed out that the Mexican government has tasked its new 5,000-member Gendarmerie with protecting economically sensitive industries like mining and petroleum production.

The Gendarmerie, as well as troops regularly deployed to remote mining areas, certainly helped to correct the situation to a degree, according to Reyes. But, “the rule of law we have right now is very lax. The question is why don’t the foreign companies complain openly?”

And cartel violence and criminality has started to flow over for miners in Mexico, according to the WSJ.

As an example, the paper presents the case of McEwen Mining Inc. ’s El Gallo mine, which on Monday found itself sitting on 7,000 ounces of gold, after a refinery upgrade allowed an unusual buildup of the precious metal. On Tuesday, thieves armed with automatic rifles stole the whole batch.

Police and company officials now suspect inside knowledge helped the armed robbers in a crime that has attracted global headlines and highlighted worries about the safety of miners in Mexico, one of the world’s largest mining centers.

Developing countries from Zambia to Chile have become increasingly more challenging for mining companies, amid increased tax demands, more effective community opposition and tightening environmental standards.

The McEwen mine is located in the same coastal mountain range that is the cradle of Mexico’s Sinaloa Cartel, one of the country’s premier narcotics gangs. The area has been riven by violence following the arrest of its leader Joaquín “El Chapo” Guzmán and others involved in the narcotics business.

An unnamed senior McEwen executive said his company is often aware of cartel activity in the area and will avoid drilling where the gangs appear to be operating at the time. He said the company has no relationship with the cartels.

Criminal activity in Mexico, where exploration by foreign mining groups has been rising, could potentially further winnow down the increasingly slim number of countries deemed to be safe by the industry, according to the WSJ.

Mexico, the world’s biggest silver producer and a major producer of gold, copper and lead, has increased its share of mining companies’ global exploration dollars, from 4.6% in 2005 to 6.6% in 2014, according to data provider SNL Financial.

In 2013, an executive at steel and mining giant ArcelorMittal was shot in Lázaro Cárdenas, in a killing that former and current Mexican intelligence officials believe was the work of a local and powerful drug cartel.

In March, three employees of Goldcorp Inc. were found dead in the state of Guerrero, after they and another employee were kidnaped earlier that month, according to local press reports.

A spokeswoman for Goldcorp, the world’s largest gold company by market capitalization, said the employees weren’t at the mine or in Goldcorp-supplied transportation at the time of the incident. She declined to comment further.

In February, Toronto-based Torex Gold Resources Inc. said four of its workers were among 13 kidnaped near their mine in the state of Guerrero. Eleven of those kidnaped either being freed or found, the company said in a statement. Torex Gold didn’t return calls seeking further comment.

And federal forces last year moved to shut down the smuggling to China of many thousands of tons of iron ore produced in clandestine mines or extorted from companies by Michoacán’s violent Knights Templar gang, points out the WSJ.

Original Article: http://www.eluniversal.com.mx/in-english/2015/mexico-criminal-gangs-cartels-mining-industry-michoacan-guerrero-104179.html