Mexican Drug Cartels Now Make Money Exporting Ore

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. {snip}

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.

{snip}

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.

{snip}