From the Organized Crime and Corruption Reporting Project, December 13:
The abduction of a Mexican community activist who campaigned against an iron ore mine owned by New York-listed Ternium has shone a light on how local cartels benefit from the presence of mining companies in the region.
In January last year, a 71-year-old Indigenous activist named Antonio Diaz left a community meeting in western Mexico and disappeared with his lawyer into the night. Police soon found a white Honda truck, shot up and abandoned in a small town in a neighboring state. But there was no sign of the men.
In the distance loomed the Sierra Costa mountains, home to the vast, dusty expanse of the Las Encinas iron mine. For several years, the two men had been fighting an uphill battle against the mine, which locals claim has devastated wildlife and polluted the water supply.
Las Encinas was run by Ternium S.A., a $6.2-billion multinational steel company with shares listed in New York, headquarters in tax-friendly Luxembourg, and customers such as Tesla, General Motors, and the Mexican government.
The mine, locals allege, offers more money-making opportunities for local cartels, which often charge fees to operate on their turf and in the past have extorted a portion of the royalties villagers received from the mine’s profits.
Those who oppose the mines can become targets for the cartels. In recent years, more than half a dozen people who had challenged Ternium’s mines have been kidnapped, murdered, or disappeared. In one community, an activist was kidnapped and, according to filings made by his lawyers, forced to drop a lawsuit against a mine co-owned by Ternium and steel giant ArcelorMittal.
Activist Diaz did not consider the mining companies to be blameless. At the end of 2022, he wrote to Mexico’s then-President Andres Manuel Lopez Obrador, imploring him to launch an investigation into Ternium. He accused the company of having hired armed groups in the past to “attack and repress Indigenous people” and said its employees had threatened the mine’s opponents.
Ternium condemned “any kind of violent response against the community” and rejected any direct or indirect association “with violent cases…or the disappearance of any people.” Ternium said it has “deep concern over the disappearance” of Diaz and his lawyer, and said the pair had engaged with company officials in a spirit of “openness, freedom, respect, and personal appreciation.”
ArcelorMittal said it operates “within the law, adhering to high international standards regarding human rights and environmental respect.” The company strongly condemned “violence and criminal activity in Mexico” and firmly rejected any direct or indirect association with or responsibility for the perpetrators of violence.
At times, it wasn’t clear Diaz would be able to continue his campaign. After one meeting with Ternium representatives, he inexplicably cut off contact with the other activists in Aquila. A few weeks later, he resurfaced to join an assembly in December, where he alleged that Ternium officials had threatened to retaliate against its opponents. Ternium did not respond directly to Diaz’s claim, but said “any association of Ternium with the potential hiring or involvement of armed groups is entirely baseless and absurd.”
Then the mood took a surprising turn. Diaz and his lawyer, Ricardo Lagunes, showed up at the January assembly to tell attendees there had been a breakthrough: It looked, they said, like a local court would soon let elections move forward to replace community leaders the activists believed were allied with Ternium. The pair were also hopeful that the court would release millions of pesos in rent Ternium owed to the community but had placed in escrow.
Some of the activists hung around after the meeting, sharing a few beers and a bite to eat with Diaz and Lagunes. “The good news left us with a good taste in our mouths,” one later told police.
Diaz and Lagunes headed toward Lagunes’ home in the neighboring Colima state. But they never made it — and have never been found.
A member of a major cartel would later tell police he had helped abduct the pair. The reason, he told police, was that the men were “f***ing with the mines.” He was murdered before he could stand trial.
Cartel Control
Ternium started life as an Italian company called Techint, founded in 1945 by an official who served in senior positions at state-run firms under the Fascist dictator Benito Mussolini.The firm relocated partly to Argentina over the coming years, and over time its operations in Latin America — particularly Mexico — became central to its business. The company secured millions of dollars in government contracts under López Obrador, and last year its work in Mexico contributed over half of its $18 billion in net sales.
Today, Ternium plays a crucial role in the supply chains vital to manufacturers relocating operations to Mexico for easier access to U.S. markets. The company plans to invest nearly $7 billion in Mexico, where U.S. automakers are spending heavily to develop electric vehicle plants. Tesla CEO Elon Musk visited Ternium’s factory in the northeastern Nuevo Leon state last year.
But operating in Mexico has come with a dark side. Criminal groups got mixed up in the mining sector after former President Felipe Calderón launched a war on cartels in 2006, prompting the narcos to diversify beyond the drug trade. Cartels robbed and extorted companies, started illegal mining operations, and sold illicit iron ore to legal companies.
In January, the head of the industry body for mining engineers, Luis Humberto Vázquez, bluntly told local media: “We’ve been forced to pay organized crime for protection.”
Most of the area where Ternium operates is dominated by the Jalisco Nueva Generación Cartel, which the U.S. Department of Justice has called “one of the five most dangerous transnational criminal organizations in the world.” The cartel has been under U.S. sanctions since 2015, and its leader, Nemesio “El Mencho” Oseguera Cervantes, has a $15 million bounty on his head....
....MUCH MORE
Elsewhere, November 23:Mexico: Armed Group Steals At Least 240 Tons Of Gold, Silver And Other Mining Concentrates
Meanwhile, in Columbia:
"A Drug Gang Stole 3 Tons of Gold in a Scam So Perfect It’s Still Going"