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Thursday, October 23, 2014

Grupo México Profile of Mexico’s Mining Giant

Sonora Water Wars

Grupo México
Profile of Mexico’s Mining Giant

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Ferromex, a subsidiary of Grupo México, transports minerals and chemicals for 
Mexico's mining giant / Photo by Tom Barry


Lines of Business and Subsidiaries

Grupo México has three major lines of business: mining, transportation, and infrastructure. Related firms include: Mining: ASARCO (with mining operations in Arizona and Texas), Americas Mining Company, Southern Copper Company, Silver Bell Mining; Transportation: Ferromex, Ferrosur, Intermodal; and Infrastructure and Engineering: Perforadora México, México Compania Constructora, and Consutec.

Copper Giant

Grupo México is the world’s third largest copper company, and holds more copper reserves than any other company. In 2012 the company announced a $7 billion plan to expand its copper operations in Mexico, United States, and Peru. The company projects that it will produce 672,400 tons of copper and a record-breaking 21,500 tons of molybdenum in 2014. Its

Grupo México reports that Buenavista mining operation in Cananea holds more copper reserves than any single mine in the world, and is currently undergoing a $3.4 billion expansion. Its La Caridad operations constitute “the most complete mining-metallurgy complex in Mexico, producing more than 120,000 tons of copper annually as well as large quantities of molybdenum, gold, and silver. By 2017 Grupo México projects that the company will be producing 87% more copper – in large part due to the continuing expansion of Buenavista operations – for total of 1,175, 000 tons.

Copper Operations Across the Border

A holding company, Grupo México owns ASARCO, the Tucson-base mining, smelting, and refining corporation for copper and molybdenum. In the United States – through its ASARCO subsidiary – Grupo México’s operations include:

* 3 open-pit copper mines in Arizona (Mission, Ray, & Silver Bell).
* 1 copper smelter in Hayden, Arizona.
* 1 copper refinery and precious metals plant in Amarillo, Texas.

Unsafe Working Conditions

The Sonora River environmental disaster in August 2014 cemented Grupo México’s reputation as one of the country most irresponsible mining companies. Eight years previously, the death of 65 in February 2006 from methane leaks at the Pasta de Conchos coal mine in Coahuila, also not far from the U.S. border. Prior to the catastrophe, Grupo México miners had gone on strike 14 times, complaining each time about unsafe conditions and methane leaks. The 2006 mining disaster sparked national outrage, but the Mexican government never penalized the corporation.

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Sulfuric acid being transported by Ferromex for Grupo México / Photo by Tom Barry


Man Behind the Company

Grupo México is owned largely by one of Mexico’s richest men: the secretive Germán Larrea Mota-Velasco, whose fortune is estimated by Forbes to exceed 16 million pesos. Larrea, the president of the company’s board of directors, is also a principal in Grupo Televisa and Grupo Financiero Banamex.

On the Rails

Ferromex is Mexico’s dominant railway company (having bought Ferromex in 2005).  At five U.S.-Mexico border crossings, Ferromex connects with U.S. railway companies that financially partner with the company, including Texas Pacifico Transporation (owned by Grupo México) and Union Pacific (which owns part of Ferromex).

Mining on the Cheap

Grupo México’s union-busting and the highly favorable business environment in Mexico (low taxes and few enforced environmental and occupational health regulations) have contributed to the company’s position as a “low cost leader” which has the world’s “lowest cost copper production well below the marginal costs of production.” Its copper mining costs are one-third of Anglo-American and one-half of Freeport McMoRan.

___________________________________________________________
Sources: CNNExpansión, Aug. 27, 2014; “Grupo México to spend $7 billion on mines in the next five years,” Reuters, May 31, 2012; Grupo México at: http://www.gmexico.com/about/where.php#; “Gas Blast Traps 65 Mexican Miners,” Los Angeles Times, February 19, 2006; Southern Copper Company, “Resultados Cuatro Semestre y Año 2013,”  6 de febrero de 2014, at: http://www.southernperu.com/ESP/relinv/INFDLUltimasNotasPrensa/np140206.pdf; Grupo México, Presentation at the Global Metals and Mining Conference, May 11-13, 2010, at: http://www.gmexico.com/pdf/IR-GMexico-Investor-Presentation.pdf; Secretaría de Economía, “Principales Minas,” at: http://www.1economiasonora.gob.mx/principales-mina

Wednesday, October 8, 2014

“El Nuevo Sonora” Continues Sonora’s Hydraulic Traditions

Sonora Water Wars, Part 3

 “El Nuevo Sonora” Continues 
Sonora’s Hydraulic Traditions

October 08, 2014

(First published in New Mexico Mercury at: http://newmexicomercury.com/blog/comments/sonora_water_wars_part_3_el_nuevo_sonora_continues_sonoras_hydraulic_tradit#_ednref1 )

By Tom Barry




When you cross into Sonora from Arizona, you leave one hydraulic society and enter another. Both states are at risk. Their medium-term water futures are uncertain.

The water megaprojects – dams, reservoirs, aqueducts, and cement irrigation canals – that have made Sonoran Desert bloom with farms and cities are no longer sufficient. As temperatures rise, evaporation takes its toll, and droughts persist, there is an alarming shortfall -- between the water that people and business demand and the water that can be found.

Since the 1930s, Arizona and Sonora have confidently kept expanding their desert societies with the conviction that water would always follow money. Which proved to be true on both sides of the border. Federally funded dams and water-transfer projects transferred water from mountains and river valleys to some of the hottest and driest places in the transborder West, giving rise to such cities as Hermosillo, Guaymas, Ciudad Obregón, Tucson, Phoenix, and Las Vegas.

A mostly arid or semi-arid region that hosts North America’s four major deserts -- the Chihuahuan, Great Basin, Mojave, and Sonoran Desert – it is a transboundary region that has also been called the North American Southwest.[1]



When surface water proves insufficient, there’s always been groundwater to tap. First, diesel-fueled pumps penetrated deeper into the aquifers and bolsones, then as the federal governments in Mexico and the United States brought subsidized electricity to rural areas. Scores of well-drilling firms opened previously untapped reservoirs of fossil water.

Subsidized electricity prevailed throughout the transborder West. In Mexico, however, electricity costs for agribusiness have been especially negligible when calculating profit margins. Mexico’s agricultural sector benefits from the highest electricity subsidies for agriculture of all the Latin American and Caribbean nations.[2]

To drive nonstop on federal four-lane highways from northern Arizona through the nearly 400-mile length of Sonora takes about 12 hours. For those who might wonder (few people do) where the water comes from that makes the desert bloom with cities and monoculture agriculture, there are few readily discernible answers.

The water megaprojects that provide water to cities and farms are far away and out of sight. During the seven hours it takes to travel from the U.S.-Mexico border twin cities of Nogales to Sonora’s southern border with Sinaloa, you cross only dry rivers and arroyos.

In Sonora, like Arizona, water for the desert bloom comes from sparsely populated narrow river valleys and high mountains to the east and the north. Most residents of the desert cities never see the dams, reservoirs, and inter-basin aqueducts -- that have made their hydraulic societies possible. Ask someone in Phoenix or a tourist in the seaside resort of San Carlos on the Mar de Cortés where their water comes. Few know.

Hermosillo, the capital and most populous city of Sonora, is a good place for a field visit to consider the future of the transborder West. Situated a bit more than three hours south of Nogales, Hermosillo offers a clear but disturbing view of the past and the future of hydraulic societies in this transborder region.

Hermosillo also stands at the center of the most bitterly fought water wars of the desert West – a conflict that pits Hermosillo at the center of the state against the Yaquis and other water consumers of the Yaqui Valley in southern Sonora. Following the pattern of other regional water wars, the Yaqui water war is a complicated struggle involving urban and rural water users, the more and less powerful, and historically evolved special interests.

For those considering the water future of the transborder West, there are two must-see sites in Hermosillo. The first is the downtown headquarters of Sonora SI (Integrated System), which offers an up-beat scenario in which hydraulic megaprojects capture and redistribute scarce water resources.




Hermosillo Dam: First for Irrigation, Then Drinking, and Now Mostly Dry

Next, a short drive to the east takes you directly to Hermosillo’s very own water megaproject. Constructed in 1949 by the federal government, the Abelardo Rodríguez dam and reservoir were designed to capture Sonora River flows for use by Hermosillo.

At first, the federal government intended that all the water would be used by the rapidly expanding agribusinesses in the municipio (county) of Hermosillo -- which spans more than 14,885 sq. kilometers (5,745 sq. miles). A trip from Hermosillo’s center to the coastal town of Bahía Kino cuts through the vast coastal plains (known as the Costa de Hermosillo) of the Hermosillo municipio – a distance of 108 kilometers through arid scrublands converted to agribusiness by way of a labyrinth of irrigation canals and ditches.

In the 1980s, as the city of Hermosillo grew desperate for drinking water, the National Water Commission shifted the reservoir water from irrigation to domestic water consumption. But the onset of the drought in 1996-97 caused the reservoir to completely dry up, leaving the city once again without a dependable source of water.




Except in cases of heavy monsoon rains, the reservoir is usually a dusty bowl. When the city in 1998 gave up on the reservoir as a dependable source of drinking water, the old plans to transfer water to the city from the Yaqui River were resurrected. Yet it wasn’t until Sonora SI built the aqueduct in 2011-2012 that water from the Yaqui River began flowing to Hermosillo.

Surging fountains that rise outside Sonora SI building tell a story of a future made possible by hydraulic technology and infrastructure, with plenty of water for everyone – expanding desert cities, new agroexport industries, and a booming mining sector.

Can a new network of hydraulic megaprojects – including Sonora SI’s highly controversial Novillo-Hermosillo aqueduct -- keep Hermosillo growing and solve the state’s multitude of water crises and water wars? Governor Guillermo Padrés Elías, who launched Sonora SI in 2010 as part of his “El Nuevo Sonora” political platform, believes new dams and aqueducts will do the trick. The Yaquis and the Movimiento Ciudadano para el Agua in the Yaqui Valley think differently, as do the Guajirío indigenous settlements that will be displaced by the dam that Sonora SI is constructing across the Mayo River in southeastern Sonora.


[1] William deBuys, A Great Aridness, Oxford University Press, 2011.

[2] Banco Mundial, Los Recursos Naturales en América Latina y el Caribe, 2010, at: http://siteresources.worldbank.org/INTLAC/Resources/257803-1284336216058/Reporte.pdf



Monday, September 15, 2014

Sonora Revives its Hydraulic Society, Sparking Water Wars

Got a Water Crisis? Get More Hydraulics


How the Mexican border state of Sonora is rushing forward with more water-management projects in response to escalating water crisis. A series of articles on water crisis and water wars in the border state of Sonora.

Part Two: Sonora Revives Its Hydraulic Society














Hermosillo / Tom Barry

A water war is getting in the way of traffic and free trade in 
the Mexican border state of Sonora. Trucks and cars come to a standstill about 350 miles south of the Arizona-Sonora border.  Yaquis have mounted an intermittent blockade across international highway #15.

Wielding sticks and waving the Yaqui flag, the indigenous communities of the Yaqui river delta have since 2011 been demanding that the government stop taking water out of the Yaqui River. Traffic backs up in both directions from the Yaqui town of Vicam for as many as 12 kilometers before the blockade of the Nogales-Mazatlan toll road is temporarily lifted.

As the state government has stepped up its attempt to co-opt, corrupt, and repress the Yaquis, including ordering the arrest of its leaders, the Yaquis have become more militant and determined. The water war in northwestern Mexico is gaining adherents across Mexico and among environmentalists and human rights advocates in the United States.

It’s a water war that Governor Guillermo Padrés Elías sparked when in early 2010 he announced an ambitious plan to meet Sonora’s alarming water crisis with a network of hydraulic infrastructure projects, including aqueducts and dams.



Months after he took office in late 2009, Governor Padrés, a member of a prominent ranching family and leader of the National Action Party (PAN), committed the state government to construct a new phalanx of water megaprojects through an upbeat infrastructure program called Sonora SI (Integral System of Sonora). The government promoted the new water megaproject program as a revival of Sonora’s era (1938-1990) of building major waterworks -- addressing the arid state’s water limitations by damming rivers, transferring water via aqueducts, and subsidizing the intensive pumping of shrinking groundwater supplies.

From the governor’s first announcement of Sonora SI, it was never clear how the indebted state government would pay for the some two-dozen new megaprojects. At the same time, however, during his first two years in office Governor Pádres could count on the strong backing of President Felipe Calderón, a fellow PAN leader.

The Yaqui water war comes at a time when the state’s future is jeopardized by the expanding water crises in rural and urban Sonora. One view – that of Governor Padrés and Sonora SI – is that Sonora has enough water for all Sonorenses. All that is needed is a new network of waterworks to transfer water from water-rich areas to water-poor ones.

Others, however, already suffering from the ravages of climate change and diminishing river flows and depleted aquifers insist that Sonora’s traditional patterns of managing water are fundamentally and dangerously unsustainable. For the most part, however, the Yaqui water war highlights how increasingly different geographic, economic, and social sectors are determined to hold on to the water they have and to fight for more.

The immediate point of contention of the Yaqui water war is a new 155-kilometer Novillo-Hermosillo aqueduct, officially known as the Independencia aqueduct. For the past three years, the west-east aqueduct has been transferring as much as 75,000 Mm3 of river water from the middle Yaqui River basin in higher elevations of eastern Sonora to the state capital of Hermosillo, which lies in the heart of the Sonoran Desert.

Although the fight fundamentally revolves around indigenous rights and historic distribution of Yaqui River water, this escalating conflict underscores the unsustainability of tradition of hydraulic megaprojects in Sonora. Another contentious Sonora SI project is the planned Pilares dam on the Mayo River to the west of the Yaqui River – which constitutes an existential threat to the deeply impoverished Guajiríos indigenous communities in this remote region.

Instead of evaluating the flaws in the state’s reliance on hydraulic projects to capture surface and groundwater, Sonora SI, Governor Padrés, together with the city of Hermosillo, are committed to a new package of controversial waterworks – ones that transfer and further deplete water supplies rather than conserving water and altering water consumption patterns.



Desert Illusions

Since the early 1940s Sonora’s demographic and agricultural boom has been largely the product of hydraulic manipulation. Despite its aridness, Sonora is Mexico’s second largest agricultural producer -- virtually all the result of irrigation.

No other state in Mexico has been so dramatically transformed by the federal government’s network of dams, aqueducts, and irrigation canals. Agriculture accounts for 92% of water consumption in Sonora, and no other Mexican state is intensively irrigated as Sonora. Virtually all this agriculture occurs in the arid western plains and along the coast, where average annual rainfall is 8-15 inches, depending on the area.

Sonora is a classically “hydraulic society.” The term hydraulic society was coined by a German scholar who found that some of the earliest civilizations were based economically, politically, and theologically on water management.[i]

In ancient hydraulic societies -- such as the civilizations in China and those that developed between the Tigris and Euphrates rivers in the aridlands of Mesopotamia – the central authorities were the water masters. Their power stemmed fundamentally from their role in managing sophisticated irrigation systems and water-supply systems. If their subjects became thirsty, their authority and power would falter.

Closer to home and more immediate is California, which U.S. scholar Donald Worster and others categorize as a hydraulic society.[ii] In his paper “Damming of Sonora,” University of Oklahoma scholar Sterling Evans wrote that Worster described the U.S. West as a “region characterized by ‘a social order founded on the intensive management of water,’ ‘communal reorganization,’ “new patterns of human interaction,’ and ‘new forms of discipline and authority.’”[iii]

Any discussion of hydraulic societies in the transborder West must note the seminal investigation and analysis of Marc Reisner in Cadillac Desert: The American West and its Disappearing Water. In his 1986 book, Reisner wrote: “Millions settled in regions where nature, left alone, would have countenanced thousands at best; great valleys and hemispherical basins metamorphosed from desert blond to semitropic green.”



Two views of hydraulic Sonora. Top is southeast of Hermosillo, where water sources for small farmers/ranchers have dried up, while at same time miles of vineyards producing table grapes for export are spreading across desert north of Hermosillo / Tom Barry

You see the same miracle of hydraulic transformation in Sonora. Traveling south from the border at Nogales through the Sonoran Desert and then passing through the Yaqui and Mayo river deltas of Sonora – a nearly 7-hour trip – the fruits of Sonora’s hydraulic society are on display.

If one were drive the nearly 400 miles from the border at Nogales to Sonora’s border with Sinaloa, you would cross three river beds (Sonora River, Yaqui River, Mayo River) that for the past several decades usually run dry as they head south and west toward the Gulf of California. Temperatures rise to 120 degrees or higher in the summer. Cactus, mesquite, creosote, and thorn trees define the natural landscape -- except for the vineyards and farmlands that bloom for miles around Hermosillo, Ciudad Obregón, and Navajoa.

How is it possible that Sonora has long been one of the top three agricultural states in Mexico? Even most Sonorenses don’t fully understand where all the water comes from for the state’s cities, industries, and agribusiness. That’s because most of the state’s hydraulic megaprojects lie in the isolated valleys of sparsely populated eastern Sonora, a region known as La Serrana (mountainous area).

Of the state’s five major dams and reservoirs, four are to the east of Sonora’s main demographic and farming belt along Highway 15 -- three on the Yaqui River and one on the Mayo River, each of which feed major irrigation canals leaving the rivers dry as they enter the former coastal deltas.

But the hydraulics of Sonora have been breaking down over the past two decades. Today, dams stand before empty reservoirs, hydroelectric plants stand abandoned, and government-subsidized irrigation projects have left vast expanses of coastal Sonora crusted with salt.

As the Sonoran government -- with more than two-thirds financing from the federal government -- continues with its water megaproject program, there is little reflection of the failures and consequences of Sonora’s “hydraulic society.” Instead most of those involved in the water wars in Sonora -- with the exception of small circles of environmentalists and academics -- look to inter-state and intra-state transfers of water.

Both sides of the Yaqui water war, for example, support a federal plan for an aqueduct that would bring water from the Nayarit and southern Sinaloa (two water-rich states along the Pacific coast) to Sonora.




[i] Karl Wittfogel, Oriental Despotism: A Comparative Study of Total Power (New Haven: Yale University Press, 1957, as cited in Sterling Evans, “Damming Sonora: An Environmental and Transnational History of Water, Agriculture, and Society in Northwestern Mexico,” Discussion paper, March 25, 2011, at: http://whae.uga.edu/evans.pdf


[ii] Donald Worster, “Hydraulic Society in California,” in Under Western Skies: Nature and History in the American West (New York: Oxford University Press, 1992).

[iii] Sterling Evans, “Damming Sonora: An Environmental and Transnational History of Water, Agriculture, and Society in Northwestern Mexico,” Discussion paper, March 25, 2011, at: http://whae.uga.edu/evans.pdf

Wednesday, September 10, 2014

Introduction to the Yaqui Water War

Got a Water Crisis? Get More Hydraulics

How the Mexican border state of Sonora is rushing forward with more water-management projects in response to escalating water crisis.



Part One: Introduction to the Yaqui Water War

The U.S. West was won by a strategy to capture the natural flow of rivers cutting through the deserts. A vast array of water megaprojects reshaped the West’s landscape and opened these aridlands for population growth and agricultural development.

Wherever the U.S. Bureau of Reclamation found rivers running free, the engineering agency constructed dams, reservoirs, and aqueducts. The agricultural empires and booming cities like Los Angeles, Phoenix, and Las Vegas of the arid West are the offspring of these massive waterworks.

In Mexico, the development of the country’s northern drylands and deserts mirrored the U.S. model of hydraulic manipulation. The post-revolutionary Mexican government launched a modernization plan in the 1930s that dammed region’s rivers, redistributed land into irrigation districts, and transferred water to previously uncultivated plains and deltas.

The problems that stem from hydraulic megaprojects are felt throughout the transborder West – a region that spans North America’s four major deserts (Great Basin, Mohave, Chihuahuan, and Sonoran) and adjacent aridlands. It is a region that William duBuys, author of A Great Aridness, has described as the “North American Southwest.”

The unsustainability of the water-use patterns of these aridlands is reaching crisis proportions as climate change – with its higher temperatures, severe weather events, and prolonged droughts – advances.

On both sides of the international border, communities and governments are confronting the limits of the region’s surface water and groundwater reserves. Social clashes are erupting as water runs out or is being redistributed.

In the heart of the Sonoran Desert, a bitter water war has been raging for the past four years, dividing the state of Sonora into rival factions.

The Yaqui water war erupted when the state government pushed through the construction of a 155-kilometer aqueduct that transfers water from the Yaqui River west to Hermosillo, the state’s capital and most populous city. The two main protagonists are the state’s executive branch and the Yaqui indigenous communities of the Yaqui River delta. Standing behind them are two rival coalitions of citizens, political parties, municipal governments, agribusiness sectors, and irrigation districts.

Similar tensions are emerging as Governor Guillermo Padrés Elías proceeds with plans for an array of dams, aqueducts, and water treatment and salinization plants – all part of his Sonora SI (Sonora Integrated System) waterworks program.

With federal financing, the governor’s office is, for example, planning the construction of a major new dam across the Mayo River in southeastern Sonora. The resulting reservoir will displace many Guajiríos and threaten the very existence of the diminishing group of indigenous people.

The Yaqui water war is raising concerns about the sustainability of societies that are dependent on dams, aqueducts, and giant irrigation canals. At the same time, the conflict also raises the question: What other options exist to meet rising water demands besides the construction of massive new waterworks that transfer water from water-rich regions to water-poor ones.

Can the intensifying water crises of the transborder West be mitigated or resolved by a new wave of water megaprojects? What are the environmental and social limits of waterworks that effect massive transfers of surface water and groundwater?

The divisiveness and militancy of the Yaqui water war surpass those of other water conflicts in the transborder region. Breaking out in early 2010, Yaqui water war underscores the multitude of social, political, and economic tensions that emerge when traditional water distribution patterns are altered.

As the Yaqui water war evolves, there will surely be lessons for all those living in the increasingly hot and dry transborder West.






Photos by Tom Barry: 1) Yaquis gather for meeting to block Highway 15 in protest against Novillo-Hermosillo aqueduct. 2) Yaquis block Highway 15 at Vicam  in continuing protest against aqueduct. 3) Yaqui people stand in forefront of water war that is dividing Sonora. 4) Yaqui governors meet to discuss "No al Novillo" strategies.