Part One: Mexico's Mining Boom
Tom Barry
“Water’s precious. Sometimes may be more precious than gold.”
- Howard, vagabond U.S. prospector in B. Traven’s
The Treasure of the Sierra Madre (1927)
Grupo Mexico's La Caridad copper mine in northern Sonora.
The treasure of the Sierra Madre still beckons. But the miners are no longer coming to these rugged mountain ranges of northern Mexico with picks and shovels. Nor are searching for veins of precious metals on mules and horses, animated only by their dreams, delusions, and desperation.
“I think I’ll go to sleep and dream about piles of gold getting bigger and bigger and bigger,” remarked Fred C. Dobbs (played by Humphrey Bogart in the film version of The Treasure of the Sierra Madre.) Dreams of making it rich by mining the treasures of Mexico are coming true, as never before.
The Mexican government is making modern mining dreams come true. Nonexistent or unenforced regulations –whether regarding occupational safety, environmental degradation, water extraction, and control of hazardous wastes – make Mexico one of the world’s most profitable countries for the mining industry. Government agencies – both federal and state – that have authority over the mining industry serve as mining boosters rather than as regulators.
Like the control of Mexico’s water resources (both surface and groundwater), the federal government has primary authority over the country’s mineral resources. State governments, notably Chihuahua, Durango, and Sonora, have their own initiatives to promote and facilitate mining in their territories.
Today’s mining ventures differ substantially in scope than the prospecting ventures depicted by B. Traven in The Treasure of the Sierra Madre. Most are multimillion-dollar operations, and some like the Cananea and Nacozari de García copper mines of Grupo México are multi-billion dollar ventures.
But many similarities remain. Then as now, most mines – from the smallest artisanal ventures to the monstrously large open-pit mines that consume entire landscapes – are found in remote mountainous regions far from major population centers and transportation routes.
The new rash of gold, silver, zinc, and copper mines are tearing up canyons, mountain slopes, and forests out of sight of most Mexicans. Even though Sonora and Chihuahua lead Mexico in the number of new mining operations, few Chihuahuenses or Sonorenses have ever been close to a mine.
Most mines are hidden behind mountain ranges, tucked into the folds of remote bajadas, or occupy gravel terraces by the sides of rivers flowing through sparsely inhabited canyons and valleys. And those communities whose land and water that the mining industry consumes in its search for treasure are generally poor, often indigenous, and utterly lacking political power or influence.
Yet as Joaquin Rojo de la Vega, president of the Sonora Mining Association (AMSAC) observed in a speech to mining executives and government officials: “I can assure those that haven’t seen it that for Sonora mining is the principal industry.”
Mexico’s Mining Boom
A frenetic search for gold, silver, and copper, among other minerals, is occurring across the U.S.-Mexico border in the country’s arid northwest. It’s an explosion of mineral extraction and mineral exploration with no modern precedent – but eerily echoes the march of Spanish expeditions into northern and northwestern Mexico in their search of precious metals.
Foreign mining firms, mostly Canadian, are leading the charge to exploit Mexico’s mineral wealth. Most of the new mineral exploration and extraction operations are occurring in northern Mexico, but the mining boom has spread across the country.
Transnational mining companies (both Mexico-based and foreign-based) are scouring the Sierra Madres (Occidental and Oriental) for the gold and silver that lured the Spanish to northern Mexico in 16th and 17th centuries. But today Mexico is also a major producer of copper, zinc, molybdenum, among other minerals and metals.
These companies – including major foreign firms such as Alamos Gold, GoldCorp, MagSilver, Agnico Eagle, and Newmont Mining -- along with Mexico-owned giants such as Grupo México, Industrías Peñoles, and Grupo Frisco – have exploration permits for more than 15% of Mexico’s territory. The government’s ministry of economy is luring new investment with an array of subsidies, financing, training, and technical assistance – and by reminding mining companies that 70% of the country remains unexplored for its mineral treasures.
Mining and mineral exploration are booming throughout Mexico – more than doubling between 2007 and 2012. Nowhere is Mexico’s mining boom so evident and deeply felt as in northwestern Mexico. In 2001-2012, production by mineral and metallurgy industries increased 773%. Recent downturns in commodity prices, however, have slowed the new investment and production.
In the arid northern states cut through north to south by the Sierra Madre Occidental and the Sierra Madre Oriental, as much as 30% of the territory in northern border states such as Sonora and Chihuahua is under mining exploration or extraction contracts. Mexico’s leading mining states are Sonora, Zacatecas, Chihuahua, Durango, and San Luis Potosí. In 2012 these five states in Mexico’s mountainous north accounted for 71% of total minerals production.
The mining boom is spreading down from the border to Mexico’s south. The largely indigenous states of Guerrero and Chiapas have experienced the most rapid expansion of mining operations, and rank, respectively, as Mexico’s seventh and tenth most important mining states.
During the Porfiriato (1876-1910), the Mexican government opened the country to foreign mining, agricultural, and commercial investors, giving these U.S. investors a free hand in exploiting Mexico’s human and natural resources. The repression by Arizona Rangers and Mexican Rurales of a 1906 mineworkers’ attempt to organize helped sparked militant opposition to the Porfírio Díaz regime, prefiguring the 1910-1917 Mexican Revolution. Today, the famous “Cárcel de Cananea” (Jail of Cananea), where strikers were imprisoned, is a national historic monument and “Museum of the Workers’ Struggles.”
The rush of foreign mining companies into Mexico and the government’s open-door policy for all mining investment recalls the greed of the pre-revolutionary regime. Yet the largest mining firms in Mexico are Mexico-based companies owned by the country’s leading plutocrats. Whether foreign-owned or Mexico-based, the mining industries share a disregard for the country’s scarce water resources and for the environment. Communities in mining regions are regarded as obstacles to making mining dreams come trues, and its leaders and activists are among the nation’s many victims of human rights abuses.
Protesting displacement and environmental destruction by Los Alamos Gold / El Universal
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Facts
Mexico’s Mining Boom
• Mexico is currently the world’s 14th largest minerals exporting nation, and the 4th largest in Latin America.
• Mexico is among the world’s top ten producers of 16 minerals.
• World’s leading silver producer; second largest for bismuth and fluorite; third for celestite and wollastonite; fifth for cadmium, lead diatomite; and molybdenum; seventh for gold, zinc, and gypsum; eighth for barite and graffite; ninth for salt, and tenth for copper.
• Between 2010 and 2012, non-oil extraction increased at an annual rate of 11.8% -- one of the most dynamic sectors in the national economy.
• Mexico's Mining Development Trust (FIFOMI) in its bid to attract more mining operations notes that 30% of the country has been explored for mineral, leaving 70% available for exploration and mineral extraction.
• Mining sector (including processing minerals) constituted 4.9% of domestic gross product (PIB) in 2012.
• $30.8 billion was invested in Mexico’s mining sector in 2001-2012, with a record-breaking $8 billion in 2012 alone.
• Secretary of Economy projects that $35 billion will be invested in mining sector during the sexenio of President Peña Nieto.
• Mining is Mexico’s fourth largest sources of foreign exchange, reaching $22.7 billion in 2012. Ranking above mining as a source of dollars are the automobile industry, electronics and electricity industries, and oil industry.
• Employment in mining increased at an average annual rate of 1.3% in 2001-2012, higher than the national average for total employment growth by nearly 1% below the industry’s increase in production.
• Mineral and metallurgical exports increased more than 800% from 2001 to 2012.
• The federal government issued 28,807 minerals exploration and mining permits in 2001-2012 -- covering 61.8 million hectares. The ministry of economy issued 198 permits each for 50,000 or more hectares to the transnational mining companies, most of which received multiple permits.
Sources: “Acuerdo por el que se aprueba el Programa de Desarrollo Minero 2013-2018,” Diario Oficial, May 9, 2014; “Mining Industry in Mexico: A Golden Opportunity,” Negocios ProMéxico, February 2014; Anuario Estadístico de la Minería Mexicana, Edición 2013, Coordinación General de Minería, Secretaria de Economía, at: http://www.economia.gob.mx/files/comunidad_negocios/industria_comercio/informacionSectorial/minero/anuario_mineria_mexicana_2012_ed2013.pdf
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News from Mexico about organized crime, widespread violence, and police and military impunity has overshadowed other trends that are roiling the stability of the northern states.
Among the most disturbing trends that are shaking the social and political stability in Mexico’s north are the following four:
1) Escalating crisis over access to scarce water supplies,
2) Increasing concentration of rural land among a relatively few landholders, mirroring pre-revolutionary land tenure patterns,
3) Rush by the transnational mining industry to extract Mexico’s mineral reserves without regard to adverse impacts on the environment and rural communities and without facing the counterweight of an organized workforce, and
4) Disproportional impact on indigenous communities from the mountains and barrancas of the Sierra Madre Occidental to the rainforests of southern Mexico.
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