Mining and Displacement Put Mexican Millionaires on the Forbes List

The wealth of Mexican businessmen who top the millionaires list of Forbes Magazine is based “on the theft of the nation’s commons” says Francisco Lopez Barcenas, author of the book on mining legislation in Mexico, “Mineral or Life”.

The top three men on Mexico’s list (Carlos Slim, German Larrea and Alberto Bailleres) all own mining companies. Article 27 of the constitution states that natural resources may be licensed “but it must first always be distributed as national wealth [not to three people], to further development for Mexicans and to protect them,” says Barcenas, who adds that none of these stipulations are met in the case of mining. He also explains that it affects the rights of Mexicans to water and food since mining as an industrial activity receives preferential treatment.

Mexican Entrepreneurs: Exploitation and Speculation

Carlos Salinas de Gortari, president of Mexico from 1988 to 1994, delivered public concessions to [private] Mexican mining groups, mainly Grupo Mexico (Larrea), Peñoles (of Bailleres) and Grupo Frisco (Slim, the richest man in the world), ensuring them control of much of the [country’s] mining. This was done even before he reformed Article 27 of the Constitution and issued a new mining law.

“When you change the foreign investment law, which grants complete access of foreign capital to the mines, it ensures a part to Mexican businessmen,” says Barcenas. After granting the concessions, came the Mining Law that granted exploration and exploitation permits, and allowed concession periods of nearly a hundred years. That, says Barcenas, gave way to speculation.

“Almost every project, according to miners, takes no more than 15 years to complete. Why do they want a hundred? Because the longer they have, their price will be much higher in the stock market; the business is not only to exploit the mineral, it is speculating on our national heritage” stresses the Mixtec lawyer. The Mining Law also allows joint concessions, which are of greater value in the stock market.

It is widely thought that Canadian companies do most of the mining that occurs in Mexico, however Barcenas highlights that this is not entirely true. He explains that all mining projects can be found in the Vancouver Stock Exchange. “It can be Mexican or American capital that goes to Vancouver, and after relocating it enters the speculative economy and then from there it comes to Mexico, but as Canadian capital,” he says.

The production of metals soared in Mexico in 2010; by 2011, its value exceeded 20 billion dollars and came in third place among productive sectors of Mexico, according to the Mining Chamber of Mexico (Camimex).

Another factor that enables the easy high profit gains for these mining businessmen is that they only “pay between five and 111 pesos weekly for each hectare of surface area, no matter the type of mineral or amount mined,” says the lawyer and historian. Mexico is “the only country in Latin America where entrepreneurs pay no taxes on the production and export of ore,” he added. Colombia, even with a very similar mining law, charges 30% of the value of the mineral extracted.

An illuminating comparison is the case of the Mexican state-owned Petróleos Mexicanos. “Oil is another mineral that the state has reserved for itself to exploit. If you see the amount of taxes they pay, there is no comparison with that paid for other minerals,” says Lopez Barcenas. Mexico is now the largest silver producer in the world and tenth in gold, according to the Camimex, but while much of the Mexican state revenue comes from oil,  “not a dime” is contributed by other minerals, says Barcenas.

Easy Pickings for Mining in Mexico

The “Why Mexico?” section on the website of Revolution Resources – the company accused of illegally mining in the sacred territory of Wirikuta[i], indicates that in addition to pro-mining laws, Mexico is the most politically stable country in Latin America.

During the Salinas administration, the Foreign Trade Bank and the government of Canada conducted workshops on investment opportunities in Latin America, recalls Barcenas. They concluded that in addition to permissive laws in Mexico, the government was willing to change the minimum requirements in some of its [mining] laws since there were no NGOs that would fight for the environment.

Francisco Lopez Barcenas added that the assassination of mining opponents creates more favorable conditions of mining activity, noting “In [the case of] the San Xavier Mine, a mayor opposed to changing the land use law was murdered; in Chicomuselo, Chiapas, Mariano Abarca was killed; in San José del Progreso, Oaxaca, Bernardo Vazquez was killed.” The murders of Ismael Solorio and Manuelita Solis, in 2012 in Chihuahua, could also be related because they fought against the illegal drilling by the Cascabel Mining Services Company, a subsidiary of the Canadian mining company, Magsilver.

Damage and Resistance

In October 2012, Humberto Gutierrez, president of Camimex said that in Mexico there is enough gold and silver to exploit for another 500 years. The gold mined in the decade from 2000 to 2010 (419,000,097 kilograms) easily doubles the amount extracted during 300 years of Spanish colonization (191, 825 kilograms).

For Barcenas, the concern is not running out of ore but the way mining is done. “Everything is open mining, and to extract 500 years more would turn the country upside down,” he says.

Many communities who rent their lands are unaware of the harm that mining causes to the land. Current practices destroy almost all the surrounding area because the mineral is found in veins but dispersed in the ground and so requires turning up the earth’s surface to extract it.

The agrarian reform law now allows for ejidal lands to be rented out for 30 years leases–“the life of a whole generation,” says Barcenas, for very low prices. What is not made explicit is that when the mined land is returned back to the community it will often be practically useless.

For example, in Mezcala, due to protests the price for renting land was increased considerably, but the problem “is that people emigrated because they no longer had anything to do,” says Barcenas. Eventually the money ran out, and after a few years the community was completely destroyed. More than migration, says the lawyer, it was a clear case of forced displacement.

Mining activities also lead to a violation of the right to food. For the State to guarantee the right to food “planting and sowing should be a preferred activity, however, the Mining Law says that this activity [mining] takes preference above all other activities.”
It also affects the right to water. In the north, farm workers protest because the National Water Commission regulates their access to water, but does not limit use for mining.

Unlike in the late eighties, social protest has increased significantly toward mining, says Barcenas. In the past two years, resistance has increased dramatically in Mexico first, because of the environmental destruction caused by mining, and secondly because of the low prices paid by the companies for leasing land from the communities (about 1,000 pesos per hectare). More recently, indigenous peoples’ demands for cancelling mining concessions argue that they violate their right to consultation.
One form of protest “is the legal route, demanding that basic rights are met, that leases are annulled, and that concessions are canceled because they do not respect the right to consultation,” Barcenas notes. The other form is grassroots organization, with two national groups: the Mexican Network Against Mining and the National Assembly of Environmentally Affected Communities, and many regional organizations. The third form is public denouncements made by those directly affected, according to their ability, expresses the expert.

Reform Possibilities

Barcenas says that to make mining somewhat acceptable, it’s necessary to remove it’s preferential status. Concessions should be reduced to only the time needed for a project, companies should pay for the water they use and should pay fair prices for leasing a community’s land.

However, he notes that that is not the main concern. “Communities want to remain as communities and the people want to defend their right to territory,” he concludes.

Adazahira Chávez is an editor of desinformé, an “autonomous, global communications project” and sister organization to the Americas Program

Translation: Clayton Conn  Original in Spanish




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