Security remains a pending issue for Mexico's mining industry

Dealing with high levels of insecurity will remain one of the biggest challenges for the mining industry in Mexico this year, where although steps carried out by the government to combat crime have been received positively, the expected results have not been seen, according to various stakeholders.

"I think there is still a lot to be done regarding the issue of security in the country in general, even more in terms of mining security," Reyna Silver's exploration VP Ariel Navarro told BNamericas, although he described the intentions of federal and local governments as positive. "Hopefully there will be a prompt response or better than there has been so far," Navarro added.

Security is a major risk affecting mining companies in Mexico, as drug cartels vie for control in key mining states such as Sonora, Zacatecas, Chihuahua, Durango and Guerrero. On Thursday, in the northern state of Sinaloa, a new wave of violence erupted following the arrest of Ovidio Guzmán López, son of notorious narco kingpin "El Chapo" Guzmán, leaving at least 29 people dead.

The challenges have intensified in recent years in the sector due to the diversification of organized crime towards other lucrative activities after the collapse of income from drug trafficking.

More than two years after the government announced in October 2020 the creation of a mining police force, through the federal protection service (SPF) – a decentralized body of the citizen security and protection ministry – and the deployment of the first 120 specialized troops at Fresnillo’s La Herradura precious metals mine in Sonora, insecurity continues to be one of the main concerns of the sector.

The then commissioner of the SPF, Manuel Espino, announced that new courses would begin "soon" to cover the needs of the industry in all regions of the country, but this service implies costs for mining companies and in practice it was not rolled out as touted.

"Many efforts have been made, a mining police force was formed but it has not produced the desired results and there are armed people in mines. Putting armed people against armed people is something we have opposed," Luis Humberto Vázquez, president of the Mexican association of mining engineers, metallurgists and geologists (AIMMGM), told BNamericas in a recent interview.

Karen Flores, executive director of Mexico’s chamber of mines (Camimex), said insecurity is worse in mining regions. "We are even more susceptible to illegal acts because we’re located in very remote regions and acts of insecurity have been registered, such as theft from mines, of minerals, which significantly impacts both the certainty of the market and the integrity of the collaborators in the mining sector," she told BNamericas.

Flores said Camimex has met with the defense ministry "to better develop the mining police and help address this problem."

In early December, Zacatecas state experienced a complex episode of violence that included road blockades after the assassination of the head of the national guard.

The president of Camimex, Jaime Gutiérrez, said at the presentation of its annual sustainability report that such events are common in the country, and that insecurity was "an additional mining tax" with associated costs of between 10-20% of the finished product due to theft.

In its latest annual report, Mexico ranked 34th in the investment attraction index of Canada’s Fraser Institute, but fell to 76th position in terms of security.

PILOT PLAN

Currently, the mining police department of the northern state of Chihuahua is starting formal operations, after the first 30 officers were trained in mid-November with the support of the Chihuahua mining cluster Clumin.

The objective is to provide support to companies in matters such as the transport of minerals, according to the state government.

"At the state level we have a great example in Chihuahua where it was recently announced that they were going to create the first state mining police force. It will be a pilot but we consider it very positive for the sector," Camimex’s board stated.

"We hope that this mining police force [in Chihuahua] will not take long to materialize, which for me is a very good initiative ... and we also hope that other states copy this initiative, especially where there is a lot of mining and unfortunately a lot of insecurity, because practically all the states are suffering from insecurity,” said Reyna Silver’s Navarro, whose company operates in Sonora and Chihuahua states.

"The normal police have not functioned properly since the police forces have been overwhelmed by organized crime and by corruption in general that we experience throughout the country, although we cannot downplay the government's efforts to remedy the situation," he added.

Mexico is the world's top silver producer and a leading gold and copper producer.