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Mexico's CFE accused as rescue continues at Coahuila coal mine

Bnamericas Published: Wednesday, August 17, 2022
Mexico's CFE accused as rescue continues at Coahuila coal mine

Accusations are flying over contracts signed by Mexico's state-owned utility CFE to expand the company’s coal purchasing program in recent years, as rescue efforts continue for 10 miners trapped since August 3.

More water flooded into the Pinabete mine on Sunday in Sabinas, Coahuila state, at the heart of the Sabinas coal basin, further hindering rescue work and triggering accusations towards CFE and its CEO Manuel Bartlett.

Flooding has been associated with the Pinabete collapse, with water coming intermittently from the neighboring Conchas Norte mine, which closed in 1996, claiming at the time it could not afford to continue pumping out the mine.

National civil protection agency coordinator Laura Velázquez announced on Tuesday that the foreign relations ministry had contacted two specialty firms, one in the US and a German company to discuss how they might help with the rescue.

Meanwhile, an investigation by news outlet Animal Político found that CFE reviewed and declared safe Minera El Pinabete, which is the owner of the collapsed mine, paying the company 75mn pesos (US$1.5mn) in direct awards to purchase coal from 2020 and running through 2024.

This follows CFE's July 2020 relaunch of its coal purchasing program, saying it sought to buy 2Mt of coal over the next 18 months. More recently, in June, CFE issued 50 tenders to buy coal in the Sabinas coal belt.

CFE has raised the importance of coal to combat intermittence from renewable energy sources and enhance energy independence, considering the surge in prices of imported natural gas earlier this year.

The new push was announced along with new mechanisms to ensure the support of smaller miners and guarantee high-quality coal production.

But old problems continued to surface, with reports of the company buying coal adulterated with soil and signing contracts with prestanombres, or straw men, often low-level employees, whose names are used to shield mines’ actual stakeholders from any eventual wrongdoing or accident.

Coahuila governor Miguel Ángel Riquelme Solís said on Monday that it had called for the gradual expansion of coal purchasing from small producers, but his administration stepped aside when it saw how the program was unfolding rather than create a conflict with the CFE, as reported by local media.

A member of the opposition PRI party, Riquelme added that he blamed Bartlett for what he saw as hatching an expansion that allowed the proliferation of small operations that had little oversight either for quality of production or for safety and regulatory compliance.

This, he said had also fomented coyotaje, or sales of adulterated coal, often mixed with soil.

Animal Político also reported that the owner of the collapsed mine in the contract with CFE is someone named Cristian Solís Arriaga, reported by a local miner advocacy group as “a young man of 26 or 27 years who has no property, no income,” although the trapped miners are listed as his employees.

The outlet also reported that Pinabete did not have a signed agreement with CFE until this push, launched under Bartlett.

Also, Pinabete appears to have avoided the delivery of 12 official documents as part of the contracting process required by CFE to become a coal supplier, including verifications of formal worker status, compliance with current regulations and tax obligations, among others.

GOVT RESPONSE

Mexican President Andrés Manuel López Obrador responded to accusations against CFE Tuesday, saying steel companies were driving the problem, with "clear acts of collusion" with local officials. Coahuila is one of the handful of states not yet controlled by the president’s Morena party.

Speaking at a press conference, the president added that state elections for Coahuila are set for 2023 and, looking at the opposition’s claims against CFE, he said, “The buzzards are already circling” and looking to make political hay over the mine collapse.

Asked about the lack of mine inspections in the region, López Obrador said, “The attorney general is doing the investigation.”

He also countered claims that the Pinabete mine was only licensed to sell coal to CFE during his term, saying it first won a concession under the Vicente Fox administration.

“Strictly speaking, the concession should not have been granted, because how can a concession be granted next to a canceled, flooded mine with a huge area,” He added.

National mining union leader Napoleón Gómez Urrutia also broke the relative silence of the last two weeks to make a statement on Monday decrying large companies. He also called for sectoral reform to fix the problem.

“What happens is that the inspectors arrive, they make a kind of social tourism visit with managers and supervisors, who take them out to eat and write desktop reports, not technical visits, and they play down the risks, said Gómez. “This is what we have to avoid.”

“Many of these … aren't even proper coal mines,” he said, adding more than 5,000 workers are estimated to be working in unsafe conditions, “all due to the greed of business leaders.”

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