Case Explained: Cartels: Precious metals boom catches the attention of organized crime in Mexico | International – Legal Perspective

The kidnapping of 10 miners in Sinaloa in January has brought to light yet another facet of the security crisis that has plagued Mexico’s mining sector for years, fueled by the surge in silver and gold prices. Criminal organizations, which exert territorial control in some of the most resource-rich areas, extort domestic and foreign companies, driving up production costs and security budgets. Companies are forced to pay protection money or to directly hire suppliers linked to their extortionists. In Mexico, where this type of crime is on the rise and impacting the national economy, the murder of a group of miners is both outrageous and raises questions about when the Mexican government’s strategy will effectively address this problem. Meanwhile, in the United States — where these groups are considered terrorist organizations — the risk to companies that pay to operate comes from legal channels.

For John Price, an advisor to companies entering Latin America — including mining firms — a combination of market factors and criminality played a decisive role in the kidnapping of the workers from the Canadian company Vizsla Silver. “Silver prices are at a record high, and at times like these, the activity of informal and illegal miners increases significantly,” says the managing director of the firm Americas Market Intelligence. “Everyone gets involved in the mining business, even if they aren’t miners, including small or large organized crime groups,” he adds. The price of silver has increased by more than 120% in the last six months, while the price of gold has risen by 50%, as investors seek safe havens due to the financial and commercial uncertainty that has affected other, higher-risk assets.

This boom in the business means that both formally employed miners — like those at Viszla Silver — and their informal colleagues end up exposed to cartel violence. “The reality is that for many miners, not only Canadians but also Mexicans, it is very difficult, if you have a large-scale mine or are working in silver or gold, to avoid interference from organized crime, which is heavily involved in mining,” Price adds.

By early February, the bodies of at least five of the kidnapped workers had been identified in clandestine graves near El Verde, a town about 40 kilometers from where they disappeared. In a statement released Thursday, Vizsla Silver confirmed that the other five people remain missing and that they are in contact with the victims’ families to provide financial and practical support. “The safety and security of Vizsla Silver’s employees and contractors remains a top priority. Since inception Vizsla Silver has made significant investments in security and risk management,” it read.

“The Company wishes to advise that it works with experienced, internationally recognized security advisors,” it added, emphasizing that they maintain a zero-tolerance policy against bribery, corruption, and extortion. The statement explained that, although physical operations on the project are suspended, engineering work continues remotely. The company has not yet specified the security situation at the camp where its employees were kidnapped.

The Donald Trump administration has increased pressure to cut off the flow of income to organized crime, designating eight cartels and criminal groups, including the Sinaloa Cartel and the Jalisco New Generation Cartel, as terrorist organizations in February 2025. Based on this change, companies that give in to extortion could face criminal investigations, accused of money laundering or financing criminal activity. This has already resulted in the freezing of bank accounts belonging to some companies, as well as three Mexican financial institutions being intervened in cases related to money laundering.

The Mexican government has stated that the kidnapped miners were mistaken for rivals by Los Chapitos, one of the criminal groups operating in the area, although it has been reported that they were abducted inside the mining camp. Furthermore, the mine had to suspend operations less than a year ago due to security concerns. The kidnapping also puts pressure on the security strategy of Claudia Sheinbaum’s administration, which took office in late 2024, just as the civil war within the Sinaloa Cartel erupted between the sons of Joaquín “El Chapo” Guzmán and the successors of Ismael “El Mayo” Zambada.

This is not the only recent case. Last June, three miners were killed in the community of La Capilla del Taxte, in the municipality of Concordia, and in February 2025, the San Rafael mine in the municipality of Cosalá, Sinaloa, also owned by a Canadian company, halted operations due to insecurity. Local media reported that since 2017, six mines — four in Concordia and two in Cosalá — have had to temporarily suspend operations due to violence. Nor is this problem limited to the state of Sinaloa. The Mexican Mining Chamber, in its latest report, states that 97% of mining companies have suffered some type of crime, the most common being petty theft and extortion, concentrated in the states of Durango, Zacatecas, and Guanajuato.

Also noteworthy is the Canadian company Telson Mining, which in 2019 suspended operations at the Campo Colorado mine in Arcelia, Guerrero, due to extortion by the Familia Michoacana cartel. This situation is reflected in documents from the National Secretariat leaked by the Guacamaya hacking collective, which indicate that, at least since 2015, “Johnny Hurtado Olascoava, alias ‘El Pez,’ is the top leader of the criminal organization and responsible for kidnappings and extortion of mining companies and other businesses in the region.” In 2016, six workers from the Beneficiadora de Minerales Temixco mine, also in Arcelia, were kidnapped.

“A very common way of collaborating with organized crime — and this happens throughout Mexico — is that these groups know they can’t directly extort mining companies,” adds the consultant Price. Companies face the dilemma of masking their payments due to pressure from Washington to cut funding to “narco-terrorism,” as well as the need to comply with other laws in the U.S., where many are financed through the stock market. “That’s why they buy different companies that supply the mining companies: the transporters who take the workers from the camps where they sleep, the food suppliers, the transportation companies that take the ore to the processor…” In this way, he asserts, the companies can mitigate the threats from organized crime without directly violating regulations or their own corporate governance.

In August 2024, Stratop Risk Consulting published a report analyzing the problems that criminal groups create in the mining industry in Mexico. Cases of extortion and protection rackets increased by 16% between 2021 and 2022 alone, and these payments generate a 3% increase in production costs, in addition to requiring larger security budgets. In 2015, an executive at the Canadian mining firm McEwen Mining, with operations in Sinaloa, stated that his company maintained a “good relationship” with Mexican drug cartels, who had to grant permission to explore new deposits. This analysis also highlighted another aspect of the problem: criminal groups force the displacement of communities that oppose projects in regions with high levels of mining conflict.

“In the case of mining, we have observed that some companies in this sector find it necessary to establish contacts with criminal groups in order to operate,” explains Armando Vargas, coordinator of the security program at México Evalúa, an organization that has studied these phenomena in its report, Companies Under Fire: Victimization and Resilience of the Business Sector in Mexico. “This is because in some regions of Mexico, organized crime sets the rules of the game in certain parts of the country. This direct contact is less costly for them than entering into the dynamics of extortion and protection rackets, which are essentially a criminal tax,” he adds.

This doesn’t only affect the mining sector; it’s common across all sectors of the Mexican economy. Fifty percent of business owners in the Coparmex employers’ association report having been victims of crime, and only half believe there are favorable investment conditions. Thus, extortion — besides being one of the few high-impact crimes on the rise — poses a threat to the president’s plans to accelerate industrial and economic activity.

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