Drugs, Cock Fights and Iron Ore -- a Chinese Connection to the Michoacán Crisis?

I look forward to investigative reporters digging deeper into the causes and consequences of the current Michoacán crisis to help us understand the many layers that lay behind a conflict that is often reported as one between evil extortionists and a noble popular uprising.
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In a scene that could have been imagined by Gabriel García Márquez, last Christmas three Sinaloa drug cartel members were arrested in a cock fighting farm close to Manila. As reported by Hong Kong's South China Morning Post, their arrest resulted from a longer investigation by international intelligence agencies of growing cooperation between Chinese and Mexican mafias. According to the report, lax Chinese controls of metamphetamine precursors, growing cocaine consumption in Asia and human trafficking networks are among the reasons behind these new alliances.

These cartels benefit via linkages with Chinese organized crime by obtaining access to bulk precursor chemicals whose regulation has been severely tightened in Mexico and the United States.The Chinese and HK triads get cash providing the bulk of precursor materials and also infantry small arms and ammunition. They also profit from smuggling Chinese and other Asian nationals via the cartels into the United States. -- Professor Robert Bunker, of the Strategic Studies Institute at the U.S. Army War College in Pennsylvania.

The gangs also trade finished drugs, with Sinaloa selling cocaine to increasingly affluent Asian markets, according to a 2011 report by the non-profit Jamestown Foundation.

Eight months earlier, Virgilio Camacho, an important executive of ArcelorMittal, which according to its own website is "the world's leading steel and mining company," was found dead, shot on the head, in Michoacán's bustling and increasingly contested Lázaro Cárdenas port. While his murder remains unsolved, the Mexican government suspects drug cartel involvement over wars to control the extraction and export of iron ore, as the Knights Templar cartel mines in lands over which the corporation is supposed to have exclusive legal rights. The cartel is accused of exporting much of this mineral to China, in exchange for metamphetamines' precursors. Fernando Ramos, a port customs official estimates that the Templars made over $70 million in one year through these exports.

According to the Wall Street Journal, drug cartels have been in the mineral export business to China for a few years. In 2010, for example, police arrested 40 people involved in illegal mining in territory in which ArcelorMittal was supposed to have exclusive rights. This scheme was associated to La Familia, the precursor to the Knights Templar. According to the report, in that year the cartel made approximately $40 million exporting over 1.1 million tons of mineral to China. In response Virgilio Camacho, representing ArcelorMittal, negotiated a deal with local landowners and truckers. Under the deal, the transnational would pay $16-$18 per ton of the iron-rich hematite, yet Chinese buyers offered $65-$85 for the same amount.
Much of the recent coverage of the autodefensas growing uprising in Michoacán has focused on their drug trade, and their extortion and protection rackets. Recent articles by Al Jazeera America and Fusion have also focused on the Knights Templar links to the growing avocado business. Much less has been written about these large mining interests, their relationship to the drug trade and human trafficking. Yet the signals of these links are beginning to trickle, and the state's autodefensas also begin to come into the picture.
A recent article in Imagen del Golfo focuses on mining support for the autodefensas. The article talks about protection schemes between Knights Templars and miners, and emphasizes recent agreements between the autodefensas and the miners. Asked about this in the article, a commander named Simón or El Americano answers "Oh, yes. The Chinese and them [the miners] are supporting [us]."

I have recently affirmed here that "it is way too early to reach conclusions as to the results of this uprising, but one can clearly see that its causes and consequences are international in nature." At the time my focus was on returned migrants in the autodefensas, and historic linkages between Michoacán and the United States, but a closer examination indicates that the international nexus is much larger.

A recent article by the Mexican collective Jóvenes ante la Emergencia Nacional digs much farther into the current Michoacán juncture, and China again becomes central. Their analysis focuses on the state's natural wealth, its growing infrastructure and investments, linking it to a very important North American economic corridor. It looks at a growing multidimensional struggle for control of resources and trade routes, and also links recent economic, political and military events to a larger worldwide economic restructuring, including recent plans to renegotiate NAFTA and efforts to implement the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). This article, written in Spanish, is well worth reading.

I look forward to investigative reporters digging deeper into the causes and consequences of the current Michoacán crisis to help us understand the many layers that lay behind a conflict that is often reported as one between evil extortionists and a noble popular uprising.

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