Tags: drug | cartel | iron | ore

Drug Cartel Has Control Over Iron Ore Trade Between Mexico, China

Image: Drug Cartel Has Control Over Iron Ore Trade Between Mexico, China

Thursday, 02 Jan 2014 02:47 PM

By David Ogul

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A powerful drug cartel has gained control of the booming iron ore trade between Mexico and China, and both countries appear incapable of stopping it.

“The Knights Templar gang, based out of Mexico’s Pacific Michoacan state, has seized control of several mines while stealing and extorting numerous others,” the Langley Intelligence Group Network reported. The Mexican Economy Department, LIGNET added, said the “illegal activity was encouraged by the great demand for iron by countries such as China to develop their industries.”

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The Knights Templar — named after the a military group that protected Christian pilgrims during the Crusades — also controls transportation in the rapidly growing container port of Lazaro Cardenas, according to intelligence reports.

Mexican exports of iron ore to China have quadrupled over the past five years to 4.6 million tons annually, according to the Langley Intelligence Group, a Washington, D.C.-based service providing global intelligence and forecasting from former government officials.

“The latest reports are a sobering reminder of the extent that Mexico’s cartels have infiltrated the country’s economy and society,” the Intelligence Group states on its website. “The gangs appear to have leveraged their ties to Chinese organized crime to secure alternative sources of revenue amid an ongoing crackdown on their drug smuggling operations.”

Local officials attribute the Knights Templar’s success to several factors, including controlling how the ore moves by “taxing” local transportation unions, according to a report by Reuters.

“It also helped local prospectors stake claims to mine areas either unclaimed by others or beyond the control of the existing concession-holders,” Reuters reported. Finally, the gang bribed custom officials to make sure the ore would be shipped without interference.

While Mexico began a brutal crackdown on organized crime under former President Felipe Calderon, much of Michoacan remains in chaos. More than half of the state’s residents are living in poverty, creating new opportunities for gangs such as the Knights Templar.

Catholic Online reported the only known arrest connected to cartel mining operations happened in Michoacan in 2010 when a member of La Familia was accused of illegally selling ore to China.

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