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Mexico’s Total Iron-Ore Exports Likely to Fall 80%
TIANJIN, China—Mexico’s exports of iron ore have plunged in the wake of a bid by authorities to break the grip of drug cartels on parts of the country’s iron-ore industry, a Mexican official said.
Mexico will likely export just 2 million metric tons of iron ore this year, in part because of a crackdown on cartel-linked shipments to China, Mario Cantú, Mexico’s coordinator general of minerals, said on the sidelines of an industry conference in the northeastern Chinese city of Tianjin. Last year, Mexico exported about 10 million tons of the mineral, 9 million of which were bound for China.
It isn’t clear the extent to which exports specifically to China will drop this year, Mr. Cantú said, but the decrease will likely correspond with the 80% drop in total Mexican iron-ore exports.
The export collapse is linked to Mexico’s moves to combat drug cartels operating in the country’s top ore-producing state, Michoacán, and their expansion into lucrative shipments of the mineral to China, the world’s biggest buyer of iron ore.
In addition to confiscating iron-ore that officials said was linked to drug cartels and closing facilities where the mineral was processed, Mexican authorities this year introduced a new export permit aimed at curbing illegal shipments. Last November, the Mexican navy also seized control of Michoacán’s port of Lázaro Cárdenas, Mexico’s largest in terms of tons of cargo, in a bid to cut funding to the Knights Templar, a drug cartel that exerted significant control over the economy in much of the state.
Lazaro Cardenas has long been an entry point for chemicals used in the manufacture of methamphetamines by the Knights Templars. It has also been a gateway for iron-ore exports linked to the drug traffickers, which in recent years have seized control of many iron-ore mines that were shipping the mineral to China. “We realized some of the minerals have been exploited without permits. That led us to change the rules,” Mr. Cantú said.
In March, Alfredo Castillo, a special presidential commissioner for Michoacan, told the Associated Press that illicit ore shipments from the port had become the Knights Templar’s principal source of revenue.
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