Mexico’s Zetas drug cartel strikes gold in the coal business
They may be known for flashy cars and state of the art weaponry, but Mexican druglords have found an earthy new source of wealth: dirty old coal.
They are mining it themselves in a coal-rich area along the US border or buying it from small mine operators, then reselling it to a state-owned company at fabulous margins that can see them make a profit 30 times greater than their initial investment.
Along the way, besides the earth’s black bounty, the druglords are seeking to reap credibility as legitimate business people.
First word of the Zetas drug cartel’s presence in mining-heavy Coahuila state came in October from a former governor, Humberto Moreira, who blamed the notoriously violent group for his son’s death.
The Mexican Mining Association says Mexico produces 15 million tonnes of coal a year, worth $3.8 billion. About 95 percent of it comes from Coahuila.
Reforma newspaper says the Zetas produce or buy 10,000 tonnes of coal a week. Selling it at their inflated prices, that means yearly revenue of $22 million to $25 million.
The Zetas were created for former Mexican military special forces operatives who worked for the Gulf cartel. But they broke away from that group to control lucrative drug trafficking routes to the United States and engage in other crimes such as extortion, people trafficking and fuel theft.
“The Zetas are the first Mexican cartel to diversify from drugs into other areas,” said Tomas Borges, author of a book on the cartels.
Zetas leader Heriberto Lazcano was shot and killed by authorities October 7 in the coal mining town of Progreso. Hi body was later stolen by armed men.
Moreira says the drug lord had his own coal pit in the region.
But the Zetas presence is not new. Raul Vera, bishop of Coahuila’s capital Saltillo, said drug traffickers have been digging coal for years and doing it in areas where it is illegal.
“It is an open secret that drug traffickers are infiltrating the coal mines. But since Moreira spoke out, we have seen police and military around and we know they arrested several people,” a coal industry businessman in Agujita said on condition of anonymity.
Highway 57 heading north to the United States runs through a dusty black area where piles of coal from small, precariously operated mines dot the landscape. Fatal accidents are common.
Trucks loaded with coal are stopped at checkpoints manned by soldiers looking for drug traffickers and drug shipments.
Since the Zetas discovered coal, violence has been on the rise, especially in a town of 150,000 called Piedras Negras, or black stones.
For drug cartels, diversification is almost a natural evolution, said Antonio Mazzitelli of the United Nations Office on Drugs and Crime.
In Colombia, for instance, traffickers infiltrated gold and coal mines and also dealt in oil.
“Corruption is their main tool for doing business, and also violence, if necessary,” Mazzitelli said.
Legitimate businesses help cartels launder money and bring in extra revenue, added Eduardo Salcedo, a Colombian who co-authored of a book on how drug cartels have reshaped Colombia, Guatemala and Mexico.
Such business activities allow them not just to bring in more money “but above all gain social and political legitimacy,” Salcedo said.
Traffickers want to be able to “legalize their leaders and activities and join the formal economy, and be able to operate in society in a more relaxed way,” he explained.
But that quiet end does not always involve peaceful means.
Traffickers sometimes kidnap, mug or even kill miners and their bosses, or force them into business-sharing agreements, said Salcedo.
In Coahuila, some companies without mines or employees have contracts with local coal industry promoter Prodemi, according to a researcher from a local organization founded by relatives of miners who died in a 2006 accident that claimed 65 lives.
“There are mines that have a capacity for 30,000 tonnes but have contracts for 150,000. What they are selling is not what they are producing,” added the researcher, who requested anonymity.
“They are buying it from a third party and that is where all these people come in, be they Zetas or not, legal or not, clandestine or not.”