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News Article

ArcelorMittal’s Mine Closed by Lazaro Cardenas’ Authorities

By Paloma Duran | Thu, 11/05/2020 - 10:44

The City Council of Lazaro Cardenas, Michoacan has closed ArcelorMittal’s mine Las Truchas arguing that it did comply with the minimum safe requirements. However, in a press release, ArcelorMittal said the government is pressuring the company to accept a higher property tax, reports El Economista.

María Itzé Camacho Zapiaín, Lazaro Cardenas’ governor, and the Ministry of National Defense (SEDENA) decided to suspend the company’s permit for the use of explosives and other dangerous substances at its mining and steel properties.

According to El Economista, ArcelorMittal said in a press release that the mine closure is unjustified and illegal. It was argued previously the company had a general permit provided by SEDENA. Nevertheless, the government asked SEDENA to not authorize the company the use of explosives in 2021 arguing that ArcelorMittal did not have a signed agreement with the current municipality administration.

The company said that according to the Federal Firearms and Explosives Control Act and its regulation, this agreement is not required annually. In addition, it was mentioned that the company previously asked the local government to provide any new requirements. However, ArcelorMittal did not received any response, according to El Economista.

The company reaffirmed its commitment to respect applicable laws and regulations but said this decision follows its refusal to accept an increase in property taxes of 70 percent and an alleged MX$132 million (US$6 million) in debt.

A press release from the Lazaro Cardenas administration states ArcelorMittal acquired its permit before the change in administration and without warning to the current government. Camacho also stated that the closure of the company’s offices was due to the lack of an internal civil protection program and other administrative anomalies.

Camacho said in the statement that the company requested the intervention of the Ministry of the Interior to stop the municipality actions. Multiple dialogues followed in which the company and government talked while the Ministry participated as an observant. However, after two months, dialog broke and the federal justice system concluded that the municipality’s actions were according to the law.

Camacho emphasized that there is a null possibility to negotiate with the company due to the state of its current administration. Finally, she mentioned that the law is being reinforced in the benefit and improvement of the Lazaro Cardenas municipality.

The data used in this article was sourced from:  
Forbes,Ayuntamiento Lázaro Cárdenas
Photo by:   @pixel2013
Paloma Duran Paloma Duran Junior Journalist and Industry Analyst