News Article

Security, An Important Investment to Protect Mining Operations

By Karin Dilge | Thu, 07/07/2022 - 10:45

Security issues continue to cause concern for Mexican mining operators, and therefore directly influence Mexico’s competitiveness and investment attractiveness. Extortion, robberies and kidnapping are some of the main risks that need to be confronted. A stronger safety culture could serve as a bulwark against this insecurity, agree industry experts.

According to government data, from March 2021 to February 2022, 9,037 extortions were registered in Mexico. This represents an increase of 16.8 percent compared to the same period from 2020 to 2021. In addition, authorities warned instances of extortion are expected to grow throughout 2022. Meanwhile, in the case of kidnappings, 627 cases were reported from February 2021 to February 2022, showing a year-on-year decrease of 18 percent. Despite this reduction, mining experts assure that the risk remains problematic.

“The mining sector faces traditional risks like extortion, robbery and kidnapping, as well as dynamic risks like faulty relations with local communities and infiltration of organized crime,” said James Sinclair, Partner, Control Risks. Despite a relatively calmer 2021, extorsion levels have increased in recent times as one of the practices used by organized crime to infiltrate mining companies and receive relevant information.

Mining operations are vulnerable to organized crime and attacks because they are usually located in remote areas. Moreover, the value of the products they produce is high, which makes them an attractive target. Mario Salomón, Country Manager, Multisitemas de Seguridad Industrial points out the importance of hiring a capable, qualified leader for the security department of mining companies to tackle these problems.

Salomón adds that Mexico ranked 73 out of 88 regarding countries in the security section of the Fraser Institute's Investment Attraction Index in 2020 and 2021. Diana Centeno, Director General of Grupo Maya and Women in Mining (WIM) Partner identified a key problem: companies focus on industrial security, neglecting property security. Therefore, a mine’s security leader must have the knowledge and credentials to identify the needs and vulnerabilities of the mine.

Drug-related violence is commonplace in Mexico. In the past years, opium and heroin prices have decreased, which drove the so-called narcos look for new illicit activities to obtain resources. "Mining is a great target for them to that end,” said Salomón, adding that criminals already have their own clandestine distribution channels to sell mining products. To mitigate these threats, security companies should hire security personnel from outside the community to avoid infiltration.

In addition, local authorities are often corrupted by criminal activity. Therefore, they cannot serve as a support and coordination channel. Even worse, the experts said that federal authorities lack the capacity to support mining operations. Therefore, operators must take on the matter themselves by creating a strong security strategy, implemented by professionals.

The experts furthermore identified a severely lacking culture and education regarding security. Mining companies in Mexico invest less in security than companies in the US, a country with a stronger public security service, said Salomón. Mining companies need to cooperate closely with private security companies.

Companies have to envision security as a strategic tool, not only an operative one. Security should be seen as an investment instead, as it can bring tangible returns to companies.

Karin Dilge Karin Dilge Journalist and Industry Analyst