Sonora Spill adds to the Social and Environmental Consequences of Free-Market Mining in Mexico

The massive spill of toxic mining residue that took place in August in Mexico’s  northwestern state of Sonora has underscored the weakness of the country’s environmental laws, as well as the destructive consequences of free-market mining. It is a harbinger for what is in store for the country since Enrique Peña Nieto’s government extended neoliberal reforms to the oil and gas sector, allowing for private and foreign investment in all facets of exploration and production, with a green light for fracking.

The massive spill of toxic mining residue that took place in August in Mexico’s northwestern state of Sonora has underscored the weakness of the country’s environmental laws, as well as the destructive consequences of free-market mining. It is a harbinger for what is in store for the country since Enrique Peña Nieto’s government extended neoliberal reforms to the oil and gas sector, allowing for private and foreign investment in all facets of exploration and production, with a green light for fracking.

As Karl Polayni observed in his magnum opus, The Great Transformation (1944), “leaving the fate of soil and people to the market would be tantamount to annihilating them.” Indeed, the experience of Mexico’s mining sector, especially since neoliberal reforms were implemented over 20 years ago, has tended towards the annihilation of both the natural environment and the peoples directly affected by mining, including smallholder farmers, indigenous groups and miners themselves. The big spill in Sonora needs to be seen in this context.

Poisoning the Sonora River

The spill occurred on August 6, by the town of Cananea, at the largest copper mine in the country, the Buenavista Copper Mine. This is the same site where the historic miners’ strike of 1906 took place, considered to be an important prelude to the Mexican Revolution. Today, Cananea’s copper reserves, the largest in the world, are exploited by Southern Copper Corporation, a subsidiary of Grupo Mexico, which is owned by the second richest man in Mexico: Germán Laréa, whose fortune is estimated by Forbes Magazine to be just under 16 billion dollars.

At first, Larrea’s company tried to keep silent about the sudden and massive discharge of copper sulfate acid into one of the tributaries of the Sonora River, putting into danger the health and livelihoods of approximately 24,000 people. However, the following day local inhabitants reported to the State Unit for Civil Protection that the river had become orange with pestilence. It was not until two days after the spill that representatives of Grupo Mexico finally contacted federal authorities to inform them that abnormally heavy rainfall had caused the mine’s tailings pond to overflow, releasing an estimated 40,000 cubic meters of heavy-metal-laden slurry into the river.

Meteorological reports revealed that the company had lied about the cause; there was no rain in the area in the days leading up to the spill. As it turns out, the immediate cause was “a tube failure,” which Grupo Mexico was quick to blame on its supplier’s faulty design. The question remains, however, as to how it was possible that governmental regulatory agencies were unaware that Larrea’s giant mining company had been depositing toxic wastes into a tailing pond that was still under construction, without a backup basin or other contingency measures as outlined in the Official Mexican Norm for copper leaching systems (NOM-159-SEMARNAT-2011).

Clearly, there was negligence on behalf of both Grupo Mexico and the regulatory governmental agencies in charge of applying the country’s environmental laws, including the Ministry of the Environment and Natural Resources (SEMARNAT), the Federal Attorney’s Office for Environmental Protection (PROFEPA) and the National Commission for Water (CONAGUA). This negligence, however, is an intrinsic part of the country’s neoliberal strategy to achieve economic growth through private and foreign investment. In this scheme, environmental laws are sidestepped in order to accommodate the needs of national and transnational capital.

Along these lines, the head of SEMARNAT, Juan José Guerra Abud, has made public appeals not to demonize the mining industry in the aftermath of what he considers to be the worst environmental disaster in the history of the sector. In the same vein, the head of Mexico’s Ministry of Economy, Ildefonso Guajardo Villarreal, has ruled out closing the mine, even temporarily, much less canceling Grupo Mexico’s concession, in spite of calls made by a special congressional committee to do so, echoed by the Chamber of Deputies on September 17. In explaining this decision, Guajardo Villarreal stressed the need to keep in mind that the Buenavista Copper Mine currently employs about two thousand workers and that this number could potentially be expanded by a factor of four. These statements are ironic, not only because the Buenavista spill has put into jeopardy the livelihoods of thousands people living along the Sonora River, but also because the workers currently employed at Larrea’s gigantic copper mine are the same ones that were hired to replace the unionized miners that went on strike in 2007 to protest, among other things, dangerous working conditions at the mine.

A bit of background

Unlike the petroleum sector, Mexico’s mining sector was never nationalized. However, in the aftermath of the 1910 to 1917 Revolution, and especially during the 1960s and 1970s, public policies were implemented in order to ‘Mexicanize’ the sector, so that the State could exercise greater control over the production and marketing of strategic minerals and metals, in order to feed the industrialization process. Along these lines, in 1971, the Mexican state – through the Mining Development Commission and the National Financial – acquired controlling shares of what was then called the Cananea Mining Company, with monopoly control over the largest open-pit copper mine in the country, in expansion since 1942.

To be sure, in Cananea and elsewhere, parastatal production during the 1970s and 1980s did not put an end to rent transfers to the private sector; new forms of financial, commercial and technological dependence emerged; and the absence of effective environmental regulation translated into diverse forms of environmental degradation. What’s more, during that State-led development period, smallholder farmers and indigenous communities were, as they still are today, routinely dispossessed of part of their natural resource base in order to make way for large-scale mining projects. Even though in the 1970s miners enjoyed a greater degree of union strength and higher real wages than today, the National Union for Mine, Metallurgical and Similar Workers of the Mexican Republic (SNTMMSRM) was at best a semi-autonomous labor union. It was run from the top down, with power centralized in the same union boss for forty years (Napoleón Gómez Sada), and it formed part of the corporatist and clientelistic political system of the ruling Institutional Revolutionary Party (PRI).

In the aftermath of the 1982-88 debt crisis, the Cananea Mining Company was put up for sale, as part of a broader privatization program implemented by the government under Carlos Salinas, with the backing of the IMF, the World Bank and other Washington-based organizations. The miners in Cananea protested by going on strike in 1989. But the Salinas administration responded with two lines of action: first it declared the company bankrupt; and then it sent in the armed forces to break the strike. Finally, the mine was sold to Grupo Mexico in 1990 for 475 million dollars, only half of the amount offered by Protexa two years earlier and less than a quarter of its market value, according to National Financial’s estimates. Suffice to say that Germán Larrea’s father, Jorge Larrea, was well connected to the Salinas Administration.

Indeed, the privatization of the Cananea Copper Mine (later renamed “Buenavista”) is illustrative of the way in which the country’s publicly owned mineral reserves, mining companies and smelting plants were transferred to well-connected Mexican businessmen with little transparency and at prices far below their market value. This was carried out before the sector was completely opened to foreign direct investment (FDI) in 1992. Not surprisingly, the three main beneficiaries of this privatization process are today the three richest men in Mexico: Alberto Bailleres, owner of Industrias Peñoles; Germán Larrea, owner of Grupo México; and Carlos Slim, whose vast empire includes Minera Frisco.

In spite of increasing levels of FDI in Mexico’s mining sector since the mid-1990s, especially from Canadian firms going after precious metals, these three gigantic Mexican corporations have continued to dominate national production. In 2012, Grupo Mexico accounted for two-thirds of the country’s total copper production, one-fifth of the lead and one-sixth of the zinc. It claims to have the largest copper reserves in the world, with 13 mines in operation (in Mexico, Peru and the United States) and exploration projects in six different countries. Larrea’s company also controls more than 10 thousand kilometers of railroads in Mexico, acquired in 1997 through the privatization of Ferrocarril Mexicano. Since 2011, Grupo Mexico has had an average annual net income of over 2 billion dollars, leaving little doubt as to the economic and political power conferred to its principal shareholder and CEO: Germán Larrea.

The annihilation of (unionized) miners

Grupo Mexico has a long history of ignoring workers’ safety concerns. This was tragically pronounced on February 19, 2006, when 65 miners died from an explosion at the company’s Pasta de Conchos coal mine in the state of Coahuila. Napoleón Gómez Urrutia, who had taken over the leadership of the SNTMMSRM from his ailing father in 2000, called it “industrial homicide”. He not only blamed Larrea’s mining company, but also the Ministry of Labor and Social Security for its lack of supervision and negligence in ensuring decent safety standards. Shortly thereafter, he was accused of embezzling part of a US$55 million trust fund that was created in 1991 for the SNTMMSRM to help lubricate the sale of the Cananea Copper Mine to Grupo Mexico, forcing him to flee to Canada to escape arrest. He has since been cleared of all charges.

On June 30, 2007, the miners affiliated with Section 65 of the SNTMMSRM went on strike to protest dangerous working conditions at the Cananea Copper Mine, violations to their collective contract and the political persecution of Gómez Urrutia. Larrea had on his side the Federal Conciliation and Arbitration Board (JFCA) for settling labor disputes, which declared the strike to be “non-existent.” Federal judges, however, where harder to win over; they repeatedly ruled in favor of the legality of the strike. Nevertheless, on January 11, 2008, approximately 800 soldiers and federal policeman stormed and dislodged the striking miners, leaving more than 40 of them injured. The miners were able to regroup with the support of a ruling by the Sixth District Judge in Labor Matters, but on July 6, 2010, they were dislodged again by force, this time definitively.

Today, the miners employed at the Buenavista Copper Mine in Sonora do not come from Cananea. Grupo México will not hire locals. Nor will it hire miners that have been affiliated with the SNTMMRSM or any of their family members. The miners currently employed at the Buenavista Copper Mine have been registered into a “white” union (sindicato blanco), that is, a union controlled by management and linked to the National Federation of Independent Unions.

Where was the executive branch of the federal government in all of this? The short answer is: supporting the interests of Germán Larrea, especially during the 12 years that the right-wing National Action Party (PAN) was in control of the Mexican government, from 2000 to 2012. In this context, the repression and dismissal of unionized miners in Cananea is illustrative of a more general trend during the neoliberal era towards weakening organized labor and making it more flexible. Indeed, this is the spirit of the changes made to Mexico’s Labor Law in 2012, with the support of incoming president Enrique Peña Nieto. What is more, since the 1980s, the Mexican government has used diverse mechanisms to exert downward pressure on wages, in all sectors of the economy, including mining. Today, the average wage in the mining and metallurgy sector is 21 percent lower than it was in 1978, in spite of increased labor productivity. In the final analysis, it is all about creating an attractive environment for private and foreign investment, under the assumption that this will translate into economic growth and social wellbeing.

The annihilation of the land and the people of the land

The richest mineral veins in Mexico and elsewhere have long been exhausted. The general trend on the global level is towards exploiting mineral reserves with decreasing ore grades; that is, with trace amounts of valuable minerals dispersed throughout large rock formations. In order to do this profitably, mines have had to become larger in scale, with open-pit mining increasingly becoming the norm. This implies processing millions of tons of “inert” material. In reality, the mounds of rubble left behind by mega-mining operations are only inert in economic terms; they frequently contain trace amounts of heavy metals that are released over long periods of time into the environment, contaminating the hydrological system. Moreover, modern ore-leaching systems employ a host of noxious substances that end up being stored indefinitely in tailing ponds, including cyanide in the case of gold and silver, which make up 55 percent of Mexico’s mining production. These pools of poison contaminate the natural environment, either gradually through wind, rain and gravity, or suddenly through spills, which are frequent.

Over the past two of years there have been at least five major spills in Mexico’s mining sector. Besides the one in Cananea in August of this year, the national press has registered the following: First, the spill that occurred in September of 2012, at the Peña Colorada iron-ore mine in the Sierra of Manantlán, between the states of Colima and Jalisco; Second, the bursting of a tailings pond on January 20, 2013, at Mina de Bacís’ gold and silver mine in the state of Durango, killing four people and contaminating the Remedios River; Third, the tanker truck that crashed on its way to the Mulatos gold mine in Sonora on August 22, 2013, spilling an estimated 16 thousand liters of sodium cyanide next to the Yaqui River; And fourth, the tailings pond that overflowed due to heavy rains on August 14, 2014, at Proyecto Magistral’s gold mine in Durango, dumping approximately two million cubic meters of water containing cyanide into a nearby stream.

In terms popularized by David Harvey, “accumulation by dispossession” is the dark side of the booming mining industry in Mexico and elsewhere. Smallholder farming communities (ejidos) and indigenous communities are the most directly affected. In spite of reforms made in 1992 to Article 27 of the Constitution and to the Agrarian Law in order to facilitate the privatization of ejidal and indigenous lands, these collective land-tenure systems continue to exercise surface rights over approximately half of the country’s territory. The imposition of mega-mining projects – through force, fraud and bribery – dispossess these rural communities of part of their territory, water resources, culturally significant landscapes and sacred sites. Mega-mining projects threaten the health and cosmologies of rural populations, they give rise to internal conflicts, and they spur on the process of proletarianization insofar as they undermine local agricultural activities and destroy traditional livelihoods.

In the present case, the Buenavista Copper Mine spill prompted the closing of over three hundreds wells along a 250 kilometers stretch of the Sonora River, wells used for irrigating crops and providing water for livestock. Agricultural and other economic activities have been severely interrupted in the affected zone. The contamination will linger for years and the health risks of inhabiting an area with contaminated water will undoubtedly weigh on the decision of many local families to emigrate in the upcoming years.

The price of polluting

On paper, Mexico’s environmental laws have been greatly strengthened since the late 1980s; environmental agencies have been created on all three levels of government (federal, state and municipal) and the Mexican government has been quick to sign onto a host of international agreements concerning the environment. In the mining sector, norms have been established for all facets of exploration, extraction and processing, and companies are obliged to elaborate an environmental impact assessment and to get it approved by SEMARNAT before undertaking new activities. However, as the Buenavista Copper Mine spill illustrates, when large amounts of money are at stake, environmental and safety regulations are sidestepped or poorly enforced in order to accommodate mining capital.

Article 172 of the General Law for Ecological Equilibrium and Environmental Protection (LGEEPA) states that, “When an infraction is serious enough, the authority will solicit the suspension, revocation or cancelation of the concession, permission, license and in general all authorization given to carry out the commercial, industrial or service activities, or the extraction of natural resources, that has given rise to the infraction”. Apparently, even though the head of SEMARNAT considers the Buenavista Copper Mine spill to be the worst environmental disaster in the recent history of the country’s mining industry, it is still not quite serious enough to deserve the application of the law.

Calls from a special congressional committee of the Chamber of Deputies for “an exemplary sanction, both penal and administrative, against the mining company Grupo México” have so far fallen on deaf ears. The Minister of the Economy, Ildefonso Guajardo, insists on keeping the mine operating, opting instead for applying “heavy” fines. In these terms, Grupo Mexico has agreed to set aside US$150 million for cleanup costs and to compensate the local population for the economic and health consequences of the spill. In addition, it will likely have to pay fines in the neighborhood of US$3.4 million for violating the country’s environmental laws. In total, this amounts to less than one-third of the company’s net earnings during the second quarter of 2014.

The message is clear and remarkably consistent with the way in which environmental legislation has been applied to extractive industries in Mexico over the past two decades: the interests of large transnational corporations take precedence over guaranteeing the basic social and environmental rights of workers and affected rural populations. In an upside down world, billionaires pollute rivers, exploit miners and neglect safety standards with virtual impunity, and the model gets extended to the petroleum sector.

Darcy Tetreault is a professor and researcher at the Autonomous University of Zacatecas’ Academic Unit for Development Studies. Email: