Knights Templar Drug Cartel Takes Over Control Of Iron Exports To China

Reuters reports that Mexico’s government faces serious competition in its quest to deepen trade links with China – the Knights Templar drug cartel, based in the Pacific coast state of Michoacán. A Nov. 4^th raid by the Mexican navy on the port of Lázaro Cárdenas, through which the state’s governor estimates some $2 billion changes hands in criminal transactions yearly, saw the federal government regaining control over the port, which had been taken over by the Knights Templar. But the article says that the iron ore mined nearby and sold by the cartel to Chinese companies through the port remains under the gang’s influence.

Local officials say the Knights Templar have elbowed their way into the business by intimidation, pressuring Chinese buyers of iron ore to do business exclusively with cartel-owned mines or face reprisals. Reuters writes that the Knights began by demanding protection money from local transportation unions at the port, then helped prospectors secure claims to mining areas which were either unclaimed or beyond the control of those who owned the concessions – and getting a cut of the profits from these illegitimate, permit-less mines. They also exercised influence on customs officials to make sure cartel-affiliated shipments of ore to Chinese traders went through smoothly. “Most of the groups mining are Knights Templar or belong to them,” one official told Reuters.

Meanwhile, Chinese mining companies are expanding their operations in the area. One, Minero Unificado de Mexico (DMU), has gone from having three employees to 600 across Mexico since setting out in 2009. Hua Chunying,a spokeswoman from the Chinese foreign ministry, told Reuters she did not know about cartel involvement in operations in Lázaro Cárdenas but added that the Chinese government has “consistently educated and asked Chinese companies to respect the law in other countries”. A senior Mexican government official, however, said the Chinese government “doesn't always know what the companies are doing. The occupation of the port ... was the control measure adopted” against Chinese firms’ possible collaboration with the cartel.