Mining Stirs Tensions in Mexico – by Jean Guerrero (Wall Street Journal – May 23, 2013)

OCOTLAN, Mexico—An influx of mining investments throughout Latin America is bringing badly needed investment, but is also causing tensions in some communities, pitting those who see mines as job creators against those who view them as predatory, in some cases threatening scarce resources like water.

Here in the Ocotlán valley in the southern Mexican state of Oaxaca, two outspoken opponents of a subterranean mine run by a small Canadian firm, Fortuna Silver Mines Inc., FVI.T +5.21% were killed in separate incidents in the past year. Dozens were beaten or threatened. Two local government officials who approved the mine, including the then-mayor, were killed by an anti-mining mob.

From 2006 to 2011, mining exploration investment in the region jumped 150% to $4.55 billion, top in the world and equal to one in every four dollars, according to the mining industry information company Metals Economics Group. The investments are creating jobs, roads and other benefits in some of the most neglected corners of the developing world. But it is also creating tensions in a region with a long and complicated history with mining.

In 2012, six anti-mining activists died in clashes with police in Peru, where a $5 billion project by Colorado’s Newmont Mining Corp. NEM +0.81% was put on hold due to concerns about water supply. In central Guatemala, an outspoken mining opponent was shot multiple times by gunmen on a motorcycle in June.

In Mexico’s northern Chihuahua state last October, a mining opponent named Ismael Soloriowas shot dead in his car alongside his wife days after he was attacked by a pro-mining mob.

In Bolivia last summer, President Evo Morales nationalized the mines of two large companies whose operations he said turned once-peaceful towns violent.

In each of the cases, the mining companies deny any link to the violence, saying the problems come from disputes among residents. Investigations continue into the deaths and some people have been charged.

The bloodshed has reached a level that it is starting to make some foreign investors nervous. Dan MacInnis, chief executive of the Canadian company Mag Silver, said he believed the killings in Mexico may eventually stifle the country’s mining boom. “Ultimately, there is a danger that if this continues, Mexico will take a hit as a place to do business,” he said.

Until recently, Latin America was viewed as a relatively safe place to do business for mining firms, with less labor unrest than, say, South Africa. Relatively low taxes raised the allure for mining investors.

But a wave of strife involving mining projects is spreading throughout much of the region, both mining companies and activists agree.

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