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Terror in the hills, or on the stock market?

24 April 2013

Yesterday (24 April 2013) IncaKolaNews posted the following:

Could Sierra Metals (SMT.v) please tell us more about the four company employees kidnapped, with whereabouts still unknown, by Mexican narcoterrotists recently?

After all, any normal public listed company would feel obliged to inform the market about such an event, wouldn’t it? The fact that the four men working for Sierra Metals (SMT.v) are still missing weeks after the event and nobody seems to know what has happened to them also adds to the mystery.
Or perhaps SMT just wants everybody to ignore what’s happening in and around its Chihuahua operations, which is why they’ve been so quiet about it.

The Inca knows more about the hinky world of foreign mining operations in Latin America than anyone, but I wonder if “narcoterrorist” is the right word here. Assuming mining company employees were kidnapped by people involved in the narcotics trade, it would seem to be an intermural squabble between two competing export industries.

“Terrorism”, which is usually defined as violence against civilians meant to influence state policy, and while gangsters involved in narcotics exports are said in some instances to be a de facto state in parts of Chihuahua, this would still be a common crime.

It COULD be quasi-political, simply in that mining operations are staples of local economies in some areas of this country, and reforms in mining laws are being debated in Congress, making them a political issue. Sierra Metals press releases have been talking about their on-going lawsuits with Polo y Ron Metals over the validity of an option agreement on properties to which Sierra may, or may not, have had a concession. Sierra Metals was not working the concession, and concessions not being exploited are supposed to be cancelled, which would have made the option problematic, to say the least.

If — as has been said — this is a chronic issue with Canadian owned mining operations, and new mining laws come into effect here in Mexico, mines with dubious concessions might be at risk throughout the country. More to the point for some, the values of shares in the companies holding questionable (or clearly illegal) concessions may plummet… and those are the kind of thing companies kill (and kidnap) people to prevent, or at least prevent from becoming known.

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