recently covered AMI’s whitepaper on mining risks, particularly in the area of criminal groups:

When it comes to organized crime in itself, AMI suggests that miners need to view such illegal groups as businesses and not as simple security threats. In the consultancy’s view, the reasoning behind this logic is simple. Criminal bands tend to have a hierarchy and different business divisions, each in pursuit of profits. “If one business division, such as drug trafficking, is shut down by strong enforcement, revenues must be found in other areas, like kidnapping or extortion,” the firm’s experts state in the paper.

In other words, miners operating in areas under siege by organized crime need to keep track of what is happening with such organizations because even if they have never been approached or attacked by them, a change in conditions might put a target in their operations. Rising mineral prices and profits may also awaken an interest in illegal mining or in extorting a miner.

“In Mexico, Brazil, and Honduras, for instance, some gangs are known to extort the vendor suppliers of mines, extracting a ‘war tax’ to guarantee their safety. These costs are passed onto the mine via invoices for real goods and services billed at inflated numbers.” This practice is also known to take place in Venezuela.

Click here to read the full piece.