The FCPA Professor reports that a group of non-governmental organizations (NGOs) has requested that Blackfire Exploration, a Canadian mining and exploration company, be investigated for possible violations of Canada’s Corruption of Foreign Officials Act (CFPOA) for alleged improper payments to the Mayor of Chicomuselo, Chiapas.
The NGOs claim that Blackfire provided the mayor with benefits, including airline tickets for himself, his family and his associates, but acknowledge that Blackfire stopped honoring the “ridiculous propositions” after the the mayor asked it to arrange a sexual affair with a Playboy model.
The U.S. Commercial Service’s Mexico offices released the following new reports on Mexico in June and July, 2009. Copies are available at the links below:
Mexican retailer Coppel, S.A. de C.V. (MXK: ALMACO) and cement holding company Cemex, S.A.B. de C.V. (NYSE: CX) announced last week that they have placed short-term debt backed by government guarantees issued by Mexican development banks Bancomext (Banco Nacional de Comercio Exterior) and Nacional Financiera, according to a Guardian report.
The guarantees have enabled the companies to roll over commercial paper amid the turmoil in the credit markets.
The report also said that Monterrey-based supermarket chain, Organizacion Soriana, S.A. de C.V. (MXK: SORIANB), had recently been downgraded by Moody’s on concerns it depends too much on commercial paper. In addition to its Soriana and other branded multi-format stores, Soriana indirectly controls Gigante, S.A. de C.V., which operates 198 stores in Mexico and the U.S. under the Gigante, Bodega Gigange, and Super G brands.
Steel giant ArcelorMittal has commenced operations at its new US$157 million iron ore concentration plant in Fundicion, Sonora, according to an October 15, 2008 report in El Financiero.
The plant will process approximately 2 million tons of iron ore per year. The ore will be extracted from various locations throughout Sonora. Once concentrated, the ore will be transported to ArcelorMittal’s Lazaro Cardenas steel manufacturing facility, where it will be processed into value-added steel products.
Baja Mining Corp., (TSX: BAJ; OTCBB: BAJFF.PK), which owns a majority interest in a mining operation located in Santa Rosalia, Baja California Sur, called the “El Boleo Project”, announced that it would invest US$991 million in the project starting in 2009, when mining operations are expected to commence, according to a report in today’s El Economista. The report said that the El Boleo Project is funded by a consortium of investors, led by Korea Resource Corporation and including LS-Nikko Copper, Hyundai Hysco, SK Networks, and Iljin Copper Foil. The property on which the mine is located is reported on Baja Mining Corp.’s website to contain polymetallic (copper, cobalt, zinc, manganese) deposits.
The company has not determined location for the steel mill, which the company expects will provide steel for Mexican infrastructure and housing projects.
The announcement comes approximately a year after ArcelorMittal closed its acquisition of Sicartsa, a Mexican integrated steel producer it bought from Grupo Villacero for US$1.44 billion. In addition to steel production facilities in Mexico and Texas with an annual production capacity of approximately 2.7 million tonnes, Sicartsa has estimated iron ore reserves of 160 million tonnes (approximately 30 years of reserves at current production rates). As part of the Sicartsa acquisition, Arcelor Mittal also entered into a 50/50 joint-venture with Grupo Villacero for the distribution and trading of Arcelor Mittal long products in Mexico and in the southwest of the United States. ArcelorMittal, SA appears to conduct operations in Mexico through its subsidiary Mittal Steel Lazaro Cardenas, S.A. de C.V.