Canadian mining firm accused of links to murder of protester, threatens arbitration over mine closure in Chiapas

By Fernando Cabrera Diaz

March 11, 2010

Calgary-based mining firm Blackfire Exploration has reportedly threatened Mexican officials in Chiapas with NAFTA Chapter 11 arbitration in response to the closure of its barite mine in the southern Mexican state of Chiapas.  The mine’s closure came on the heels of intense local protests against the mine following the murder of a local activist.

On November 27, 2009 Mariano Abarca, leader of the Mexican Network of those Affected by Mining (REMA by its initials in Spanish) was assassinated in front of his home. Mr. Abarca led a local movement against Blackfire’s barite mine near the town of Chicomuselo Chiapas. Locals accuse the mine of contaminating area farms and using up water resources.

According to the Globe and Mail three men have been arrested by Mexican police in connection with the slaying, one a current Blackfire employee and two others who worked for the company in the past. Company President Brent Willis has denied the company had any connection to the killing and has repeatedly stated that the Chiapas mine is being run in an environmentally responsible way that meets Canadian standards.

Less than two weeks after Mr. Abarca’s murder and amidst growing protests, on December 7th state environmental authorities in Chiapas ordered the temporary closure of the mine. Chiapas officials denied the murder played a role in their decision and instead cited pollution and toxic emissions as the reason.

According to reports in Mexican Daily Milenio, Blackfire has threatened to launch NAFTA Chapter 11 arbitration against Mexico seeking almost US$ 800 million as compensation for the illegal closing of its mine in Chiapas. Citing an unnamed Blackfire spokesperson the paper says the company is still willing to negotiate with the Chiapas government over the re-opening of the mine or appropriate compensation if this is not possible.

The Blackfire controversy is providing more ammunition to proponents of Bill-C300 in Canada introduced last February by Canadian Member of Parliament John Mackay. Also known as the Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act, the bill would hold Canadian companies who receive support from the Canadian government responsible in Canada for human rights and environmental abuses in developing countries.

In a bizarre twist to the story, Blackfire revealed to the Globe and Mail that it had filed a complaint with the Congress of Chiapas in June 2009 alleging that the company was being extorted by Chicomuselo mayor Julio Cesar Velazquez Calderon.

In its complaint Blackfire says that it paid the mayor a total of over US$ 17,000 in monthly instalments to prevent members of a co-operative farm near the mine from “taking up arms” against the company.  The company says it stopped paying the bribes when the mayor’s demands escalated to include a sexual evening with Mexican nude model Niurka Marcos.

Meanwhile, a coalition of Canadian NGOs and labour rights groups including Common Frontiers-Canada, MiningWatch Canada, the Council of Canadians and United Steelworkers, have called on the Royal Canadian Mounted Police to investigate the company’s alleged corruption of Mexican officials and intimidation of protesters citing the Canadian Corruption of Foreign Public Officials Act.


“Empresa canadiense, inconforme con el cierre de mina de titanio, Demandarán al gobierno de Chiapas por 800 mdd,” Milenio Online, February 10, 2010:

“RCMP asked to investigate Canadian mining company,” Vancouver Sun, December 19, 2009.

“The mayor, the model and the mining company; Canadian firm Blackfire unearths more controversy by alleging politician sought cash bribe and ‘sexual evening,” By Andy Hoffman, The Globe and Mail, December 12, 2009.

“Citing environment, Mexican state shuts down Canadian-run mine after slaying of activist,” By Manuel de la Cruz, Canadian Press, December 9, 2009.

Text of Bill C-300 is available here: