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In just a little more than a week after the mighty Newmont-Goldcorp merger was finalized, the company suspended operations of its largest gold-silver mine in Mexico. The Penasquito Mine, which produced more than a 500,000 ounces of gold and 25 million ounces of silver in a single year, has been dealing with a blockade of its operations since March 27th.

The blockade was started due to issues with the local community in regards to water supply concerns and problems with a trucking contractor. However, the protests by the local community over water rights have been going on ever since the Penasquito Mine started operations in 2010.

According to the article, Goldcorp using excessive water at Peñasquito mine – critics, research by McGill Research Group, reported that the Penasquito Mine was using three times the amount of water than it originally agreed upon. Furthermore, the large open-pit gold-silver mine, located in the state of Zacatecas, was also consuming three times the amount of water supplied to the entire City of Zacatecas (population 129,000).

To get an idea the amount of water being consumed by the Penasquito Mine, I looked at the data from Goldcorp’s most recent Sustainability Report. In 2017, the Penasquito Mine withdrew a staggering 7.9 billion gallons of water to supply its operations for the year. Of that total amount, 93% came from groundwater. That is one hell of a lot of water.

It will be interesting to see how long it takes for the suspension to end. However, with the election of the new President AMLO of Mexico, Andrés Manuel López Obrador, large foreign mining companies in Mexico may find it increasingly challenging to GET THEIR WAY as they have in the past with the help of pro-mining leaders.

Regardless, the Penasquito Mine produced the second highest amount of silver in Mexico last year:

…click on the above link to read the rest of the article…

A Volcano That Could Completely Cover Mexico City With Volcanic Ash Just Erupted 200 Times In A 24 Hour Period

April 2, 2019

A Volcano That Could Completely Cover Mexico City With Volcanic Ash Just Erupted 200 Times In A 24 Hour Period

The most dangerous volcano in Mexico just erupted 200 times in a 24 hour period, but there has been an almost total blackout about this in the U.S. media. Authorities are saying that the odds of more volcanic activity at Mt. Popocatepetl are “immediate to high”, and if a full-blown Plinian eruption were to occur it would be the worst natural disaster in the modern history of North America. Approximately 26 million people live within 60 miles of Popocatepetl’s crater, and so we are talking about the potential for death and destruction on a scale that is difficult to imagine. In ancient times, Mt. Popocatepetl buried entire Aztec cities in super-heated mud, but then it went to sleep for about 1,000 years. Unfortunately for us, it started waking up again in the 1990s, and now this is the most active that we have seen it ever since the volcano originally reawakened.

What we have witnessed over the last several days has been nothing short of stunning. According to a British news source, a level three yellow alert was put into effect after “200 eruptions were recorded in just 24 hours”…

Popocatépetl volcano, just 35 miles from Mexico City and 20 miles from Puebla sent ash and plumes of smoke more than 1.5 miles high. Mexico’s National Centre for Disaster Prevention (CENAPRED) has warned people to keep away from Popocatépetl after 200 eruptions were recorded in just 24 hours. A level three yellow alert has been issued meaning the chance of volcanic activity is immediate to high.

At this point a 7.5 mile “security radius” has been established around the volcano, and if things continue to get worse authorities will be forced to begin large scale evacuations.

…click on the above link to read the rest of the article…

NEXT OIL DOMINO TO FALL? Mexico Becomes A Net Oil Importer

March 28, 2019

NEXT OIL DOMINO TO FALL? Mexico Becomes A Net Oil Importer

While Mexico suffered the bloodiest year of violent deaths in 2018, even bigger trouble may be ahead for the embattled country. For the first time in more than 50 years, Mexico has become a net importer of oil. This is undoubtedly bad news for the Mexican Government as it has relied upon its oil revenues to fund a large percentage of its public spending.

However, it wasn’t always this way. After the discovery of the huge Cantarell Oil Field in the Gulf of Mexico in 1976, Mexico’s oil production surged from 894,000 barrels per day to a peak of 3.8 million barrels per day (mbd) in 2004. That year, Mexico’s net oil exports exceeded 1.8 mbd.

Unfortunately, the downturn of Mexico’s oil production was mainly due to the peak and decline of the Cantarell Oil Field, which topped out at 2.1 mbd in 2004 and is now below 135,000 barrels per day:

With the rapid decline in Cantarell’s oil production, Mexico’s net oil exports also plummeted from 1.8 mbd in 2004 to only 314,000 barrels per day in 2017. However, the situation for Mexico’s net oil exports continued to deteriorate in 2018 as its domestic oil supply fell to a new low at the end of the year.

According to several sources, the BP 2018 Statistical Review, IEA’s OMR Reports, and the EIA’s data on World Oil Production, Mexico became a net oil importer in November 2018:

I find it strange that this has not yet been mentioned in the news as it is a very critical factor for the future of Mexico. Now, I would like to qualify that the data I am using is accurate. I found Mexico’s total petroleum production and consumption data from the EIA, the U.S. Energy Information Agency’s World Oil Production Browser, the IEA’s, the International Energy Agency OMR Reports, and BP’s 2018 Statistical Review.

…click on the above link to read the rest of the article…

It’s Happening – The Most Dangerous Volcano In North America Just Erupted And Shot Ash Nearly A Mile Into The Sky

March 21, 2019

It’s Happening – The Most Dangerous Volcano In North America Just Erupted And Shot Ash Nearly A Mile Into The Sky

A lot of us have been watching Mt. Popocatepetl for a very long time. Could it be possible that we are now on the verge of the most destructive volcanic eruption in the modern history of North America? On Monday night at precisely 9:38 PM, a massive explosion at Mt. Popocatepetl sent a column of volcanic ash nearly a mile into the sky. A “yellow alert warning” has been issued by the authorities, and they are ordering everyone to stay at least 12 kilometers away from the crater. They are stressing that the threat has not passed, and as you will see below, an evacuation plan is in place in case an even larger eruption follows. And if a much larger eruption does follow, the devastation could be off the charts. Mexico City is only 43 miles away from Mt. Popocatepetl, and approximately 25 million people live within a 60 mile radius of the crater.

The explosion on Monday night was definitely a wake up call. According to media reports, it was “loud enough to shake doors and windows of houses in the city of Puebla”…

Mexico’s Popocatepetl volcano erupted late on Monday, hurling incandescent rock about 1.5 miles down its slopes and sending ash into the night sky near the nation’s capital.
The explosion, one of the volcano’s largest eruptions in years, was heard from nearby communities and was loud enough to shake doors and windows of houses in the city of Puebla, according to local media.

Mt. Popocatepetl has been increasingly active in recent months, and authorities are concerned that all of this activity could be leading up to something really big.

In fact, it is being reported that they are “currently preparing for the worst case scenarios”…

…click on the above link to read the rest of the article…

What collapse is like: Guadalajara Mexico

December 30, 2018

What collapse is like: Guadalajara Mexico

Preface. Collapse can be local rather than national. There are 5 states within Mexico the State Department warns not to travel to: Colima,Guerrero, Michoacán, Sinaloa, and Tamaulipas because violent crime, such as homicide, kidnapping, carjacking, and robbery, are widespread. There are 11 more states the state department says you should reconsider travel due to violent crime and gang activity being widespread: Chihuaua, Coahulla, Durango, Estado de Mexico, Jalisco, Morelos, Nayrit, Nuevo Leon, San Luis Potosi, Sonora, Zacatecas.

There are patterns to what happens in a collapsing city or state or nation that are common to all places and all times. If you’re curious how things will go down in the U.S. at some point during the Great Simplification, this article will give you an idea of what to expect. Though given the extremely high level of gun ownership in the U.S., it could be worse…

Alice Friedemann www.energyskeptic.com author of “When Trucks Stop Running: Energy and the Future of Transportation”, 2015, Springer and “Crunch! Whole Grain Artisan Chips and Crackers”. Podcasts: Practical Prepping, KunstlerCast 253, KunstlerCast278, Peak Prosperity , XX2 report

***

William Finnegan. July 2, 2012. The Kingpins. The fight for Guadalajara. The New Yorker.

At the Guadalajara International Book Fair, Enrique Peña Nieto, who is forty-five, boyishly handsome, and generally expected to be the next President of Mexico, was asked to name three books that had influenced him. He mentioned the Bible, or, at least, “some parts” (unspecified), and “The Eagle’s Throne,” a Carlos Fuentes novel (though he named the historian Enrique Krauze as the author). And, for a few excruciating minutes, that was all he could come up with. The crowd laughed wickedly. Peña Nieto’s wife, a former soap-opera star, squirmed in the front row. His teen-age daughter didn’t help matters when, in a tweet, she scorned “all of the idiots who form part of the proletariat and only criticize those they envy.”

…click on the above link to read the rest of the article…

Mexico’s Oil Crisis Deepens

November 27, 2018

Mexico’s Oil Crisis Deepens

Mexico’s state oil company Pemex said it produced an average 1.76 million bpd of crude in October, down 7 percent from October last year, Reuters reports, citing data released by the company. This is also one of the lowest monthly production rates since 1990 when records began.

The decline was attributed to the natural depletion of mature fields, highlighting the urgent need for new production in the country. The outgoing government of Enrique Pena Nieto launched a sweeping reform in Mexico’s energy sector, one of its aims being to open up the local oil wealth to foreign operators in order to stem this decline in production. The incoming government is currently reviewing oil contracts signed by the previous administration to make sure no corruption was involved in the deals.

Exports of crude also declined last month, and by a lot more than production. Pemex exported an average 1.03 million bpd, down by 25 percent from a year earlier. President-elect Andres Manuel Lopez Obrador earlier this year said Pemex should keep more crude for its refineries instead of exporting it to reduce Mexico’s dependency on imported fuels, but the country’s refining sector needs a lot of work to make this plan successful.

It was in October that Pemex’s refineries hit a record low utilization rate of 25.7 percent, according to an S&P Global Platts report, which also noted the causes of the drop included shortages of light crude and technical difficulties at some refineries. Pemex would need to upgrade its refineries to produce more gasoline to make local refining more profitable as currently its facilities produce a lot more fuel oil than would make economic sense.

Despite the problems, Obrador has ambitious plans, including an increase in crude oil production to 2.6 million bpd by the end of his six-year term in office and a lot more domestic refining.

Tectonic Plate Splits in Two Raising Risks for West Coast

October 26, 2018

Tectonic Plate Splits in Two Raising Risks for West Coast

San Andreas Fault in California Can Be Observed from the Sky

Recent studies have revealed that the massive earthquake which stuck Mexico actually split a tectonic plate in two. This has done more than just shaken the ground. It has also shaken up the geologist community for this may even introduce a greater risk to California. That quake took place on September 7th, 2017, and was a magnitude 8.2 earthquake that struck southern Mexico. Earthquakes are common events around the world in different degrees. However, this powerful event wasn’t any run-of-the-mill tremor. It actually split the tectonic plate itself.

Normally, earthquakes take place where two tectonic plates meet. They constantly move around Earth’s surface, either grinding side by side, or they will crumble which ends up creating mountain ranges. They can also descend under another plate in what is referred to as a subduction zone. However, this one was a huge intraslab quake which resulted in breaking a plate in two. This means there is now a greater risk for more earthquakes along this fault line.

Defiant Energy Policy of Mexico’s President-Elect Rattles Moody’s and Fitch

October 24, 2018

Defiant Energy Policy of Mexico’s President-Elect Rattles Moody’s and Fitch

But it’s going to be tough; he’ll need more than luck to pull it off.

Moody’s has rated the $2 billion of senior unsecured notes due 2029 that Mexico’s state-owned oil company Pemex is in the process of issuing one notch above junk. Pemex is offering to pay a coupon interest rate of 6.5%. In its report on Friday, Moody’s blamed the company’s “weak liquidity, a heavy tax burden and the resulting weak free cash flow, high financial leverage and low interest coverage; and challenges related to crude production and reserve replacement.”

Moody’s is also worried about the large amounts of debt coming due in 2020 and beyond. And Pemex will continue to be “dependent on debt capital markets to fund negative free cash flow,” it said.

Fitch Ratings downgraded the outlook for Pemex’s debt from stable to negative amid concerns about the incoming government’s proposed energy policies. It rates Pemex three notches above “junk” (BBB+), but only because the company is state-owned. Its standalone credit profile — if Pemex were not backstopped by the Mexican state — is junk, seven notches into junk (CCC).

Fitch has also warned earlier that if Pemex’s credit rating drops, so, too, will Mexico’s sovereign debt rating. Even a small deterioration in credit risk could exact a heavy toll on both the company and the country.

The outlook revision to negative from stable “reflects the increased uncertainty about Pemex’s future business strategy coupled with the company’s deteriorating standalone credit profile,” Fitch said in its report.

Fitch’s downward revision was cited by analysts as one possible factor in the fall of the peso last week to its lowest level in over a month. CI Banco analyst James Salazar said that Fitch’s Pemex assessment is a reminder that the company’s “finances should continue to be handled with great caution so as not to cause additional imbalances that will increase its debt.”

…click on the above link to read the rest of the article…

Category 3 Hurricane Willa Makes Landfall In Mexico Tonight – 500,000 Tourists In Path

October 24, 2018

Category 3 Hurricane Willa Makes Landfall In Mexico Tonight – 500,000 Tourists In Path

…click on the above link to read the rest of the article…

Big Oil Cheers Trump’s ‘New NAFTA’ But Mexico Could Complicate Things

October 18, 2018

Big Oil Cheers Trump’s ‘New NAFTA’ But Mexico Could Complicate Things

While the oil and gas industry has lauded the new trade deal that may soon replace the North American Free Trade Agreement (NAFTA), a provision added by Mexico, along with its new president’s plan to ban fracking, could complicate the industry’s rising ambitions there.

The new agreement, known as the United States–Mexico–Canada Agreement (USMCA), has faced criticism as being tantamount to NAFTA 2.0 — more of a minor reboot that primarily benefits Wall Street investors and large corporations, including oil and gas companies.

Mercilessly critiqued by then-candidate Donald Trump during the 2016 presidential campaign, NAFTA is now the second major trade deal kicked to the curb by now-President Trump. The other, the Trans-Pacific Partnership (TPP), was canceled days intoTrump’s presidency.

After the most recent deal’s announcement, the oil and gas industry offered praise for USMCA. The White House even pointed this out in a press release, highlighting a quote given by the U.S. industry’s major trade group, the American Petroleum Institute (API).

“We urge Congress to approve the USMCA. Having Canada as a trading partner and a party to this agreement is critical for North American energy security and U.S. consumers,” said Mike Sommers, President and CEO of API. “Retaining a trade agreement for North America will help ensure the U.S. energy revolution continues into the future.”

In its own press release declaring its support for USMCA, API further spelled out the parts of the deal it supports.

Those include “continued market access for U.S. natural gas and oil products, and investments in Canada and Mexico; continued zero tariffs on natural gas and oil products; investment protections to which all countries commit and the eligibility for Investor-State Dispute Settlement (ISDS) for U.S. natural gas and oil companies investing in Mexico…

…click on the above link to read the rest of the article…

Oil’s $133 Billion Black Market

October 14, 2018

Oil’s $133 Billion Black Market

Oil is still the world’s leading energy source, with growing demand, a fluctuating pricing system, and much of its production in volatile regions. The oil market’s value is larger than the world’s valuable raw metal markets combined, with an annual production valued at US$1.7 trillion. A flourishing black market is no surprise, with about US$133 billion worth of fuels stolen or adulterated every year. These practices fund dangerous non-state actors such as the Islamic State, Mexican drug cartels, Italian Mafia, Eastern European criminal groups, Libyan militias, Nigerian rebels and more – and are a major global security concern.

The top five countries accused of oil trafficking – Nigeria, Mexico, Iraq, Russia, and Indonesia – are also producers. It is estimated that Nigeria alone loses US$1.5 billion a month due to pipeline tapping, illegal production and other sophisticated schemes. In Southeast Asia, about 3 percent of the fuel consumed is sourced from the black market, estimated to be worth up to US$10 billion a year. In Mexico, drug cartels launder drug revenues through the oil trade

Other countries are not immune. Turkey is not an oil producer yet serves as a major transit route for hydrocarbons flowing to Europe from OPEC countries like Iraq and Iran. As an energy hub, Turkey is strategically situated for the illegal trade and lost an estimated US$5 billion in tax revenue in 2017. An uptick in smuggling oil and other refined products began 2014, when ISIS took control of major Syrian and Iraqi oil fields.

As with most commodities, the volume of oil smuggling is primarily linked to fluctuating prices. With climbing oil prices, illicit trade is expected to increase.

…click on the above link to read the rest of the article…

USMCA: New Economic Alliance Formed to Isolate China

October 6, 2018

USMCA: New Economic Alliance Formed to Isolate China

The almost 25-year-old North American Free Trade Agreement (NAFTA) has been relegated to the dustbin of history. The United States, Canada, and Mexico have agreed on a trilateral trade deal — the United States-Mexico-Canada Agreement (USMCA) — to replace it. As expected, the agreement finalized on Sept. 30 is intended to stimulate production in North America and deter outsourcing to low-wage countries in Asia. Imports from other states are being penalized. The timing is perfect. Now President Trump can tout the USMCA as a win just as the November midterm elections are drawing near.

The USMCA contains a special clause that gives Washington a near-veto over any attempt by Canada or Mexico to make deals with China. It stipulates that if one of the three were to sign a free-trade agreement with a non-market country, either of the other two would have the right to terminate the trilateral USMCA with six months’ notice and form its own bilateral deal on the same terms. As a result, Canada and Mexico cannot act as back channels to ship products tariff-free to the United States. The US and the EU have not recognized China as a free-market economy. Neither has the WTO.

This is a major threat to Beijing’s position within the global trading system. China is Canada’s second-largest trading partner and Canada is China’s 13th largest. What this agreement actually is is a forerunner to an economic and trade alliance created in opposition to Beijing. Once it takes effect after being approved by parliaments and Congress, the USMCA will be the first step in an anti-Chinese global campaign, to be followed by other deals aimed at the same goal. Evidently the US is going to insist that a similar clause be inserted into other trade accords, particularly the ones being negotiated with the EU and Japan, plus the one it is trying to develop with other nations of Asia-Pacific region.

…click on the above link to read the rest of the article…

President-Elect of Mexico’s Bombshell: Economy in “Situation of Bankruptcy”

September 25, 2018

President-Elect of Mexico’s Bombshell: Economy in “Situation of Bankruptcy”

And why are Bank of Mexico executives and employees resigning in droves?

Around 200 central bank employees, including 20 senior executives, have left their posts at the Bank of Mexico (Banxico) since presidential elections on July 1 handed a resounding victory to populist Andrés Manual Lopez Obrador (or AMLO). Unsurprisingly, their sudden departure has a lot to do with money.

One of AMLO’s manifesto pledges was to slash salaries for senior government officials and bureaucrats as part of sweeping cost-cutting measures. So far, he’s kept to his word. Last week, Congress, now under the majority control of his party, Morena, passed a law that will make it impossible for any state employee to earn more than the president. The gross monthly salary of the current president, Enrique Peña Nieto, is 209,135 pesos ($11,700). AMLO has pledged to cut the salary in half when he takes over the post on December 1.

The law will come into force in January and will apply to all three federal branches of government as well as regional and local government institutions. This could be a major problem for employees of Banxico, since all of them are considered public officials and many of them earn more than the current president. The average monthly salary of a Banxico board member is 365,000 pesos ($19,400), around 70% more than Peña Nieto’s and over 230% higher than the salary AMLO has pledged to pay himself.

Banxico has refused to comment on the matter but it’s safe to assume that the gathering exodus of central bank employees has at least something to do with AMLO’s plan to slash their salaries. Mexico’s central bank workers, it seems, are less enthralled by the austerity principle when it’s applied to their own income rather than others’.

…click on the above link to read the rest of the article…

Mexico’s Central Bank Just Broke with the War on Cash

September 3, 2018

Mexico’s Central Bank Just Broke with the War on Cash

Motivated by inflation?

A strange thing just happened in Mexico. The Bank of Mexico (Banxico), announced that it is considering launching a 2,000 peso note (ca. $105), double the highest denomination note currently in circulation. It’s also considering doing away with Mexico’s lowest denomination 20 peso bill (ca. $1.05), which will be replaced by a coin with the same face value.

Not everyone’s happy about the proposal, which forms part of a range of measures aimed at updating Mexico’s currency notes. Miguel González Ibarra, director of the Center for Financial Studies and Public Finance of the National Autonomous University of Mexico, said that introducing a higher denomination bill flies in the face of the broad trend among advanced economies to weed out such notes.

In 2016 Peter Sands, the former CEO of the British bank Standard Chartered, set the tone of the debate when he published a report for Harvard Kennedy School of Government imploring central banks around the world to stop issuing high-denomination notes and bills. They include the €500 note, the $100 bill, the CHF1,000 note and the £50 note. This is the first rule of the war on cash: make high-denomination notes taboo in law-abiding circles.

“Such notes are the preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved,” the report warned. In other words, only criminals use cash. High-denomination notes, the report added, “play little role in the functioning of the legitimate economy, yet a crucial role in the underground economy.”

…click on the above link to read the rest of the article…

Inflation Has Run Amok – Danielle DiMartino Booth

August 30, 2018

Former Fed insider Danielle DiMartino Booth is sure the Fed is going to raise interest rates again at the September meeting. Why? DiMartino Booth explains, “I think he’s (Jerome Powell) the most independent Fed Chair in the past 30 years, and I think he’s going to raise rates regardless of what is happening in politics. . . . You don’t kowtow to political pressure when you need to do right by the economy. . . . Powell thinks the inflation numbers are under-reported. He’s listening to companies saying their profit margins are being squeezed . . . non-labor costs are outpacing labor costs by the greatest extent in three years, and what that tells you is inflation has run amok. . . . I think the Fed is going to continue to raise rates. . . . I think the markets have priced in the (September) rate hike by 90%. We may be looking forward to Jay Powell backing off come December. So, I am not really worried right now about a skyrocketing dollar.”

DiMartino Booth points out the biggest problem the world faces now is record global debt near $250 trillion “that few can conceive a workable solution.” Di Martino Booth says, “It really does keep me up at night because of the nature of debt. As we approach the 10 year anniversary of Lehman Brothers, the one takeaway that many have forgotten in the decade that has passed is that you don’t know where the true ticking time bomb is when there is an over-indebted problem. . . . When systemic risk is released, it cannot be contained by any higher authority and potentially be unleashed. The greatest peril of debt is we don’t know where the danger truly lies until something triggers it.”

…click on the above link to read the rest of the article…

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