At its AGM on 17 May, Fresnillo says it is not responsible for the irregular occupation of the lands and violence in the ejido of El Bajío, Mexico.
For background, see Mexican delegation visits London to attend Fresnillo AGM.
This was Fresnillo plc’s fourteenth AGM in London and the first with Alejandro Baillerez as Chairman. He paid tribute to the former president, his father (which makes the company seem rather like a monarchy). This was our first participation and it was, in fact, a hybrid meeting, so the shareholders were also able to participate online.
Alejandro Baillerez introduced the board and those who were present in the AGM. However, none of them intervened in the meeting. The CEO of Fresnillo Plc, Octavio Alvidrez, was the person who had to answer all our questions. Alvidrez has been Executive Director since 2012, so he must know very well the history of El Bajío.
After introducing the board, Alejandro Baillerez invited the Fresnillo secretary, who read the code of conduct for the meeting. The secretary forcefully stated that the conditions of behaviour were very clear, and that any inappropriate behaviour could cause people to be ejected from the meeting. We wonder if this intervention was linked to our presence in the room.
With this wake-up call, Alejandro Baillerez started to read the tribute to his father, which went something like this “… I am happy to introduce myself today as the chairman at my first Fresnillo AGM. I wish I could start contributing to the memory of the former chairman of Fresnillo, my Father, Alberto Baillerez. Alberto was an incredible man, he contributed a lot to the development of Fresnillo and as his son I will continue his legacy. Creating a strong and fruitful company, my purpose is to contribute to the well-being of people through sustainable mining. Since 2021 our challenge and purpose has been that. My purpose as chairman has been to contribute to people and communities in these difficult times. As we anticipated before, the pandemic produced some changes in our activities in 2021. The new labour law has generated changes and challenges, especially in our underground mining operations. The safety and well-being of our people is our priority and our COVID protocols have contributed to not spreading COVID within our workers. However, this has had an impact on our production. Another challenge that the labour reform in Mexico has presented has been in relation to the subcontracting of workers, which has been affecting operations since September 2021. As a result, we have internalised the need to increase the hiring of our workers. Despite all the challenges we have faced during the year 2021, we have had a great performance…”.
This introduction led to a connection with the large sums of money and production that Fresnillo Plc obtained last year. Climate change was mentioned somewhere in his speech, but without much enthusiasm.
At the end of his emotional and “enriching” speech, the chairman gave way to the space for questions, asking those who had questions to raise their hands, go to the microphone and begin by saying their name.
The first one to raise his hand was Richard Solly, co-ordinator of the London Mining Network.
Richard Solly: Thank you, Mr Chairman, my name is Richard Solly. I am co-coordinator of London Mining Network. My question concerns the community of El Bajio in Sonora, Mexico. Grupo Fresnillo operated the Soledad-Dipolos mine from 2009-2013. Company operations were on the lands of ejidatarios, who have particular rights under Mexican agrarian law. These lands belong to a group of people who have rights over the use of common and family plot lands. I understand that Grupo Fresnillo, through the Penmont Company, conducted operations on these lands without the requisite permissions. There appear to have been many irregularities in how the Soledad-Dipolos mine operated.
- Has the company reported these irregularities to investors?
Alejandro Baillerez: Thank you, before we start, I would like to let you know that at Fresnillo Plc, we operate all our business by the rule of law, very strictly, and one of the most important priorities in our business is our relationship with our communities. I want to give Octavio the floor to enrich the answer to the question.
Octavio Alvidrez: Thank you Richard for your questions. I think it is a good opportunity to give an overall picture of all our programs that we have, not only about the community of El Bajío in Soledad-Dipolos area. The relationship with our communities is central to the operations of Fresnillo plc mining activities. We have had these for many years and I would like to give you these problems that we have.
We have been providing activities to improve the quality of education, with programs to educate children, community members and employees. A well-educated community is one we can have dialogue with.
We are also assisting health and wellbeing, one of these examples was during the pandemic. In the pandemic, we brought vaccinations to the communities as well as to our employees. We are well-regarded. This program helps us to face the pandemic.
We are also providing water access for communities where there is a lack of water. One of these examples is in the San Julian Mining. We have twenty communities around our operations now that have safe water to drink.
The other one is that we are providing capacity-building. We believe that once the mining activity is not there we need to build this capacity so the community will be successful after the mining activity, so that when our activities are finished, the communities will have economic life.
We have exploration activities in Mexico, Chile and Peru. We will start bringing these programs, because there are our first employees in the area, and this is very important. Then we have more ore mines to be discovered to bring also these programs with the people that we negotiate access to land.
About your specific question, in 2013 there was a legal case against Fresnillo. Fresnillo immediately gave the ruling first to Fresnillo Plc, we immediately complied with the judgement and returned the land to its owners, the agrarian community. This case was brought by some members of an agrarian community. Since then, there has been no mining or exploration in the area. We have also reclaimed part of the area, because there is another legal process, not the one we have referred to, the one we returned the land to immediately. This legal process covered another area and is still going on. We have not done any activities there but we reclaimed the area, as well. We are subject to some of the violence, which is somewhat widely spread. Our employees and also company members have suffered this kind of violence. We complied 100% with the ruling and returned the land in 2013. In the area of Soledad-Dipolos, there is a good productive relationship with two other agrarian communities. One is “Los Norteños’ ‘, the other one is “El Indio”, “Juan Alvarez”. Not only have we been able to conduct mining for 25 years but have expanded our activities based on good relationships. Thank you Richard.
The second person to raise his hand was Bartolo Pacheco, an ejidatario from El Bajío.
Bartolo Pacheco: Hi, I’m Bartolo Pacheco, I’m a member of Ejido El Bajío. The company arrived in 1994 and requested permission to explore our lands, but with that same permission it began to exploit illegally. That is where the conflicts we have experienced began. I worked with a contracting company that works for Fresnillo as exploration, but they fired me from my job because I was defending my territory. In 2016, I was unjustly imprisoned with 4 other colleagues for 8 months. This imprisonment was unjust because they accused us of dispossession. The person who accused us of dispossession was Rafael Pavlovich. The mine accused us of theft and unfairly criminalised us. When we were released from prison, we began to face harassment, threats, and harassment by police officers who are related to the mining company. We have been threatened with death. After we were released from jail, two community leaders were assassinated months later. Recently, on April 30, 2021, two other members of the community were murdered.
- Why do we have to face this excessive violence by Grupo Fresnillo?
- Why are we being killed and displaced for defending our territories?
Octavio Alvidrez: Thank you Mr Bartolo. First, Fresnillo Plc categorically denies that it was involved in any of the activities that you mentioned at these events. It saddens us to hear their story and it saddens us to see violence in the area where we have mining activities. When I mentioned that we returned land in 2013, I mentioned that it went to a group within El Bajío, an agrarian community, and there is not always agreement within the community. We know that there are two factions within the community that are fighting each other, there are agrarian complaints and criminal complaints between them. You mentioned another actor. We read about this in the newspaper about the events you described and we were saddened by it. We have sympathy for that. Our employees and our company also suffer from this violence in the area. We categorically reject the notion that we are involved in these events.
The next question came from Sergio García, the legal representative of Ejido El Bajío.
Sergio García: Hi, I’m the lawyer, Sergio Garcia Camacho, legal representative of Ejido El Bajío, Sonora, Mexico. My presence in this space is due to asking you investors if you are aware of the current legal status of 69 agrarian lawsuits, where the Penmont mining company, owned by Grupo Fresnillo, is being sued and sentenced in relation to the Soledad-Dipolos and La Herradura mines. settled in the territory of the Ejido El Bajío.
- The 69 lawsuits cited were presented before the agrarian court No. 28 with residence in the city of Hermosillo, Sonora, Mexico. The Fresnillo Group has been sentenced to immediate unemployment and delivery of all the gold to the Ejido since 2011. This sentence was established in file 188/2009. For not complying with this court order, the mine was evicted by the public force by the court. El Ejido El Bajío remained as judicial depositary of the land, while the other points of said sentences were considered fulfilled.
- Fresnillo has not returned to El Bajío the gold stolen during its illegal occupation, despite being sentenced to do so in 67 of the aforementioned sentences.
- Fresnillo has not repaired the environmental damage caused to the fauna, flora and the entire ecosystem of the territory of Ejido El Bajío nor has it paid the rent to its ejidatarios for the damage caused by illegal occupation despite being condemned for all of this in the 67 aforementioned lawsuits.
- Why has the Fresnillo Group not respected the sentences, and evaded the law?
Octavio Alvidrez: Sergio, you need to be more precise in the arguments you present. The mining concessions in Mexico provide the opportunity to exploit and also to mine at the same time. Formerly, the law allowed exploration first and then you had to apply for a concession to mine. The law is different now. But we do comply with mining law and environmental permits. There is no possibility of mining without complying with environmental permits. In Soledad-Dipolos, we complied 100% with the law and now there is no mining in the area of Soledad-Dipolos. Other land is not subject to mining, only exploration. The legal process is still going on but we have complied with all the contract commitments we signed with El Bajio.
After Fresnillo’s response, where they say that they have complied with all the sentences, Miguel Jimenez of London Mexico Solidarity asked his question.
Mijael Jimenez: I am Mijael Jimenez, I am part of London Mexico Solidarity, and I would like to ask Grupo Fresnillo about the disappearances, kidnappings, assassinations of local leaders and violence in the territory where the Soledad – Dipolos mine operated.
Four members of the community of the ejido El Bajío have been killed. Before they were killed, these community leaders had direct conflicts against the Penmont mining company and Rafel Pavlovich.
- What is the position of Fresnillo Group about the murders in the sector where it operated illegally?
- Has the Fresnillo Group made any statement about the killings and the forced disappearance?
- Has the Fresnillo Group informed the shareholders about the disappearances and killings in the sector where it intends to start operation in 2023?
Armed men and harassment of social leaders by people linked to the company have been witnessed by the community.
- Does the Fresnillo Group state that it has connections with the people who are threatening the community?
Alejandro Bailleres: We are not mining illegally, we are not mining in that area and we are not connected to the killings.
Octavio Alvidrez: I will give the same answer I gave to Bartolo. It is the same response, we show empathy with the situation. We categorically deny involvement in these events. I would like to invite you in the London Mining Network to be involved in a more clear and deep discussion and transparency within the El Bajío agrarian community, because there is part of the information that you have missing. It is important for LMN to seek more information and discuss more openly with the community what is going on.
The next question came from Jesus Thomas, one of the main plaintiffs against the Fresnillo Group’s Penmont mine.
Jesus Thomas: Hi, I’m Jesus Thomas, a member of the Ejido El Bajío community. I would just like to be more precise about what Mr. Alvidrez has said. I believe that Mr. Alvidrez is not answering what has been asked. To begin with, there are 67 sentences that cannot be changed, they cannot be modified, they are irremovable sentences, in these sentences it is condemned to return the gold extracted illegally by Minera Penmont. At this point, we’re not just talking about the land that they used illegally, we’re talking about returning the gold. The common property lands are owned by the ejido El Bajío. There is another trial from 2019, where you claim ownership of 531 hectares, but I remind you that there is a ruling that declared that title null and void, because it is flawed from its origin, so it is important to note that you do not have any property. Another point that I would like to clarify is that the mine did have operations illegally, on November 25, 2018, supported by the federal police, they were there for many months, until they were evicted on March 16, 2020. I think not is not responding to any of the questions that have been asked. Perhaps your lawyers are not well informed about the real situation. The sentences are immovable, they cannot be changed.
- Why does Fresnillo evade Mexican justice? There are 67 sentences. You had the opportunity to defend yourself in court, but you were defeated by the community of El Bajío. Failure to comply with the sentence has caused an increase in violence, it has brought us two disappeared people, people tortured. I’m not blaming Fresnillo, because I can’t, but we already have four people dead and twelve people incarcerated. Of the people imprisoned, I can blame Grupo Fresnillo, because you have been the ones who have accused us of theft. I had a prison order for twelve months. Of the unjust incarcerations if I can blame Fresnillo and for that I blame them.
Alejandro Bailleres: We are really sorry about the deaths and other things you mentioned. We had nothing to do with it. I ask Octavio to answer that and after this question we need to follow with the formal meeting.
Octavio Alvidrez: Fresnillo is a public company listed in The London Stock Exchange and we comply with the law because it is the law and because of the ethics of it. We comply 100% with the legal process. We have mining concessions, we carry on activities in good standing in Mexico, Chile and Peru. When we have final judgements we comply with them. In 2013 we handed back the land.
Alejandro Bailleres: I would like to continue with our meeting, because we are spending so much time on this matter.
Despite this, Javiera Martínez from London Mining Network raised her hand for the last question.
Javiera Martínez: I’m Javiera Martínez, Latin America coordinator for the London Mining Network. I want to ask about Grupo Fresnillo’s Intentions to return to reopen the mining in Soledad-Dipolos by the year 2023. Since operations stopped, the company has commented on its intentions to re-exploit the territory. However, according to the 2014 sentences, this action would be illegal, since the company does not have the right to use or exploit in the ejido. The sentence obliges the company to evict and totally stop all activity within the lands of the El Bajío ejido. However, according to Fresnillo’s 2021 report, the company presents graph (1) showing the intention to re-establish operations in Soledad-Dipolos by 2023.
- Why does the company insist on starting operations in the Ejido El Bajío, since this action is against the law?
According to Fresnillo’s annual report, the company states that legal action to resume operations at Soledad-Dipolos is expected to favour the company.
- Why does the Fresnillo Group insist on a speech, since it has been legally proven that they do not own the land? The sentence forces them to restore the territory in the Bajio.
- What is the plan for restoration and repair of the territory? When will the restoration plan begin?
Octavio Alvidrez: Mining concessions are Fresnillo plc for 50 years and are renewable for 50 years so there is the possibility to return to the land legally as many concessions belong to Fresnillo plc.
At the end of the answers from Octavio Alvidrez, the chairman Alejandro Bailleres moved to the formal business of the meeting. The board was reappointed and in less than ten minutes the meeting was closed.