Costa Rica copper explosion highlights regional rise in theft and smuggling

A copper smuggling ring in Costa Rica was stealing tons of metal from the country’s power and telephone wires to send to Asia, the latest example of how this crime is gradually becoming more sophisticated.

On March 29, Costa Rican authorities carried out raids in various towns, arresting 18 people, including the suspected leader, a Taiwanese national who had lived in Costa Rica, La Nación newspaper reported. The total weight of recovered copper exceeded 1,500 kilograms.

The modus operandi of the organization involved several stages. According to La Nación, a segment of the organization undertook the theft of cables and transportation to a collection center outside the capital, San José. The copper was then mined, processed and baled for transport on freighters.

The group was able to export more than 70 containers of 20 tons of copper each, reaching a value of more than 210,000 dollars each. The alleged destinations of the products were China, Japan, Malaysia, Hong Kong and Indonesia.

SEE ALSO: Coverage of Costa Rica

Most of the copper recovered during the operation belonged to the Costa Rican Institute of Electricity (ICE), according to a press release from the public electricity supplier. In addition to the financial losses suffered by suppliers, the theft of copper has left hundreds of thousands of people without electricity or telephone services, OIJ Director Walter Espinoza told reporters.

Costa Rica differs from its South American neighbors in that it does not have domestic copper processing companies or factories, according to La Nación. Nevertheless, Costa Rica has seen an increase in cable theft in recent years. In 2020, losses totaled nearly $2 million due to cable theft and hundreds of miles of telephone wires were rendered unusable in 2021, according to ICE.

Authorities in Costa Rica have already sounded the alarm over gangs stealing copper for export to Asia, and the latest case confirms their concerns.

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Copper theft has plagued Latin America for decades, but organized supply and distribution networks to steal and export copper have grown enterprise-wide in recent years.

In Costa Rica, groups dedicated to copper theft began to disguise themselves as technicians, driving falsely labeled ICE trucks and wearing similar clothing to avoid suspicion. Thieves even forge official permits to assuage the concerns of neighbors and businesses. In the most recent collapse, officials uncovered large-scale copper mining and packing operations, indicating criminals were getting more creative with theft and increasing the amount of copper they transported.

The increased demand for copper fueled the illicit trade in the metal. While a kilogram of copper sells for around $6 in the domestic market, the payment is much higher in Asian countries. And despite an initial drop in demand for copper at the start of the pandemic, global prices have since risen steadily and reached an all-time high in March 2022. The lucrative market encourages a higher level of organization and logistics to those of petty street thieves.

However, copper theft has become more sophisticated in Costa Rica and throughout the region. In recent years, Chilean authorities have uncovered a series of large-scale illicit copper shipments in its ports. The most recent was in February 2022, when authorities discovered 12 tonnes of copper heading for South Korea. There have been dozens of coordinated thefts in trains carrying tonnes of copper to remote parts of Chile.

SEE ALSO: Chile’s copper theft epidemic likely fueled by Chinese demand

Argentina and Uruguay have also seen massive spikes in copper cable thefts from electrical and telecommunications infrastructure. Large-scale organized theft is beginning to characterize typical copper theft in countries, such as 300 Argentines participating in the mass mining of underground telephone wires.

Even in Colombia, companies have reported millions of dollars in lost revenue due to the theft of network infrastructure such as tubes, cables and copper covers. El Nuevo Siglo reported that multi-pronged criminal networks were dismantling wiring in Bogota neighborhoods and then transporting it to scrap metal.

The Costa Rica case underscores the increased sophistication of copper theft throughout Latin America. If copper prices remain high globally, the illicit market for the metal is unlikely to shrink.

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