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Colombia in 2016 created a special miliary brigade to fight against illegal mining. Today, illegal mining is more profitable in Latin America than drug trafficking. (Photo: Colombia Government)
Wednesday, January 31, 2018

Latin America: Illegal Mining Spreading

Organized crime and illegal gold mining in Latin America.


Illegal mining is quickly expanding across Latin America. The increasing demand for copper, tin, tantalum, tungsten, but mainly gold, has multiplied the emergence of heavy mining machinery that—without permission and sometimes on a large scale—operates in remote corners of the regional geography, including at least 80 natural protected areas and buffer zones, according to the NGO Peruvian Society of Environmental Law (SPDA).

Successfully defining illegal mining is the first challenge. There are those who exploit mineral resources without permits (a mining concession contract or an environmental license) and that make up a very diverse group that demands different strategies. And although in practice, as the expert Luis Alvaro Pardo points out, states like Colombia do not make a real distinction between informality and illegality, it is crucial to clarify terms prior to finding solutions.

Those who are engaged in some way in the regulatory process are often called informal miners—a label that includes those who extract minerals as a craft, without using proper machinery or technology and in very precarious conditions—or those who operate on the margins of state control. Other mining activities, however, cannot be regularized because they are intrinsically associated with illegality. Some are even linked to criminal groups that do not hesitate to use violent methods such as extortion, threats or mineral extraction in forbidden areas.

The so-called “war on drugs” launched by the United States, and the drastic increase in the price of gold (between 2002 and 2012 gold increased by 500 percent worldwide) have made illegal mining one of the most lucrative businesses in the region.

Today, illegal mining, and especially gold mining, is more profitable in Latin America than drug trafficking. Colombia’s own president, Juan Manuel Santos, said, “criminal mining is more lucrative than drug trafficking.” According to government estimates, the industry generates about $2.4 billion a year in Colombia.

And although illegal mining is not new, its recent rise has made it a serious regional threat. “Latin American states have not reacted in time,” says the economist Pardo. “When they finally realized the situation they found a gigantic problem beyond the existence of informal or illegal miners. It was a challenge of public order.”


To combat illegal mineral plundering, many states have opted for the burning and destruction of machinery. However, for experts like Julia Cuadros of the Peruvian NGO CooperAcción, the reconfiguration of the mining map in Latin America responds to another factor: the generalized lack of state support to generate alternative development opportunities in the communities. “Small-scale and artisanal mining has become a survival activity for many people displaced by violence, or who have lost their jobs due to privatizations and changes in labor regulations,” notes Cuadros. “These small miners must be given economic alternatives: you repress them here and they will go somewhere else.”

The increase in the use of materials such as mercury and higher levels of gold exports are evidence of the uncontrolled mining boom.  That boom and the damage it is causing on the environment and on society generally demand the effective policies that better monitor and track mineral extraction and regulate informal miners. “Formalizing the activity should not be limited only to authorization by states, but to prevent mining from generating environmental and social impact, as well as to eradicating related crimes,” says environmental expert César Ipenza.

The clandestine extraction of minerals is a quick shortcut for criminal groups to launder money. But even worse, illegality too-often overlaps with violations of human rights.  Trafficking in persons, sexual exploitation, child and adolescent labor or loss of food sovereignty as a result of the abandonment of agricultural activities are just some of the direct consequences of illegal mining. There has also been an increase in violations of women’s rights: intra-family violence and economic dependence have increased because mining is a predominantly male activity.

According to the Global Initiative Against Transnational Organized Crime, Latin America leads the world in the illegal extraction of gold. Venezuela leads the ranking with about 90 percent of gold mined illegally, followed by Colombia with 80 percent, Ecuador with 77 percent and Bolivia and Peru, which hover around 30 percent.

Although illegal mining is a regional phenomenon, it does not affect all states equally. “In the Amazon region, all countries are at risk,” says Cuadros. Deforestation of many protected forests, and the damaging of important water sources, along with mercury as the chemical used to separate gold, adds to the pollution problem. It is estimated that for each kilo of gold produced, about 1.3 kilograms of mercury are released that pollute water sources and human populations that consume water and fish.

The European Union and the United States banned the export of mercury to the region about seven years ago, and the Minamata Agreement, approved in September 2017, limited imports and exports to the states. However, despite international attempts to obstruct the illegal acquisition of mercury and prohibitions of its use in countries like Ecuador or Venezuela, mercury traffic, especially in border areas, is not yet controlled. “Great gold mining has as its by-product mercury, which must be properly disposed of,” says Ipenza. “This could really stop the advance of illegal mining." 


Colombia and Peru are two of the countries most affected by illegal and informal mining. “The Colombian state has avoided legalizing informal miners because it has the erroneous view that mining should be done by large companies,” says Pardo,” even if they are responsible for enormous and irreversible environmental, economic and social damage.”

A part of the illegality problem in Colombia is allied with criminality. The first red flags that identified the link between armed groups and illegal mining were raised back in 2011 through a report by the Colombian Security Service that warned that 50 percent of the mines in the country were illegal, with armed groups dominating many of them. These organizations may be guerrilla groups (according to Pardo, he has found no evidence that they participate in production, but merely collect a “tax”) or paramilitary groups or mafias.

About 87 percent of the more than seven million internally displace people (IDPs) in Colombia come from areas where there is ongoing illegal mining. According to the NGO Global Initiative, these bands often force villagers to work in the mines or demand payment of high taxes to traditional miners.

In Peru, the world’s sixth gold producer, the state has warned that there is ongoing illegal and informal mining in all its regions with at least 150,000 to 400,000 workers in these illicit operations. The best example is the jungle area of Madre de Dios, where almost all gold is extracted illegally.

Government initiatives to curb trafficking of minerals have forced group to open up new to routes to transport their product, which have affected bi-national ecological corridors such as Vilcabama-Amboró (Peru-Bolivia).  The corridor includes one of the most bio diverse areas in the world, making of Bolivia, Chile, Brazil or Ecuador the pathway countries to export illegal gold.

In Bolivia there are between 1,000 and 4,000 mining cooperatives, although there are only about 500 registered, according to data from SPDA. SPDA has issued warnings that Bolivia’s “legal mining enters illegal marketing circuits permanently.” And although this market is difficult to track, Global Initiative estimates that at least 68 tons (about $3 trillion) of illegally extracted gold from the Amazon region and the northern border with Peru have managed to leave the country.

In Mexico, illegal mining is partially linked to drug cartels, which have found in the sector an additional way to launder drug dollars and an important source of income. Cartels like that of Sinaloa, Los Zetas or the Templar Knights have control over mining zones and demand payments to workers and companies. According to a 2012 Attorney General’s report, these organizations charge companies from $11,000 to $37,000 a month to allow them to operate in their territory. 

Other affected countries are Guyana, Nicaragua and Guatemala. Illegal mining is also notorious in Brazil, where gold and precious stones are the mainly extracted materials. “Here a very serious conflict emerged over the control mechanisms that the government has attempted to establish, burning down government structures,” says Ipenza, who points out that Brazilian control has been weak and public policies have been contradictory. In contrast to Brazil, experts say there is no illegal mining in Chile, though it is used as a transit zone for gold.


The gold route’s economic chain is quite convoluted, and its traceability is complex. The eruption of criminal groups in the mining industry has forced the Andean countries to sign different supranational agreements to destroy machinery, for example, in order to hinder the illegal expansion of gold mining. Although countries such as Peru, Bolivia, Ecuador, Colombia, Brazil, or Guyana have advanced national legislation and established penal sanctions for illegal mining, illicit activity continues to advance. “It is already a global phenomenon,” says Cuadros. Even the presence of Chinese, Korean, Italian, or Russian mafias has been detected in the region.”

Latin America is the region with the highest rates of illegal gold mining in the world. “States do not hold territorial control and are overwhelmed by criminal or illegal organizations. In addition, these countries have very serious corruption problems,” says Pardo.

But the transit of illegal gold cannot be fully understood without understanding the role of the importers. Although the European Union passed a law prohibiting the purchase of minerals from conflict zones in mid-2017, other foreign buyers fail to comply with international recommendations aimed at curbing illegal mining and human rights violations. “In recent years, new markets—such as China, India, Dubai or Hong Kong—have appeared and they are not responsible or aware of these activities and do not always ask for certification of origin or track the gold they buy,” says Ipenza.

Another link in this chain is the number of companies dedicated to the sale of minerals that do not adhere to the UN Guiding Principles on Business and Human Rights and have yet to put in place means to map supply chains and the origin of gold. “Amphibious companies are created all across the region, where part of their production is tucked in the producing areas. There they buy gold from anyone willing to sell without knowing the source,” says Pardo. Specialized organizations call for the prosecution and punishment of any company involved in any illegal activity at any stage.

For Cuadros, the root of the problem is the liberalization of mining: “The sale and exploitation of gold have remained in the hands of the laws of the market. It seems that the responsibility of illegal mining is of those who exploit the gold, but the main responsibility relies on the state and its different governments.” 

Eva Brunner and Ricardo Grande are journalists based in Ecuador. This article was originally published January 22, 2018 in Republished with permission from Global Americans.


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