The miners' slogans echo through the central square of Trujillo, on the northern coast of Peru. Many have travelled from Patas province, in the depths of the Andes, where a gang recently massacred 13 guards at a gold mine.
«There is a lot of crime in the mountains,» a man in a white helmet explains to the Economist. In response to the killings, the government imposed a unilateral ban on mining in Patas for a month. But the protesters are demanding they return to work. «The miners of Patas are not criminals. We demand the right to work,» reads a woman's T-shirt.
As the largest gold producer in Latin America, Peru has been hit hard by the wave of violence associated with illegal mining. The company Poderosa reports that 39 workers have been killed in Patas in the last three years.
Since October two group graves have been found there. Still in January, a bomb attack occurred at the prosecutor's office in Trujillo.
The price boom and the shadow of Coke
The chaos, according to the Economist, is fuelled by the relentless rise in the price of gold and the oversupply of coca, a key ingredient in cocaine. What is actually happening is that some gangs now consider illegal gold mining to be a more profitable activity than cocaine trafficking. Since 2008, financial turmoil, geopolitical tensions and increased demand from Asia's middle class have driven up the price of gold, which is reaching historic highs of $3,500 per ounce.
At the same time, coca cultivation in Bolivia, Colombia and Peru has doubled since 2010. As the profitability of cocaine is threatened, gangs are turning to the illicit gold market, with the two activities complementing each other. In the Amazon, coca plantations and illegal gold mines share infrastructure such as airstrips.
Drug proceeds are invested in mining projects, the production of which can be easily laundered and can also be made to appear legitimate.
In Colombia and Peru, gangs are now estimated to earn more from gold than from cocaine. The Peruvian Institute of Economics estimates that the country exported $4.8 billion worth of illicit gold last year, accounting for 44% of total gold exports - up from just 20% a decade ago. In Brazil, the government also estimates that gangs earned more than $3 billion from selling gold in 2022, more than from cocaine.
When criminals become mining contractors
Gang involvement fuels violence and also reinforces authoritarian regimes. Nicolas Maduro in Venezuela allows the army to collaborate with gold-mining mafias in exchange for their political support.
At Colombia's largest gold mine, Burritica, a conflict is unfolding between the Chinese company that operates it and 2,000 miners linked to the Gulf Clan - which stole $200 million worth of gold last year. Since 2019, 18 people have been killed there. In a crackdown in Bolivar province, the same gang killed more than 20 soldiers and police officers. Last month, gunmen also killed 11 soldiers in Ecuador in an operation to shut down an illegal mine.
In Patas, Peru, gangs took over lodges during the pandemic, using paramilitaries as guards, explains Pablo de la Flor of Poderosa. Now, mafias are in full control of the mines. The military operation launched in February 2024 failed to bring peace.
Destruction without weapons
Even when illegal mining is not accompanied by open conflict, it is destructive. Criminals are deforesting the Amazon. By 2018, about 1 million hectares of forest had been cleared; by the end of 2024, the number had doubled.
Mercury used for gold extraction pollutes rivers. Brazilian President Lula is trying to curb the «garimpeiros», the illegal gold miners who flourished under Bolsonaro - but many are moving to Venezuela, where deals with the military are easier.
The Maduro regime's cover-up of illegal mining is provocative, but elsewhere politicians are turning a blind eye. In Bolivia, government support for pseudo-cooperatives expands the black market. These groups, although legally recognized, often mine outside their concessions and violate the law.
President Luis Arce has shown flexibility, and the crisis in foreign currency reserves has brought him closer to the cooperatives. Last year the central bank bought $1.3 billion of gold from them, while the state-owned company Epcoro is accused of laundering illegal gold - something it denies.
The failure of the «regulation»
Peru offers a prime example of the difficulties of regulation. In 2012 it created REINFO, a registry that temporarily allows impunity for unlicensed miners. However, only 2.3% of those who register eventually obtain a license. The program offers little support to those who want to legalize and covers gangs that have no such intention. Parqueros buy or steal documents of registrants to launder their production. «It's a failure,» says Gonzalo Delgado of Pacific University in Peru.
The REINFO was temporary and expires on 30 June, but it is likely to be extended - as it has been in the past, following protests in Lima. A leader of the protests is being investigated for links to illegal mining. In parliament, gangs have allies, making it difficult to push through reforms and forcing the government to resort to emergency measures. Sending troops to Patas, Delgado says, «is a sign of weakness.».
The blood behind the gold
Former Finance Minister Luis Miguel Castilla warns: «I see many similarities with the 1980s, when armed groups controlled large areas of the country.’.
Across Latin America, the fight against illegal mining requires a new model. Redirecting government budgets is necessary: Peru has $73 million this year to fight the narco-trade, but only $17.5 million for illegal mining. But repression operations alone are not enough. Without proper regulation, gangs will continue to move from province to province. And as long as the world is hungry for gold, Latin America will bleed.
Source: naftemporiki.gr
