May 18
The new gold rush — what is the threat?
Every day, tens of thousands of people dig through the earth and riverbeds in search of tiny bits of gold ore. A new gold rush has gripped the world.
A few years ago, makeshift huts set up in the jungle near the Peruvian town of La Rinconada became home to dozens of daredevils from all over the country. When word got out that gold could be found here, amateurs of quick money started arriving: adventurers, debtors, thieves — a wide cross-section of society. The locals call them garimpeiros. There are not many permanent residents here, because the harsh conditions provoke high turnover, but new ones come every day. Regularly come only prostitutes and tool sellers, because they can always count on earnings. There is a pharmacy and even a bar, but the social life revolves around a makeshift gold collection point, which weighs and divides up the found material. Those who are lucky dig up a few grams a day, unlucky ones end up in the ground with a bullet in their backs, because a big find is a big temptation for the others.
If anyone thinks that the gold rush is a relic of ancient times, they are very wrong. Around the world, tens of thousands of people are risking their lives in primitive mines to change their fortunes. The temptation to make a quick buck is stronger than common sense.
Eldorado has more than one name
In Peru alone, there are several hundred illegal gold mines, and the number of self-proclaimed miners fluctuates around 20–30 thousand. They all crowd into wild settlements, usually without a name, located along the 180 km long route between Puerto Maldonado and El Mazuco. The situation is similar throughout the Amazon basin, as South America leads the way in the scale of illegal gold mining. Most garimpeiros hide from prying eyes by carrying canisters of gasoline to the generators that work around the clock.
The village of Ilha Bela, located at the mouth of the Oyapock River between French Guiana and Brazil, has its own legend. Up to 15,000 people work here at any one time. There are stores, hairdressers, pubs and, like everywhere else, lupanars where you can pay with gold nuggets. Workers dressed in torn T-shirts and wellingtons wade knee-deep in mud, digging huge holes in the clay soil that look like bomb craters. The clay is then washed away with mechanical pumps. No one cares about malaria, but the water-filled pits are a breeding ground for mosquitoes. It is difficult to say exactly how much gold is mined here. There is talk of as much as 6–10 tons of raw material per year. The French have recently made a series about this peculiar community called “Gold of Guyana” (Guyane, directed by Kim Chapane). (Guyane, directed by Kim Chapiron).
In Colombia, the guerrillas of the FARC, for whom the gold from illegal mines accounts for 30% of their income, have found business. This is the result of the effective fight against drug traffickers led by the Colombian government and financed by Washington. The actions of destroying coca plantations bring results, so the mafia and guerrillas more and more often take to gold mining. Of course, they don’t do it with their own hands. Abducted children often work in places controlled by gangsters.
The scale of illegal gold mining is striking. The Amazonian Network of Georeferenced Socio- Environmental Information, which brings together environmental organizations from Bolivia, Brazil, Colombia, Ecuador, Venezuela, Peru, Guyana, Suriname and French Guiana, produced a report on the subject in 2018. In it, it identified 2312 illegal gold, diamond and coltan mines in six countries: Bolivia, Brazil, Colombia, Ecuador, Venezuela and Peru. Just five years earlier, Livia Wagner, author of the report “Global Initiative Against Transnational Organized Crime,” alarmed that one-third of the gold exported from Latin America is obtained illegally. The value of this practice was estimated at $6.9 billion. In Venezuela alone, 100 thousand people may be involved in mining and smuggling, and 80–90% of local production comes from illegal mines.
The fact that it fell on South America is not a coincidence.
“There is a lot of unexplored territory there, where there might be deposits, and it is close to North America, where the big mining companies come from. Transport is easier to arrange, and companies don’t have to go through the same scrutiny by environmental departments as they do in their home countries,” says Payal Sampat of Earthworks Action, an organization that monitors the mining industry and leads the “No dirty gold” campaign against buying gold from untested mines.
The problem of illegal gold mining concerns the whole world and appears wherever information about new deposits is confirmed. The recent example of the Democratic Republic of Congo may prove what kind of amok accompanies the gold rush. In March last year, a video surfaced online showing dozens of villagers in Birava rushing to a nearby mountain with shovels and bags to search for gold. When word got out that there were huge deposits of the precious metal, the villagers grabbed whatever they could find and started digging. Some did it in such a hurry that they threw the excavated material into bags, just to sift it at home. As the BBC reported, a mining company came across the trail of the “golden mountain,” but when the information was confirmed, it could not be kept secret. People were pushing and shoving each other, wanting to dig up as much land for themselves as possible.
In Africa, South Africa boasts the largest gold deposits. The criminal syndicates there are called zama zamas, which means “take a chance” in Zulu. According to government estimates, 14,000 people may be involved in criminal activities related to illegal gold mining, and the aforementioned report “Global Initiative Against Transnational Organized Crime” calculates losses from this activity at one billion dollars a year. The further north you go, the worse it gets.
Probably the biggest gold deposit in the world is hidden in Mount Diwata on the Philippine island of Mindanao. People have been coming here looking for adventure since 1982, which is when the first nugget was accidentally dug up. The Philippine government has only recently taken control of the region, and there are several armed groups in the area that aim to secede the province. Neighboring Indonesia, home to Grasberg, the largest open pit mine in the world (second largest overall), also holds its own record. It not only has the largest gold deposit, but also the third largest copper deposit. The mine operates around the clock, which captures the imagination of the locals, who under the cover of darkness try to get a piece of the action for themselves.
One could give dozens of examples of such places. Regardless of the latitude, they all generate a number of serious problems. The gold has to go a long way before it reaches the market, and in many cases it has to be found dead.
It’s not all gold that glitters…
The origins of the gold mining craze lie in the global financial crisis of 2008, which sent gold prices skyrocketing. In the face of huge stock market fluctuations, everyone who could, invested in precious metals, most often in gold. In the record-breaking year 2020, one ounce (31.1 g) crossed the barrier of USD 2 thousand. Today, after slight decreases, it is going up again (USD 1931 per ounce). It hasn’t been this expensive for 30 years.
For the inhabitants of Third World countries, mines are a chance to earn fast money and change their lives for the better. Few think about the dangers associated with this work, although they should, because the consequences of illegal mining are disastrous in many respects. Headlines in newspapers and online portals every now and then report on the death of prospectors who were digging on their own: 200 km from Johannesburg, authorities found the bodies of 20 miners in a disused shaft; on the Indonesian island of Celebes, the ground buried 60 diggers; 20 people lost their lives in an illegal gold mine in the town of Kwekwe in central Zimbabwe; 30 people were killed by a landslide in an illegal gold mine in the Tibesti region of northwestern Chad — these are just a few reports from the past two years.
Nature also suffers from illegal prospecting, as we saw vividly earlier this year. In February last year NASA published a satellite image of the Amazon taken by the International Space Station. Astronauts, flying over eastern Peru, noticed shimmering in the sun corridors that looked like rivers of gold. As it turned out, it was an image of hundreds of pits dug side by side, filled with water in areas of muddy spoil devoid of vegetation. What appear to be rivers of gold in the picture are actually fragments of destroyed rainforest. A sad sight of disaster: desert in the middle of the jungle, heaps of sand, dry trees, dirty ponds. The effect of human activity in this region.
Professional gold mines, operating on the basis of concessions, have adequate technical resources, qualified staff and experience, and they produce with the required technical and environmental standards and respect for workers’ rights. The way illegal prospectors extract gold often resembles 19th century methods. First, the rock and soil are dug up and packed into sacks. These in turn go to a place that serves as a sorting facility of sorts. The earth and crushed rock are placed on large sieves through which water is passed. The fragments remaining on the sieves are placed in bowls and flooded with mercury, because mercury — although highly poisonous — combines perfectly with gold, creating an amalgam. This amalgam is later used to smelt pure gold. The problem is that the process of heating the mercury releases harmful fumes that pollute the air, not to mention the fact that mercury residue seeps into the soil and water. According to the Carnegie Amazon Mercury Project, more than 30 tons of mercury enters rivers and lakes in the Amazon region each year as a result of illegal gold mining operations.
The wealthy use professional equipment such as excavators, water cannons, and boats that suck sand from rivers to explore. However, heavy equipment erodes the soil and turns the area into a desert. A study by Monitoring of the Andean Amazon (MAAP) highlighted the scale of the problem: in 2018 alone, 10,000 hectares of the Peruvian Amazon were destroyed due to deforestation associated with gold mining.
The problem of wild mines is not limited to environmental poisoning and health issues. It is also a serious social issue — along with gold prospectors come increased crime, prostitution (including child prostitution), drug trafficking, and the hiring of children for slave labor. Murders in such places are the order of the day. Sometimes by fellow travelers as well. Ironically with the finding of gold comes the fear for one’s life. There are often criminals and even entire mafia cartels among the workers. Many groups pay and hire security guards with rifles on their shoulders to make sure no outsiders roam the mine. The effects are easy to predict. In the Colombian department of Antioquia, where 80% of the country’s gold is mined, the murder rate has risen to 189 per 100,000 inhabitants. By comparison, the national average is 35 per 100,000 citizens.
For organized crime groups in South America, the illegal gold trade is a much safer business than the drug trade. Detectability is relatively low and potential penalties are not a deterrent. Worse, the money from the business often goes to terrorist organizations. The scale and effects of the jihadist gold rush in Africa’s Sahel was depicted in a recent investigation by Reuters journalists. Black market gold trading in the region is a $2 billion-a-year business. — The toxic mix of poverty and gold is like fertilizer for crime, Samuel Hinds, Guyana’s prime minister, stated years ago. By no means have his words lost their relevance.
Dirty business
Most governments try to solve the problem by force. They send the military into the streets to eliminate entire mining settlements in coordinated actions by soldiers. One of the most famous successes in recent years was the Peruvian army’s action in the La Pampa region. The largest operation in the country involved 1,200 soldiers who simultaneously struck dozens of wild mines in the region. More than 6,000 people involved in mining were expelled, and dozens of suspects were arrested in the process. Equipment was destroyed and mining installations were blown up. Such actions, however, are ad hoc in nature. It’s like patching holes in a rusty ship: even if you plug one hole, another one will appear. People living off gold are a drifting population. One day they are here, the next they are there. Actions that target the principals are much more effective. This was the case in Brazil a few years ago, where police busted an international gang and arrested 26 people for coordinating the crime. Officers seized gold, mining equipment, and several aircraft used to transport people to remote areas, and among those arrested were pilots, engineers, and businessmen accused of financing the operation and selling the gold.
The problem cannot be completely solved and controlled until there is a clear and transparent system for buying the raw material. As much as 80% of the gold mined in the world goes to jewellery companies, that’s why such campaigns as “No dirty gold” are supposed to convince the public to pay more attention to the source of the gold.
“A large percentage of the gold that reaches the market can be considered dirty. That means it comes from mines that don’t respect the rights of local people and damage the environment,” says Payal Sampat of Earthworks Action.
Global gold ore mining has been at 2,400 t per year for years. At least 100 t comes from illegal mines. These are very conservative analyses. Without social responsibility, little will change.
Destination of gold in the world
51% — jewellery products
19% — investments
17% — central banks
13% — technology
Largest licensed gold mines by production (2020)
South Deep — South Africa — 32.8 million ounces (MOZ)
Grasberg — Indonesia — 30.2 million ounces (MOZ)
Olympia — Russia — 26 million ounces (MOZ)
Lihir — Papua New Guinea — 24 million ounces (MOZ)
Norte Abierto — Chile — 23.2 million ounces (MOZ)
Carlin Trend — United States — 12.4 million ounces (MOZ)
Boddington — Australia — 12.3 million ounces (MOZ)
Mponeng — South Africa — 11.6 million ounces (MOZ)
Pueblo Viejo — Dominican Republic — 10.9 million ounces (MOZ)
Cortez — United States — 8.7 million ounces (MOZ)
The world’s largest gold producers (2020)
China — 368.3 t
Russia — 331.1 t
Australia — 327.8 t
United States — 190.2 t
Canada — 170.6 t
Ghana — 138,7 t
Brazil — 107 t
Uzbekistan — 101,6 t
Mexico — 101,6 t
Indonesia — 100,9 t
Did you like the article? If so, leave a comment or some claps. It encourages me to keep working and writing interesting pieces. Follow me if you wish — new articles are posted here daily! Thank you!
