Illegal mining in Latin America: Minecraft (The Economist – September 16, 2014)

BONANZA, a tropical town in north-eastern Nicaragua, has attracted gold miners since 1880. Still true to its name, it yields over a thousand kilos of the metal every year. But it is a dangerous place. Last month heavy rain triggered a landslide, trapping 29 miners inside. Seven still remained unaccounted for by the time rescue workers abandoned the search.

The miners who died in Bonanza were informal workers, working on the basis that they sold any gold they found to Hemco, a Colombian-owned company which formally operates the concession. Informal mining is not necessarily illegal, but whether operating on the fringes of, or far outside, the law, workers run great risks. Twelve wildcat miners died in Colombia in May after a landslide at an illegal gold mine. In July eight died in Honduras.

Gold is not the only commodity to lure unlicensed prospectors but it has a particular appeal. Its price more than doubled between 2008 and 2011 (it has since come down again). In Madre de Dios, a jungle region in south-east Peru where 97% of local gold production in 2011 came from illegal mining, miners can earn $75 a day, up to five times the amount they might expect as a farm labourer. In Colombia nine out of ten gold mines are unlicensed. Low start-up costs mean miners can work in very small groups—although organised criminal groups also operate illegal mines at much bigger scale. Mercury, which is typically used to separate gold from ore, is cheap and readily available.

It is not only those underground who face danger. In Colombia, armed groups have muscled their way into the mining business, using violence to settle their disputes. In a 2013 study Daniel Mejía, an economist at the Universidad de Los Andes in Bogotá, found that illegal mining operations in Colombia had had a “positive and significant effect” on murder rates in the areas in which they operate. Indigenous groups are often most exposed.

In 2012 up to 80 Yanomami tribespeople were reported to have been killed after prospectors tried to displace them from their land in Venezuela. Members of the Munduruku tribe in Pará state in Brazil have grown so frustrated by inaction on the part of the federal government that they are now hunting and expelling wildcat miners from their territory.

The environmental impact can be devastating, too. Dredging can cause rivers to silt up, for example. Last year a research team from the Carnegie Institution for Science carried out an assessment of Madre de Dios, using a combination of satellites, aircraft and researchers in the field.

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