In Peru and Colombia, the world’s top producers of cocaine, illegally mined gold is now a more valuable export than cocaine, according to a new study.
Organized criminal groups have moved into this sector, leaving workers vulnerable to labour exploitation, human trafficking and sexual offences, the study says.
“It is staggering when you go to these illegal mines and you see that the government is not responding and all the negative impacts on the environment and on the people,” said Livia Wagner, who wrote the report for the Global Initiative against Transnational Organized Crime, based in Switzerland. “Illegal mining funds criminal and terrorist groups, facilitates money laundering and corruption … and creates sex trafficking.”
Illegal miners tend to use heavy machinery, but lack legal titles and shirk labour and environmental standards. Both Peru and Colombia also have large-scale legal gold mining industries, including mines run by companies based in Canada.
High gold prices from 2000 to 2010, combined with lower profit margins in drug trafficking and increased enforcement, created the ideal conditions for this boom in illegal mining. Once gold is laundered it becomes indistinguishable from legal gold and can be easily moved across borders.
The study estimates that 28 per cent of gold mined in Peru is illegal, earning criminals $3.3 billion a year. In Colombia, it estimates 80 per cent of gold production is illegal, worth between $1.9 billion and $2.6 billion a year.
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