Colombia Urges Blood Diamond-Style Controls for Gold Buyers – by Oscar Medina (Bloomberg News – May 8, 2017)

https://www.bloomberg.com/

Colombia is calling for tougher controls over international gold purchases to curb the amount of illegally-mined metal entering mainstream markets, following similar moves by the diamond industry.

“There’s a responsibility on the part of buyers to make certain what the origin of the gold is that they are acquiring,” Colombian Mining and Energy Minister German Arce said. “My fear is that there’s a lot of illegally-extracted gold that ends up in central bank vaults.”

Less than a fifth of Colombia’s gold is produced legally, with much of the 60 metric-ton annual production controlled by illegal armed groups. These range from large capital-intensive operations to individual miners panning in streams and often handing over a percentage to local mafias.

As well as funding Colombia’s five-decade conflict, illegal mining poisons rivers with mercury and causes deforestation. Production in countries such as Colombia, Ecuador and Peru, where a significant amount of the gold is mined illegally, is growing as a share of total world output, according to Arce.

The Kimberley Process was formed in 2000 to ensure diamond purchases don’t finance violence by rebel movements. It represents 81 countries, including the U.S., European Union nations, Russia, China and South Africa.

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