Illicit and Unregulated Gold Mining

What is Illicit and Unregulated Gold Mining?

From 2000 to 2010, the price of gold increased over 300%, spurring a growth in gold mining worldwide. Miners who normally wouldn’t extract gold in marginal area are now able to do so with significant economic gain. In the Amazon, this has resulted in the rampant growth of artisanal and small scale gold mining (ASGM) throughout the Amazon basin, where millions of years of erosion have accumulated in small underground deposits of gold underneath the forest floor.

Artisanal and small scale gold mining (ASGM) is a type of gold mining conducted by individual miners or small enterprises with limited capital investment and production and accounts for an estimated 20% of global production. Oftentimes, miners work in ‘low-governance’ areas in the dense remote Amazonia forests, where the government lacks the capability to monitor and regulate the mining operations. The mining technologies used are oftentimes antiquated, inefficient, and dangerous, and in most cases use mercury in the process with no safety controls or regulations. Mercury and other toxins are released into the environment poisoning the people, plants and animals. In 2018, it was estimated that approximately 185 tonnes of mercury were released into the Peruvian Amazon. Mercury is one of the most toxic elements on earth and can stay in an ecosystem for years, if not centuries. Mercury poisoning can cause serious health issues for people including brain damage, nerve and organ damage, memory loss and even possibly a shortened life span. It robs people and societies of their ability to thrive.

Photo by Dano Grayson

Who are the Small Scale Miners?

In many cases, the miners from the highlands of the Andes and other areas where there are few prospects for work are driven to the Amazon out of poverty. ASGM also attracts illicit and illegal activities where criminals not only exploit the miners, but also the vulnerable local and indigenous populations. With this unlawful activity comes organized crime, violence, cocaine trafficking, money laundering, corruption, human trafficking and child slavery. In Peru alone, it is estimated that illegal gold mining is a $3 billion a year illegal activity, making more money than drug trafficking. This dirty gold is making its way to the refineries and on to the consumer where it is often disguised and added to gold that comes from regulated, legal sources.

How does ASGM affect the Amazon?

Artisanal and small scale gold mining is responsible for the destruction of important habitats and biodiversity and contributes to about 10% of all deforestation of the Amazon. Large landscapes are deforested, existing vegetation and trees are burned, and many plant and animal species are killed. The burning of the trees releases the carbon that is held in the trees branches, trunk, roots and leaves contributing to the growing global threat of climate change. Today, deforestation and the burning of the Amazon and trees worldwide releases around 30% of carbon dioxide emissions. The Amazon is nearing the tipping point with the rise of deforestation now at catastrophic levels.

The release of mercury from the mining also contaminates the lands and water, poisoning the local food chains and the fish, which many rely on as their major source of protein. In the Madre de Dios regions of Peru, where mining has been extensive, 76% of all people tested have 3-33 times above safe levels of mercury in their systems, with indigenous children the most affected.

How do they mine?

There are two main types of artisanal and small scale gold mining found in the lowlands of the Amazon.

Gold mining on barges– Small floating operations where miners use suction hoses to bring up rock and sediment from the bottom of the river. The materials are then run through a series of sieves where the smaller sediments and gold flecks fall through. This type of mining disturbs the river bottoms and the habitats of the animals that live there. Silt and rock, along with mercury and other toxins, are released into the river where it travels downstream infiltrating and poisoning new areas. The process can be dangerous. At times miners can fall into the forceful, fast moving rivers and drown. Many families with small children live and work on the barges.

Gold mining in the forests– Miners cut down the forests and burn them to clear the area to get to the gold and sediment underneath the surface. Hydraulic hoses then spray water onto the remaining soil where it is loosened, removed and then placed onto sieves and mats that capture the fine sediment and gold. In some cases large equipment is brought into the forest to accelerate the work, amplifying the destruction of the forests. As the miners work the hole becomes deeper increasing the danger and the threat of mudslides and the caving in of the walls overtop of the workers. Two to four people can die in a week in the mining camps.

It can take approximately 20 tons of earth to make one wedding ring. Gold mining is one of the most destructive threats to the Amazon.

How does mercury work?

The miners take the processed fine sediment and flecks of gold and place it into a barrel with water and mercury. The miner stands in the barrel with the mercury laden water and silty-like sediment and mixes the sludge with his feet. The mercury acts like a magnet to the gold, drawing the flecks of gold from the sediment to bind with the mercury, to become a small silvery-gold clump. The final clump or amalgam is removed and the remains of the mercury laced water is poured back into the river. The mercury is then vaporized by burning the amalgam to produce a nugget of gold. When the mercury is burned off it is breathed in by the miners and can travel through the air to become an invisible toxic threat.
When mercury enters the ecosystem it becomes accessible to living organisms where it goes from being inorganic to organic and is now called methylated mercury. This is a very dangerous mercury compound because it can now be consumed by many forms of life as it moves up the food chain.

Do you know where your gold comes from?

The difficulty with identifying cleanly sourced gold is that oftentimes gold is refined at large plants that do not distinguish between sources. Since there is not a consistent clean supply chain, most mined gold goes into one melting pot where it is then refined and either sold to a manufacturer, bank, or to the consumer. In many cases the illegal gold can be taken secretly out of the countries and “cleaned up or washed” through illegal means to be sent to refineries as falsely labeled, “legally and cleanly sourced gold.” This operational process makes it very difficult for gold retailers and consumers to determine where the gold was mined or what practices were used.

While ASGM can be an important economic opportunity for people in poverty, actions are needed to formalize and regulate the sector, remove illegal, illicit and organized crime, and implement a clean and transparent supply chain for gold. In the Amazon today and around the world many governments, the United Nations, NGO’s, companies, and individuals are beginning to look for ways to solve issues around illicit and unregulated gold mining from the ground to the consumer. Governments are working on creating the policies and infrastructure needed to formalize and regulate the miners in established mining zones.

Other solutions that are being tested and beginning to be implemented are:

• certification process’ for cleanly sourced gold
• extraction of gold with less of an environmental impact
• recovery of lands destroyed though gold mining
• accountability and transparency by the refineries to purchase cleanly sourced and legally mined gold
• new mercury free gold mining technologies
• practices that help promote better working conditions
• blockchain technologies – an incorruptible digital ledger that can record gold as it moves from the miner to the consumer

ASGM can be found in over 80 COUNTRIES and can involve more than 25 million people worldwide.​ Research suggests that 12-30% of gold production comes from ASGM. For many it is an important livelihood, while for others it is a criminal venture.