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Illegal Gold Mining - The New Cocaine for Colombia’s Armed Groups

Marina Daley | Latin America Fellow

Ministros de Defensa y del Interior destacan acción conjunta entre las Fuerzas Armadas, Policía Nacional y Ministerio Público. Image credit: Galería de fotografías del Ministerio de Defensa via Wikimedia Commons. 

Colombia’s armed groups, namely the National Liberal Army (ELN), Clan del Golfo, and dissidents of the Revolutionary Armed Forces of Colombia (FARC), are diversifying beyond cocaine to gold mining – another high profit but lower risk trade. The historically opaque gold sector has allowed Colombian armed groups to launder money since Pablo Escobar’s era. Currently, 80 per cent of Colombian gold is illegally produced and is associated with labour exploitation and significant environmental damage. Considering the increasing use of gold in new technologies and electronics manufacturing, there is a need for greater awareness of the involvement of organised crime in the gold sector and improved transparency in the gold supply chain.


Diversification into non-traditional sources of income


Gold is Colombia’s fourth largest export, with production divided between formal, informal (artisanal and small-scale) and illegal mining. Since 2008, it became a major gold producing country incentivised by an increase in gold prices, leading armed groups to diversify into mining. Currently, such groups produce more than 70 per cent of Colombia’s gold. Valued at USD$2.5 billion annually, this trade is ideal for laundering drug trafficking profits. Through using these profits to fund mining operations, then selling the gold to traders who export the gold legally, armed groups have access to clean money. Areas lacking government oversight, such as those allowing for coca crop cultivation, are further exploited by such groups. These areas are also known for gold mining, thus enabling the use of existing drug smuggling routes for gold transport. Even when not directly involved in mining, armed groups tax artisanal miners in regions under their control. Unlike the relatively straightforward eradication of coca through aerial fumigation, combating the illegal gold mining requires the Colombian government to facilitate large-scale formalisation of the sector and capacity-building to identify illicit financial flows.


As identified by InSight Crime, Colombian President Gustavo Petro’s Total Peace law opens negotiation between armed groups and the government to improve internal security conditions, incentivise crime and increase illegal mining. Ceasefires exempt certain armed groups from military confrontations, allowing to control their territories and increase their profits. Groups have become bolder, demonstrated by an attack on Colombia’s largest gold mine by Clan de Golfo, who initially agreed to a ceasefire. It is likely that illegal gold mining and associated violence will continue even as negotiations through Total Peace progress.


Labour Exploitation and Environmental Damage


Gold mining is confounded by authorisation issues and the assumed association it has with criminal activity. The lack of distinction between informal mining and illegal mining reduces the state’s ability to identify the involvement of armed groups. Gold mining is found in areas with indigenous communities who partake in artisanal mining to supplement incomes due to limited economic opportunities. Whilst artisanal mining is small-scale, the increase in illegal gold mining driven by armed groups results in high levels of mercury pollution, impacting the local people and environment. Extortion, violence, forced labour and human trafficking are common, displacing many indigenous communities. Indigenous activists opposing illegal mining operations have been murdered, highlighting the climate of fear that armed groups preserve to maintain control over their territories.


In 2023, the Colombian government’s attempt to confront illegal mining through targeted police and military operations resulted in a month-long strike in Antioquia. The strike emphasised the complex relationship around informal and illegal mining. While Clan del Golfo profits from the exploitation of minerals in this area, miners demanded to be decriminalised, arguing that they were not criminals. Locals often tend to be linked to these groups due to the lack of economic alternatives or coercion. Ultimately, this strike resulted in a step towards the greater regularisation of gold mining, by creating a mining district and centralising the mining sector - positive steps towards eliminating armed group involvement. Nonetheless, identifying the criminal elements of gold mining remains a core issue for the Colombian government.


Regional examples & international pushes for transparency


Illegal gold mining is an issue that extends beyond Colombia, affecting many countries in Latin America. Environmental crime is rife in the Amazon Basin, encompassing Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname, Venezuela, and French Guiana, each with varying success in their governments’ ability to curb it.  


Peru’s ‘Operation Mercury’ has been largely successful in halting illegal gold mining in the Madre de Dios Amazon region, reducing deforestation caused by illegal mining by 92 per cent through increased state monitoring of the area. Although failing to deter illegal mining activity entirely, it demonstrates both the effectiveness of, and need for, increased state presence in suppressing illegal activity in mining areas. Brazil’s hard-line stance in cracking down on mining in Indigenous reservations has been similarly effective. The country is preparing legislation to combat gold laundering, demonstrating its commitment, at least on paper, to increasing its gold supply chain transparency.

Meanwhile, Venezuela, under the Maduro regime, is substantially involved in illegal gold mining, evading sanctions via its export. Colombian armed groups, such as the ELN and FARC dissidents, operate in Venezuela and are involved in exporting gold and smuggling it into Colombia. The links between armed groups and the Venezuelan government mean that even if Colombia can effectively stamp out local illegal mining, it is likely that its armed groups will continue to profit from these activities.


Illegal gold mining has become a lucrative funding source for Colombia's armed groups, supplementing traditional activities like drug trafficking. The lack of transparency in the gold sector allows them to exploit the industry, leading to labour exploitation, environmental damage, and significant issues in governance. The Colombian government faces challenges in addressing this problem, as armed groups exploit negotiations and their control over territories to sustain their activities. Similar issues are observed in other Latin American countries, highlighting the need for increased state presence, resources, and regional and international collaboration to combat illegal gold mining effectively.

Marina Daley is the Latin America Fellow for Young Australians in International Affairs.


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