Illegally mined gold in South America has overtaken cocaine and is now the “most important” way to earn money for organised crime gangs, according to a new report.
The new report, from The Global Initiative Against Transnational Organised Crime, found in Peru and Colombia – the largest cocaine producers in the world – the value of illegal gold exports now exceeds the value of cocaine exports.
The report said illegal mining is the “easiest and most profitable” way to launder money in the history of Colombian drug trafficking.
Illegal gold mining is believed to be funding terrorism, facilitating money laundering and corruption, driving people trafficking, child labour and sexual exploitation, displacing local populations and speeding up environmental destruction.
Illegal gold mining employs hundreds of thousands of workers across Latin America, many of whom are extremely vulnerable to labour exploitation and human trafficking.
Women and young girls from all over Peru, some as young as 12 years old, are recruited through false job offers and trafficked to the mining areas of La Pampa and Delta 1 (both Provinces of Madre de Dios) and La Rinconada (Province of Puno) to work in brothels.
It says the increase in illegal gold mining is down to two trends; the “soaring” gold prices which increased the profitability of gold mining; and the US-led war on drugs, notably in Colombia and Mexico, sharply reduced the profitability of drug trafficking from Latin America to the USA.
The fragmented nature of artisanal mining in Latin America “greatly facilitated” the entry of organised criminals.
Even though global gold prices have gradually decreased in recent years, organized criminal groups have continued to drive the expansion of illegal gold mining, the report says.
South America is now unique in the high percentage of gold that is mined illegally; about 28% of gold mined in Peru, 30% of gold mined in Bolivia, 77% of gold mined in Ecuador, 80% of gold mined in Colombia and 80-90% of Venezuelan gold is produced illegally.
In Peru, the single largest producer and exporter of cocaine in the world, produces an estimated 325 tonnes of cocaine each year, earning Peruvian organized crime between $1bn (£708m) and $1.5bn ($1.05bn) a year.
The report says there are four major drug cartels and several criminal gangs who between them “probably” earn a similar amount in wholesale drugs proceeds (cocaine and heroine).
Illegal gold production, meanwhile, earns Peruvian criminals $2.6bn (£1.8bn) a year and their Colombian counterparts $2bn (£1.4bn).