Latin America’s criminal organizations have historically generated the bulk of their staggering wealth through the trafficking of drugs. However, a significant shift has occurred as these groups now derive even greater profits from the burgeoning illegal gold trade, particularly in countries such as Colombia, Peru, and throughout the Brazilian Amazon.
Colombia’s various criminal factions reportedly amass over half of their total revenue from illegal gold mining activities. Leaders such as Venezuela’s Nicolás Maduro and Nicaragua’s Daniel Ortega have honed in on these gold mining operations as means to secure the loyalty of high-ranking military officials. The connection between illegal mining and rampant deforestation of the Amazon is undeniable, presenting an escalating threat not only to the environment but also to U.S. national security and interests.
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The United States government has initiated some measures aimed at curbing the illegal gold trade, yet these efforts fall significantly short of what is required. Over the last decade, U.S. metal companies have been implicated in the purchase of billions of dollars’ worth of illegally mined gold from Latin America. A significant portion of the gold extracted in authoritarian Nicaragua continues to flow into the U.S. market. Furthermore, profits generated from environmental crimes—illegal mining being a prime example—often find their way into U.S. shell companies, complicating the financial landscape.
Criminal Gold Rush
The demand for gold typically increases during periods of global political and financial uncertainty, prompting investors and central banks to turn to gold as a safe haven asset, thereby driving up its prices. Following the financial turmoil of 2007-2008, escalating U.S.-China tensions, and the ongoing conflict spurred by Russia’s invasion of Ukraine, gold prices not only surged but have continued to reach unprecedented heights. In fact, the price of gold has nearly quadrupled in the past two decades.
The illegal mining sector under criminal control has expanded dramatically. Reports indicate that illegal gold consistently outearns coca production in both Colombia and Peru, the world’s leading producers of the coca plant. Projections for 2024 reveal that illegal miners along just one tributary of the Amazon River at the Brazil-Colombia border are set to generate annual revenues exceeding the total budget allocated for Brazil’s federal anti-deforestation agency, as noted by Bram Ebus of the International Crisis Group. In this region, illegal miners extract more gold annually than their legal counterparts.
Gaining Momentum
The United States has embarked on initial efforts to tackle the ongoing challenges presented by illegal gold mining. In a forward-looking move, the Federal Bureau of Investigation (FBI) established the Illegal Mining Initiative in 2015, aimed at investigating criminal networks involved in illegal mining and prosecuting companies that facilitate these operations. During the Trump administration, bilateral memoranda of understanding (MoUs) were established with both Peru and Colombia, paving the way for technical assistance to local law enforcement agencies alongside support for formalizing small-scale mining while mitigating environmental impacts. More recently, concerted actions taken by the Department of Justice resulted in the prosecution of NTR metals for importing billions’ worth of illegal gold into the U.S., while the U.S. embassy in Lima has issued warnings to companies regarding the procurement of gold from illicit sources.
Despite these initiatives, there remains significant room for improvement and more decisive action from the United States.
Pass the United States Legal Gold and Mining Partnership Act
A bipartisan bill, the United States Legal Gold and Mining Partnership Act, was reintroduced in March 2023 in the Senate and again in September 2023 in the House. This legislative proposal aims to allocate $10 million towards the development of a comprehensive, multi-year strategy to combat illegal gold mining activities across the Western Hemisphere. Such an organized approach would offer a far more coherent strategy against the illegal gold trade, targeting its root causes with sustained legislative backing.
Make Illegal Mining and Other Environmental Crimes Predicate Offenses for Money Laundering
U.S. federal law currently fails to classify foreign environmental crimes—including illegal mining—as predicate offenses for money laundering. This legal loophole hampers the ability of U.S. federal prosecutors to go after the networks that facilitate illegal mining in Latin America. To effectively combat this issue, Congress should amend U.S. anti-money laundering statutes to include illegal mining and other environmental violations as predicate offenses. By doing so, the Department of Justice would gain access to powerful legal tools currently reserved for combating drug trafficking, enabling it to more effectively target the illicit mining trade.
Consider Tightening Sanctions on Nicaragua’s Gold Sector
In October 2022, President Biden enacted Executive Order 14088, which empowered the Treasury to impose sanctions on U.S. firms tied to Nicaragua’s gold sector, including foreign entities connected to mining within the United States. However, many of these actions have amounted to little more than symbolic gestures. The United States continues as the primary destination for nearly $720 million worth of Nicaragua’s gold, reflecting a deep reliance on Nicaraguan mining revenues. Moreover, foreign mining companies, which dominate over 60 percent of Nicaragua’s mining concessions, persist in their operations even as they face allegations regarding harmful practices toward Indigenous lands.
Ultimately, the foundation for a comprehensive strategy against illegal and authoritarian gold mining is present. It is imperative that the United States takes the lead on this pressing issue to halt the destabilizing effects of illegal gold in the Americas.
How can U.S. companies be held accountable for their role in the illegal gold trade?
**Interview with Dr. Maria Gonzalez, Expert in Transnational Crime and Environmental Policy**
**Interviewer:** Thank you for joining us today, Dr. Gonzalez. With the recent news of over 500 illegal miners being arrested at the Margaret shaft in Stilfontein, it seems that illegal mining is a pressing issue globally. Can you provide some insights into how this situation in South Africa relates to the broader context of illegal gold mining, particularly in Latin America?
**Dr. Gonzalez:** Absolutely, and thank you for having me. The situation in South Africa is reflective of a much larger trend we’re seeing worldwide. In Latin America, particularly in countries like Colombia and Peru, illegal gold mining has not only become a major source of revenue for criminal organizations but also poses significant environmental risks. Just like in South Africa, illegal miners are often operating under dangerous conditions and are part of a larger network that contributes to deforestation and loss of biodiversity.
**Interviewer:** You mentioned that criminal organizations in Colombia derive a significant portion of their revenue from illegal gold mining. How does this compare to traditional drug trafficking operations?
**Dr. Gonzalez:** It’s quite striking. Reports indicate that in Colombia, illegal gold often surpasses coca production in terms of profitability. Criminal groups are adapting to market demands; when gold prices rise—especially during economic uncertainty—these groups can make astounding profits. This shift indicates not just an increase in illegal mining activities but also suggests a strategic evolution in how these organizations fund their operations.
**Interviewer:** What are the implications of illegal gold mining on U.S. national security and environmental policies?
**Dr. Gonzalez:** Illegal gold mining is closely linked with environmental degradation, particularly in the Amazon. The repercussions extend beyond borders. As profits from these operations can finance criminal networks, they also pose a threat to U.S. interests, particularly in terms of illegal trafficking and environmental crimes. The U.S. government is beginning to take more action, like establishing initiatives to investigate these networks, but it’s just a start. More coordinated efforts are necessary, especially with legislation such as the United States Legal Gold and Mining Partnership Act that aims to tackle these challenges comprehensively.
**Interviewer:** Can you elaborate on the role of U.S. companies in this issue?
**Dr. Gonzalez:** Certainly. Over the years, U.S. metal companies have been implicated in purchasing illegal gold, contributing to the problem. These chains of supply are complex, and it’s a challenge to trace the origins of gold sold in the U.S. market. As we push for better regulatory frameworks, it’s crucial that these companies are held accountable for their sourcing practices, helping to ensure that they do not inadvertently support criminal organizations and environmental degradation.
**Interviewer:** Lastly, what strategies do you believe should be prioritized to combat the illegal gold trade more effectively?
**Dr. Gonzalez:** There are several key strategies that could prove effective. First, increasing collaboration with local law enforcement in Latin America to formalize small-scale mining could help bring these operations under regulation. Second, classifying illegal mining as a predicate offense for money laundering would provide another tool in law enforcement’s arsenal. international cooperation is essential; the U.S. must work with Latin American countries to create economic alternatives for communities that rely on illegal mining for their livelihoods.
**Interviewer:** Thank you, Dr. Gonzalez, for sharing your insights on this critical issue. It’s clear that illegal gold mining is a multifaceted problem that requires a concerted effort from multiple stakeholders.
**Dr. Gonzalez:** Thank you for having me. It’s an important conversation, and one that we need to keep pushing forward.
