Brazil's efforts to tackle illegal mining start to bear fruit

Brazil is seeing progress in its efforts to combat illegal gold mining although environmental issues are becoming a major headwind for the administration of President Luiz Inácio Lula da Silva.

"In 2023, Brazil adopted important measures to control the gold trade and combat illegal extraction. Electronic invoices have become mandatory for transactions for the gold mined by garimpos [informal miners] and are no longer based solely on the good faith of those involved," sustainability-focused NGO Instituto Escolhas said in a statement.

"These measures had significant and immediate effects on the market. Proof of this is that, in 2022, garimpos recorded production of 31t of gold. In 2023, after the changes, the volume fell to 17t, a decrease of 45%. In 2024, the decline is even more pronounced. Between January and July, production of garimpos was 84% lower than that recorded in the same period in 2022," it added.

Brazil is one of the world’s top gold exporters but a significant proportion of the metal is produced illegally. Along with expanding deforestation, illegal mining on indigenous lands fuels corruption, violence and human rights abuses.

During his election campaign in 2022, Lula, who took office in January 2023, underlined that combating illegal mining would be one of the main priorities of his administration in the environmental sphere.

However, despite the positive figures, the government is under intense pressure amid a series of forest fires across the country in recent weeks, which have resulted in large amounts of smoke in the atmosphere.

"Currently, I would say that issues related to the impacts of extreme weather events are one of the federal government's three main concerns, alongside the fiscal issue and also the tumultuous relationship the federal government has with congress over the budget," Lucas Fernandes, a political analyst at local consulting firm BMJ Consultores, told BNamericas.

The federal government has said that most of the fires are criminal in origin and is intensifying the fight against such crimes. However, the lack of practical results has generated criticism.

In a survey carried out by pollsters IPEC earlier this month, the environmental policies of Lula were rated as bad or very bad by 44% of respondents, up from 33% in April.

"Lula's environmental agenda is difficult to implement because we have to consider that there are several state governments and also important members of congress who, behind the scenes, are opposed to a more restrictive environmental policy, which limits the actions of the federal government. However, as we see advances in extreme weather events, the population's perception regarding the federal government on that front will tend to deteriorate," said Fernandes.

Lula's current term has been marked by more frequent extreme climate change events. 

In May intense rains in Rio Grande do Sul state caused unprecedented flooding for weeks.

A study carried out by the Inter-American Development Bank, the World Bank and UN Economic Commission for Latin America and the Caribbean calculated that the economic impact of the floods in Rio Grande do Sul was 87 billion reais (US$15.7bn).

Although many countries have suffered from the increase in extreme weather events in recent months, Lula's administration has been criticized for maintaining an ambiguous discourse on the environment.

While the government says it wants to move forward with a sustainable agenda, the administration defends oil production and exploration in environmentally sensitive areas, such as the region around the mouth of the Amazon, and has also defended infrastructure projects like paving the BR-319 road and the construction of the Ferrogrão railway, which, according to environmentalists, could have severe direct and indirect environmental impacts in the Amazon.

New fines 

Despite the stance, the government wants to move forward with measures to stop irregularities that have an effect on the environment.

Mining regulator ANM will hold a public hearing on September 27 to establish new rules for applying fines and other penalties in the case of infractions in the sector.

"The proposal brings important changes such as fines being based on the size of the companies, both for exploration and mining; new ranges for mining fines, which can vary from 5,316 reais to 55.9 million reais; and changes in calculation methods, which will consider the level of severity of the infraction and the statistical distribution of the companies' mineral production value (VPM)," ANM said in a statement.

According to ANM director Roger Cabral, “The proposal aims to provide greater predictability and legal security to the sector, establishing ceilings for fines in each range, seeking a balance between the effectiveness of sanctions and the economic reality of companies, in addition to promoting greater compliance of the mining sector with its legal obligations.”