Brazil stepping up fight against illegal gold mining

Stakeholders in Brazil's mining sector are working together to step up the fight against illegal gold mining, an activity that is damaging the reputation of the industry across the globe.

Illegal gold production in Latin America's largest nation has been a chronic problem for decades and combatting it is difficult because of the size of the country and the fact that it often takes place in remote areas of the Amazon rainforest. 

But now, the authorities are more engaged and have more traceability mechanisms that could help in battle against these criminal activities, which also have serious environmental impacts such as deforestation, loss of biodiversity, and water, air and soil pollution.

As part of these efforts, Brazilian mining association Ibram has held a series of meetings with officials in recent days, calling on more to be done both inside and outside the country and asking the foreign affairs ministry to reinforce efforts to break up the chain of production and sale of gold from illegal operations.

“The trade in illegal gold fuels a criminal alliance in Brazil, which is responsible for some of the devastation we see in the Amazon, something the world is watching. One of the countries that buys the most gold from Brazil is Switzerland. I was recently in Geneva to discuss this issue of trade and the adoption of certification for ore imports, with traceability of origin,” Ibram head Raul Jungmann said in a release.

Meanwhile, the president of the local securities exchange commission CVM, João Pedro Barroso do Nascimento, said that the regulator will consider it a priority to step up inspections of certificates and securities brokers (DTVMs), through which illegally mined gold is thought to be laundered.

According to a study by sustainability NGO Instituto Escolhas, 52.8t of gold was produced from clandestine operations in 2021, the most recent figure available, up 25% compared with 2020.

Wildcat mining has increased exponentially in recent years thanks to international demand. Gold prices have climbed from around US$400/oz prior to the pandemic to over US$1,900/oz and that has fueled literally thousands of small-scale operations in Brazil, as well as many larger undertakings. 

Brazil is now one of the world’s top 10 gold exporters of gold. According to Ibram figures, in 2021 domestic gold production reached 194t, bringing in revenues of 27bn reais (US$5.3bn), up 8% from 2020. It is estimated that around a third of this gold is produced illegally.