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Since the global financial crisis in 2008, investor capital has fled to a standard haven: gold. Prices for the yellow metal reached record highs this year, raising the incentive to get the gold out of the ground. Impoverished people in rural areas became artisanal miners. Companies sprang up with new machinery, and governments tapped in, too. In Latin America, everyone is finding a way to get in on the scramble.
Amid a gold rush, artisanal miners are getting squeezed out
NECHI, Colombia — It was like any other day in the past 40 years that Martín Palacios has spent panning for gold in northeastern Colombia.
That is, until 15 police officers showed up.
Palacios managed to run away, but police arrested about 80 other miners who were working without a mining license.
The raid, which happened earlier this year, was yet another by police who have been cracking down on illegal mines that are mushrooming amidst a gold rush. The miners have been caught in the middle, squeezed by both armed groups who want their earnings, and major companies snapping up mining rights.
“If there’s space for multinational mining companies, there should be space for us too,” said Palacios, pointing out that traditional miners like him have been part of the social and economic fabric of hundreds of communities across the country.
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Palacios in many ways is the new, but overlooked, face of Colombia’s gold rush, triggered by ever-rising gold prices, and a government eager to make mining a pillar of its economy.
Since 2002, the government has handed out about 8,000 mining titles, up from just under a thousand a decade ago. That’s brought in a torrent of national and foreign mining companies, which now hold mining rights to nearly 12 million acres.
But many of the companies’ concessions overlap with areas where small-scale miners like Palacios have mined for generations but never obtained licenses. Now, they stand to lose one of the few sources of income they have in the region. The dispute has paved the way to a David-and-Goliath battle for the wealth that could lead to more unrest in an already volatile region.
“The mineral conflict that we’ll have throughout the length and width of the country will be very, very big,” said Alvaro Pardo, a former mining ministry director who now heads Colombia Punto Medio, a mining think-tank.
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Residents here, and in other gold-rich areas of Colombia, have relied for generations on traditional mining. Men and women wade knee-high into the river to pan for specks of gold, and blast open rock walls with dynamite. In this impoverished area, there are few other ways to make a living.
In Puerto Guamo, a riverside hamlet of 200 people, gold has long been so much a part of the lifeblood that it is used in place of the Colombian peso as currency. Families pay off their credit at the corner store with grams of gold, or take a gold nugget to buy provisions at towns downriver.
Over the last few years, gold prices have spurred the proliferation of medium-scale, illegal mining operations with backhoes and excavators that dig their way along riverbanks and through jungle looking for gold.
Many of these rogue outfits are forced to pay an extortion tax to armed groups, including FARC guerrillas and drug-traffickers, who control various parts of the region, and want to cash in on gold profits. Some armed groups have even set up their own mining operations.
To stop the flow of gold profits into the hands of criminal groups, the government has declared fighting illegal mining a priority, sweeping up traditional miners in its offensive. “They’ve labeled us as illegal,” said Mauricio Sánchez of Aheramigua, the association of farmers and miners of the Guamaco region.
The biggest risk small-scale miners face is that of eviction, as mining companies claim their rights and trigger eviction orders. The obligation to force any miners without mining title off a company’s concession falls on local governments, and in towns where the majority of the population relies on mining, officials fear blistering consequences.
“We are attending to a social crisis here today,” said Jairo Alvarez of the mayor’s office in El Bagre. “Because if miners aren’t allowed to do their work, no municipality will be able to provide for the needs of the people and attend to the displacement the mining will cause.”
It’s unclear how many evictions have been carried out, but with another 20,000 applications for mining titles in the queue , the number is expected to grow. In the town of Zaragoza, for example, officials estimate that more than 50 eviction orders are pending — all to make way for a single mining company.
Many traditional miners have made attempts to win concessions without success, according to miners’ associations. Vicente Jimenez, a miner from Zaragoza said that he has tried to obtain a concession since 2001, but never received a response from the government. The government typically requires environmental management plans and costly geographic surveys that the small-scale miners can’t afford on their subsistence wages.
Ingeominas, the state agency in charge of distributing mining concessions, declined a request for an interview.