- As a marker of its cultural importance and low environmental impact, artisanal gold mining is permitted under Colombia’s 1991 Constitution in Afro-Colombian and Indigenous territories.
- But without formalization, a process that puts the same administrative burdens on small-scale miners as on multinational mining corporations, these miners cannot receive a fair price for the gold they sell.
- Illegal armed groups use criminal mining to fund their activities, often violating fundamental rights in the process.
- Swiss and U.S. international cooperation projects in Colombia have successfully shown how formalization of small-scale miners can protect the environment and produce legal gold, improving the incomes of the miners and boosting revenues for the state.
BOGOTÁ — In Colombia’s Chocó department, renowned by environmentalists for its abundant biodiversity, Afro-Colombian communities collect gold from rivers as part of an ancestral way of life.
“When we talk about productive family units here, mining is just one of those activities,” said Heyler Serbando Moreno Palacios, a traditional miner based in Chocó and the legal representative of the local council of Alto San Juan, an Afro-Colombian community.
Mining here doesn’t have an extractive focus, Palacios said, as community members don’t dedicate all their time to the activity; they also fish, hunt, and cultivate subsistence crops, or pancoger, such as corn, yucca and plantain.
As a mark of this type of mining’s low environmental impact and its cultural importance for both Afro-Colombian and Indigenous communities, Colombia’s 1991 Constitution sets a legislative foundation for special provisions for artisanal, non-mechanical mining to take place in territories governed by these ethnic communities.
Yet the U.N. Office on Drugs and Crime (UNODC) reports that in 2020, 41% of Colombia’s alluvial gold mining — mining from streams or riverbeds — took place in Afro-Colombian territories using heavy machinery. This creates enormous environmental damage, including deforestation, and especially when combined with the use of mercury, which has been banned in the country since 2018.
In Colombia, the illegal gold trade is more profitable than the more notorious cocaine industry; the country’s Ombudsman Office reports that illegal armed groups use illegal mining to fund their activities, often committing human rights violations in the process.
But mining that doesn’t meet the requirements to be legal, often because the mining operation has not been formalized, isn’t necessarily criminal mining, which is used to finance criminal activities.
Formalization in Colombia means that a miner complies with all the legal, technical, environmental, economic, social and labor requirements to be recognized as legal. Yet for small-scale miners, the process of formalization is extremely burdensome and costly, leading most to mine illegally.
The Colombian government’s environmental and technical requirements to operate legally are undifferentiated as to type, size and location of the mine, which means that to operate legally, a small miner like Palacios needs to meet the same standards as a large, multinational mining company.
Palacios and 57 mining families in his community have been trying to formalize since 2015, yet they still don’t have their mining titles because they haven’t received environmental approval from the National Environmental Licensing Agency (ANLA).
“It has been a long journey for us,” Palacios said. “It has been exhausting and left many miners feeling demotivated, but we continue trying.”
The situation faced by Palacios and his community is part of a wider trend in Chocó, where there are an estimated 50,000 small-scale gold miners. A 2020 report by Germanwatch, a German environmental and sustainable development NGO, noted that almost none of the small-scale miners in Chocó have mining titles. This has led to mining rights in Indigenous and Afro-Colombian territories being handed over by the government to multinationals like AngloGold Ashanti.
Not being formalized also means that miners like Palacios can’t open bank accounts and that they have to sell to intermediaries at prices up to 40% lower than the international gold price, according to Conalminercol, Colombia’s national confederation of informal miners. And as these are black market sales, the money can then be used to finance criminal activities and launder illicitly gained funds.
“The frustration is that need to comply with all requirements, but then you not selling the gold at a fair price,” Palacios said.
International cooperation and formalization
To address some of the challenges faced by small miners, Swiss and U.S. groups are implementing projects in Colombia that aim to use formalization to improve the incomes of small-scale miners while protecting the environment.
The Swiss “Better Gold Initiative” aims to incentivize the formalization of small gold miners by paying them a premium for producing “responsible” gold that adheres to 14 social and environmental criteria, including not using mercury. The initiative also connects the participating miners with stakeholders in the international gold trade, from banks and refineries to luxury watch and jewelry makers like Chopard and Cartier.
Thomas Hentschel, global director of the Better Gold Initiative, told Mongabay that the initiative aims to cut out the middlemen and ensure that participating miners in Colombia, Bolivia and Peru benefit from a $1 per gram premium on top of the international market price they receive. This premium is then reinvested into technical assistance for the miners, as well as social and environmental projects in the host communities.
In Chocó, the Better Gold Initiative works with some 1,400 miners who produce more than 600 kilograms (21,200 ounces) of responsible gold per year, worth more than $30 million, Hentschel said. He added the initiative aims to expand to work with 3,000 gold miners in Chocó and export about 1 metric ton (35,300 ounces) of responsible gold per year.
The U.S. government’s Oro Legal (Legal Gold) program ran from September 2015 to March 2021 and reported legalizing and formalizing 146 small-scale mining projects that generated more than $194 million in legal gold sales. This then led to the Colombian government receiving almost $14.4 million in royalties, taxes and social security payments.
Additionally, the program reports that through its interventions it prevented 70 metric tons of mercury from being used and it rehabilitated approximately 17,000 hectares (42,000 acres) of degraded ex-mining land, equivalent to about 18% of all land deforested by illicit gold mining in Colombia since 2016.
Oro Legal also created CORCRESER, or the Regional Service Centers Corporation, to build and run service centers that assist miners not only with the formalization process but with training in areas such as business and environmental standards. Additionally, it provides equipment and laboratory facilities to analyze and process gold.
Beatriz Duque, CORCRESER’s executive director, worked for 12 years in the Ministry of Mines and Energy, most recently as the director of mines, responsible for Colombia’s mining policies. She told Mongabay that services provided by CORCRESER help to ensure that the gold produced by small miners can be traced to its source, ensuring that it has been produced legally and in an environmentally friendly way.
She said miners can then be connected to formal markets, thus bypassing intermediaries, and ensuring they receive a fair price for their gold. CORCRESER now runs independently, with the first service center opened in 2021 in Tadó municipality, Chocó, where Palacios is based.
The road ahead
Colombia’s Universidad de los Andes published research in 2020 that reviewed the academic literature on artisanal and small-scale mining, and strategies for formalization and differentiation from illegal mining. The research underscored that a central issue is to provide better incentives for formalization and that the government needs to design a less bureaucratic formalization process.
The report also reflects on the need for systematic and empirical evaluations of formalization programs that have been implemented in the Global South. It also recommends a research agenda that differentiates illegal mining from informal mining and, consequently, promotes the design of differentiated intervention policies, for illegal mining with a security component and for informal mining in terms of rural development.
“When you mine, you are dealing with a finite resource and every day it gets scarcer,” Palacios said. “We want mining that is responsible, but also sustainable in all aspects, both environmentally and economically.”