Colombia's gold mining boom offers silver lining for paramilitaries, guerillas

The Colombian government is worried that the nation's gold wealth is attracting criminals, paramilitaries and guerilla groups who are eager to expand their drug-running and extortion rackets with legally salable gold.

A report by the Council on Hemispheric Affairs (COHA) asserts the surge in gold prices is opening a new front in Colombia's longstanding civil war as multiple paramilitary and guerilla groups target gold mining to make up for lost cocaine trade revenues.

"These groups are metamorphosing to take advance of the opportunities they see," Jeremy McDermott of Insight, a research group that focuses on crime in Latin America, told the New York Times earlier this year.

They know there's a huge new revenue stream within their grasp and they're grabbing it.

In January, President Juan Manuel Santos said communications intercepted from FARC had revealed that gold mining has become a source of financing for the rebel group.

Among the paramilitary and guerilla groups now extorting security fees and mining equipment taxes from local informal miners in the gold departments of Antioquia, Córdoba and Valle de Cauca are the Rastrojos, the Urabeños, the Paisas, the Revolutionary Armed Forces of Colombia (FARC) and the Oficina de Envigado, according to the COHA report.

Colombia's current Minister of Mining and Energy, Carlos Rodado, and the president of mining company Mineros, S.A., Beatriz Uribe have both suggested that at least half of the coal and gold mines in Colombia are illegal.

Colombia's National Association of Exporters, Analdex, estimates 30 million pesos (US$16,835) in royalties are lost in foreign gold sales.

In July, the Colombian Chamber of Mining estimated that the mining industry will lose one billion Columbian pesos or US$563,234 to illegal mining.

"National army protection of work sites is a standard stipulation in mining contracts between the Colombian government and multinational companies," said COHA Research Associate Paula Lopez-Gamundi, who authored the think tank's report on Colombian mining.

"However, informal mining operations, many of which have been passed down by families for generations, are left with no protection to defend themselves against the often extortive practices of paramilitary and guerrilla forces."

In January of this year, "amid a government crackdown and illicit crops and illegal mining near the town of Anori, the FARC dynamited a bridge and were said to have forced thousands of villagers from their home," according to a report in the Miami Herald.

"Moreover, with no clear distinction between informal and illegal mining at the federal level, local miners face the same punitive measures as paramilitary miners," Lopez-Gamundi suggested. In fact, local miners have organized large protests against military operations conducted against gold mining.

Human Rights NGOs MiningWatch Canada, Inter Pares and CENSAT Agua Viva claim that paramilitaries and Columbian solders have reportedly told local residents that "their operations are designed to protect the interest of international mining companies in the areas."

"While there should be a vehement campaign against illegal mining, the Colombian government and armed forces must make a clear distinction between paramilitary and guerilla run illegal mining, and informal mining," Lopez-Gamundi advocated.