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Mining

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By Instituto Escolhas

03 March 2023

5 minute read

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From denouncement to the solution, the combat against illegal gold mining still has a long way to go

After a month the Yanomami tragedy became public, understand where we stand in the fight against illegal gold mining in the Amazon region.
Mining area in the Amazon rainforest, in the state of Pará. Photo: Image Bank/Canva

After images traveled the world revealing the humanitarian crisis in which the Yanomami indigenous people in Roraima find themselves, the gold exploitation and trade have shown the metal’s darker, unglittering side.

In addition to the operations to assist the Yanomami, other initiatives aimed at identifying the main articulators of miners established in the territory were carried out. On February 28, the Federal Police launched a new operation to investigate suspects of being responsible for financing prospectors in the Yanomami indigenous land and the federal government has been striving to maintain the issue in evidence, considered a priority with an interministerial agenda.

So, it is on track? Yes, but far from resolved. As the executive director of Instituto Escolhas pointed out in Míriam Leitão’s newspaper column, published last Sunday, the changes to the legislation that must be made to ensure that those responsible are punished and to extirpate gold mining from the Amazon region are at a very early stage. “From the standpoint of the Official Gazette (DO), we have not yet entered the new government, as far as gold is concerned,” stated Sérgio Leitão in the article.

It is worth recalling that between 2015 and 2020, 229 tons of gold with indications of illegality were traded in Brazil. In 2021 alone, 52.8 tons, or 54% of all the gold extracted in the country were illegally mined, representing approximately 2.5 billion USD.

 

Gold and the law

The Brazilian legislation forbids gold exploitation in Indigenous lands, but this does not seem to matter for those exploiting gold, with mining activities encroaching over those territories as well as on conservation units. And explaining this scenario is as complex as the situation itself. To begin, the present legislation facilitates illegal mining, as Larissa Rodrigues explains:

Permission for small-scale mining can be granted to an individual or to a cooperative. For natural persons there is a limit of 50 ha for mining which expands to 10,000 ha in case of a corporative. But nothing hinders a small-scale miner to obtain several permissions. And he may have a plot in the Amazon, living in São Paulo and using other people to work there. This is made without formal contracts and without ensured rights. And who inspects these agreements? Nobody. Furthermore, workers in the gold mining activity pay everything in gold, which operates as a currency there, in midst of the forest. And if he doesn’t want to, or is unable to leave the forest to sell the gold to a legally established securities trading company, he will certainly place the gold in the hands of one or more middlemen. It is therefore an entire system at the margin of the regulated market.

The only thing the law requires, when the gold reaches a legally established securities trading company (DTVM) – the only institutions authorized by the Brazilian Central Bank to trade gold from miners, is that it proceeds from the same region it was extracted. But who controls this? Who checks the mining license number the miner placed on the paper form he filled out at the DTVM, stating where the gold comes from?

The answer is: nobody. In this case the law accepts the statement based on the principle of good faith. No checks are made; no documents to prove the origin are requested. Despite being in the 21st century, these forms are still filled out on paper. If the gold was illegally mined, but declared as legal at the time of its sale, the money-laundering is concluded.

Added to this is the economic power of the small-scale mining operations, installed in a region of the country with highest social vulnerability, with presence of organized crime increasingly visible in the Amazon and the permanent quest for gold. The result is a tragic scenario, which demands an ongoing strengthening of the country´s organizations for compliance with the environmental legislation and social actions.

Exactly the opposite of what was being done under the previous government, which dismantled the inspection structures while working to strengthen mining activities, creating the Program for Support to the Development of small-scale Artisan Mining, despite all existent evidence that mining is presently being carried out at industrial scale.

A research by MapBiomas identified 2,869 landing strips in the Amazon – almost twice as much registered by the air traffic control agency (ANAC). Of these, 804 (28%) are inside protected areas. There are 75 landing strips in Yanomami indigenous land, with 33.7% located not more than 5 km from some mining site. In the Munduruku Indigenous Land, this figure rises to 80%.

“The number of landing strips, and consequently, airplanes used by mining operations, as well as the heavy machinery employed in the activity, indicate that mining in the Amazon is no longer artisan”, states Tasso Azevedo, MapBiomas general coordinator .

 

The gold today

The extensive offensive by the federal government against exploitation of illegal gold, supported by extensive research of organizations acting for years on the illegal gold issue, (such as Instituto Escolhas), made it clear that to revoke the good faith principle is one of the most urgent strategies to protect mining activities in the Amazon region.

There is increasing pressure for Congress to approve PL 2159/20, with the authorship of ex-Deputy and present Funai President, Joênia Wapichana, establishing criteria for regulation of the gold market, including its traceability.

However, in the aforementioned column of Míriam Leitão, Sérgio Leitão alerts that replacing the good faith rule with a Temporary Measure could make the process more agile without entering into conflict with the processing of the PL, which has a wider scope.

Meanwhile, averting the intrusion of miners into the Yanomami indigenous land is still ongoing, but concerns should be aimed also to the territories of the Munduruku and Kayapó people, from where the denouncements are already beginning to arrive. The International Community is watchful.

Should the standing forest and its people, finally, be more valued than a financial asset or a jewel? It remains to be seen.

Learn here about all the studies on illegal gold performed by Instituto Escolhas.

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