Brazil prosecutors seek ban on all gold mining in hard-hit Amazonian region – Mongabay.com

  • Gold mining activities may be suspended in the southwest of Pará state, in the Brazilian Amazon, if authorities fail to implement measures to increase control and traceability over the country’s gold mining industry.
  • That’s the main request of a lawsuit filed this week by the Federal Public Ministry based on a new study pointing to the municipalities of southwest Pará as being responsible for 85% of cases of gold laundering in Brazil in 2019 and 2020.
  • The study, by researchers from the Federal University of Minas Gerais (UFMG), also concluded that almost 30% of the 174 metric tons of gold sold in Brazil in the last two years was associated with some kind of irregularity, amounting to 9.1 billion reais ($1.8 billion) of potentially illegal gold — a value more than three times the Ministry of Environment’s 2020 budget.
  • Experts say Brazilian law leaves the door open to gold laundering, by permitting miners to self-declare the origin of their gold and not requiring any verification; the process remains manual, with no electronic invoices to control the gold trade in the country.

Gold mining activities in a region of the Brazilian Amazon ravaged by illegal operations could be suspended after prosecutors filed a lawsuit this week.

In its lawsuit, the Federal Public Ministry has requested the total suspension of the extraction, trading and exportation of gold in the southwest region of Pará state. The move is considered an extreme measure in case the federal government fails to implement a series of actions to stop the escalation of invasions and violence promoted by “gangs of illegal miners” affecting mainly the Munduruku and Kayapó Indigenous reserves.

The lawsuit was based on a new study authored by researchers from the Federal University of Minas Gerais (UFMG) pointing to the Pará municipalities of Itaituba, Jacareacanga and Novo Progresso as the main hub of gold laundering in Brazil. From analyzing Brazil’s total gold production in 2019 and 2020, the researchers concluded that 85% of cases of gold laundering happened in this region, amounting to 5.4 metric tons of illegal gold.

The Federal Public Ministry has demanded Brazilian authorities fulfill 11 measures to tackle illegal mining in the southwest of Pará state. One of them is the expulsion of illegal gold miners from the Munduruku Indigenous Reserve, which has been under intense attack since March. Image courtesy of Marcos Amend/Greenpeace.

The study also concluded that almost 30% of the 174 metric tons of gold sold in Brazil during this period was associated with some kind of irregularity. That translates to a total of 9.1 billion reais ($1.8 billion) of potentially illegal gold — a value more than three times the Ministry of Environment’s 2020 budget. Pará leads in terms of illegal gold extraction in the country: of the 30.3 metric tons of the metal produced in the state in 2019 and 2020, nearly three-fifths — 17.7 metric tons — are associated with some kind of irregularity, according to the researchers.

The real figures are likely to be much greater, since the researchers only considered total gold production tracked by the CFEM federal tax associated with gold mining. “This is the tip of the iceberg,” Roani Rajão, one of the six co-authors of the study, told Mongabay. “It is what we can see by analyzing the circulation of gold that pays taxes. There may be a much larger circulation of gold without even these records.”

The MPF’s lawsuit, signed by four federal prosecutors, denounces the inaction of the mining agency regulator, the ANM, and the Central Bank of Brazil, which are responsible for monitoring gold production and trade. “It is proven that the defendants, by their illegal and unconstitutional omission, promote the irrigation of the market with gold of illegal origin extracted from Indigenous lands,” they wrote.

A Central Bank spokeswoman said by email it wouldn’t comment, while the ANM didn’t reply to a request for comment.

The prosecutors listed 11 measures they demanded be taken by the authorities, starting with the expulsion of illegal miners (known as garimpeiros) from Indigenous reserves — a measure that the Supreme Federal Court (STF) has already ordered — and the implementation of a tracing system for gold. A spokesman from APIB, Brazil’s largest Indigenous organization, which filed the lawsuit before the STF, told Mongabay by phone the decision wasn’t fulfilled; the STF and the Ministry of Justice didn’t reply to requests for comment.

Prosecutors also demanded the federal government abstain from encouraging illegal mining activity. President Jair Bolsonaro has defended the garimpeiros on many occasions. In August 2020, an airplane from the Brazilian Air Force was used to take a group of illegal miners from Jacareacanga, in Pará, to a meeting at the Ministry of Environment in the federal capital, Brasília.

If the government fails to implement the measures, the MPF is demanding the suspension of the extraction, trading and exportation of gold in the southwest Pará region. The lawsuit was filed at a federal court in Itaituba.

According to a study from the Federal University of Minas Gerais, 85% of all cases of gold laundering in Brazil in 2019 and 2020 occurred in the southwest of Pará state. Experts say the legislative framework around the gold trade in Brazil is an invitation to fraud, leaving it up to the miners to declare the origin of their gold, with no verification carried out. Image courtesy of Marcos Amend/Greenpeace.

An invitation to fraud

Experts attribute the prolific circulation of illegal gold in Brazil to the prevailing legislative framework that they characterize as an invitation to fraud. “The Brazilian mining sector is like in the Old West,” says Larissa Rodrigues, manager of projects and products at the Escolhas Institute, a nonprofit advocating for stricter requirements for the gold supply chain in Brazil.

Gold laundering, she says, happens when an individual sells illegally mined gold to financial institutions allowed to buy gold from garimpos, as the mining sites operated by individuals or cooperatives are called. “The law states that the garimpeiros need to fill out a paper form saying where the gold comes from. But it is self-declaratory, he doesn’t need to present any document proving it. No one will verify if the gold actually came from that mining operation where he said it came from,” Rodrigues told Mongabay in a video call. Usually, illegal miners simply state that their gold came from a legal mine, and no questions are asked: the illegal gold becomes legal, Rodrigues said.

These registers are filled out manually, since Brazil doesn’t have an electronic invoice for gold — one of the demands made by the MPF in its lawsuit. The Escolhas Institute has also filed a bill in the Brazilian Congress proposing the creation of a tracking system for gold.

Indigenous people the main victims

The MPF’s lawsuit highlights that Indigenous people are the main victims of illegal mining in the southwest of Pará. Mercury, used by garimpeiros to extract the gold from the ore, contaminates the water sources that Indigenous people depend on. This has resulted in communities being tested with mercury concentrations “at alarming levels, well above the safety values set by the World Health Organization, and compromising their food and nutritional security,” prosecutors wrote. They cite sexual assault of women and children by garimpeiros, as well as drug and gun trafficking as among the other crimes associated with illegal miners.

The Munduruku Indigenous Reserve, located in Jacareacanga municipality, has been under intense attack since March, when heavily armed garimpeiros with air support from helicopters invaded the territory. In May, they attacked the houses of Indigenous leaders and a federal security forcebase that had been established there to fight the criminals. In June, a bus carrying Indigenous leaders was attacked by illegal miners.

“The advance of garimpeiros brought a lot of violence to our reserve, a lot of threats. Some of our people have been recruited by the garimpeiros in exchange for money,” Ediene Kirixi Munduruku, a female Munduruku leader, told Mongabay in a phone interview in late June.

Kayapó Indigenous people monitor their territory in search of invaders. Alongside the Munduruku, they are the main victims of illegal mining in the southeast of Pará state. Mercury, used to extract the gold from the ore, is contaminating the population and compromising their food and nutritional security. Image courtesy of Instituto Kabu.

On the Yanomami Indigenous Reserve in Brazil’s Roraima state, illegal gold mining caused an estimated $429 million in social and environmental damages last year, according to a new impacts calculator launched last month by the MPF in partnership with the Conservation Strategy Fund Brazil (CSF-Brazil), the nonprofit responsible for the creation of the tool.

Mining on Indigenous territory is prohibited under Brazil’s Constitution, but that hasn’t stopped illegal operators — or even legal ones seeking to mine there. Mining companies filed a (145 from January to early November) to mine on Indigenous territories, according to the Amazônia Minada project, which monitors such applications.

“Whoever arrives first and makes an application for an area, takes it, and then nobody else has access to that area. So these areas inside Indigenous territories are being requested almost like a future market reserve, betting on the approval of the bill that releases mining in these reserves,” Rodrigues says, referring to a federal government bill that would permit mining inside Indigenous reserves.

This strategy is used not only by garimpeiros, but also by large mining multinationals like Anglo American, which had 27 requests pending to prospect for copper inside Indigenous reserves. Pressured by Indigenous organizations, the U.K.-listed company said it had withdrawn these requests in May.

Banner image of an overflight view in the southwest region of Pará by Marizilda Cruppe/Amazônia Real/Amazon Watch via Flickr (CC BY-NC-SA 2.0).

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