Peru crackdown on illegal gold leads to new smuggling routes

The proliferation of smugglers' routes into Bolivia shows how difficult it is to eradicate illegal mining without better coordination across frontiers.

Peru crackdown on illegal gold leads to new smuggling routes

World Bulletin/News Desk

A crackdown on illegal gold mining in Peru has spawned new smuggling routes through its porous border with Bolivia with some gangs using human mules, armored cars and light aircraft to evade capture.

The gold is ghosted across jungles, rainforest and Lake Titicaca on the mountainous border, and is then sold to dealers who process the precious metal for export out of Bolivia's capital La Paz, Peruvian officials say.

Bolivia, a relatively small gold producer which has commissioned no new large mines in 2014, officially exported 24 tonnes of gold between January and August, data from Bolivia's statistics agency shows.

That is six times the amount of gold Bolivia's miners produced in the first seven months of 2014 and more than three times the total amount it exported in all of 2013, illustrating how Peruvian gold is being diverted.

Nearly all of Bolivia's exported gold was shipped to the United States, government data shows.

Peruvian President Ollanta Humala launched a clampdown late last year to tackle a decade-long boom in wildcat gold mining that has destroyed swathes of Peru's Amazon forest and laced its rivers with mercury.

But the proliferation of smugglers' routes into Bolivia shows how difficult it is to eradicate illegal mining without better coordination across frontiers.

"They move much faster than we do," said Peruvian customs official Gustavo Romero who is investigating the illicit trade. "We close one door and they've already opened another."

Bolivian customs and mining officials declined to comment.

Legal gold miners in Peru reported 178 tonnes of gold for export with the mines ministry last year. Peruvian customs, however, registered gold exports totalling 290 tonnes.

A ministry source said the 112 tonne difference - worth around $3 billion, according to customs export data - was mostly attributed to the gold extracted by wildcat miners and sold down a chain to exporters.

"We couldn't allow this giant flow of illegal gold passing by right under our noses," said Romero. "But we have 1,000 km of border with Bolivia, and every one of those kilometers is entirely passable."

Asked if Peruvian gold is being smuggled into Bolivia for export to the United States, the U.S. Department of Homeland Security said Washington and Lima were discussing the sharing of trade data to investigate asset laundering.


One gold dealer who smuggles ore through Bolivia said miners in Peru's Amazon region of Madre de Dios had been hit but output from illegal mines across Peru has likely only slipped to 4-5 tonnes a month from 8 tonnes before the crackdown.

"We've taken gold by motorcycle, by mule, by armored car, and never the same way," the Lima-based dealer said. Once the gold crosses into Bolivia, it is dropped at safe houses before being delivered to cash buyers.

The dealer, who declined to be named but met Reuters on two separate occasions in coffee shops, said the surest way to avoid losing a consignment to bandits stalking lawless borderlands was to fly the gold into Bolivia using light aircraft.

Peruvian law prohibits the government from shooting down small aircraft.

"Gold is heavy and can unbalance the plane, so you can only really take up to 200 kg at a time," said the dealer. "But it's a lot safer than by ground."

The gold smuggling is a reversal of illegal flows before the crackdown, when Bolivian ore was taken to Peru to avoid taxes, said Hector Cordova, a former Bolivian mining minister.

Peru's attempted cleanup is its latest effort to control a gold rush in the Amazon jungle, where migrant workers, often from the impoverished highlands, tear through river beds in search of gold nuggets.

The government has targeted companies exporting mined ore, restricted fuel and mercury used in illegal mining hot spots and sent troops to blow up mining equipment in unauthorized camps.

In June, Peru's illegal mining czar, Daniel Urresti, declared most clandestine mining in Madre de Dios snuffed out. Shortly after, the retired general was promoted to interior minister.

Still, he acknowledged the proliferation of smuggling gangs based in Puno, another border region, saying large numbers of people cross the frontier "like ants", each carrying small quantities of gold.

The influx of illegal Peruvian gold swamps Bolivia's local markets and depresses prices, said Edmundo Polo, head of Ferreco, a federation of small-scale miners.

"Our own gold buyers are buying gold from Peruvians," Polo said. "It's no secret."

Part of the surge in Bolivian gold exports might be due to less ore being smuggled out via Peru, as well as efforts to stop exporters manipulating a customs loophole and disguising gold shipments as mining waste, said Cordova.

"But too much gold is being exported for that to explain the entire difference," he said. "It's because of the measures Peru is taking."

Güncelleme Tarihi: 25 Kasım 2014, 15:09