Gold and Cocaine: A Toxic Alliance Threatening the Amazon and Its Peoples

Written on 05 January 2025. Posted in News

BY TORA JENSEN FOR INDIGENOUS DEBATES

The quest for gold has shaped human history for centuries, driving exploration, conquest, and exploitation. For the Spanish Crown, it was the lure of gold that propelled the second expedition to the Americas and it became a pivotal factor in the subsequent colonization of the continent. The legacy of gold mining in Latin America, however, has become a modern crisis with far-reaching consequences. The invasion of Indigenous territories by coca cultivation, trafficking routes, and illegal mining operations is provoking displacement, violence, and environmental destruction.

Today, soaring gold prices have made illegal gold mining a lucrative enterprise for criminal organizations and armed groups. According to the Amazon Network of Georeferenced Socio-Environmental Information (RAISG), illegal gold mining is spreading across the Amazon Basin, affecting all countries in the region.

At the same time, the global cocaine market is experiencing unprecedented growth. The UN World Drug Report 2024 revealed that cocaine production reached 2,700 tons in 2022, a 20% increase on the previous year and triple the levels of a decade ago.

While these two illicit economies—gold and cocaine—may seem separate at first glance, they are becoming increasingly intertwined. This convergence poses severe threats to the Amazon’s Indigenous peoples and has devastating environmental consequences for the rainforest.

A Web of Illicit Economies in the Amazon

According to the report Amazon Underworld, the Amazon basin has become a major transit hub for Latin American criminal economies. The report reveals that armed groups are active in 70% of the surveyed municipalities across six countries and that nearly all the major criminal organizations in Latin America are involved in some aspect of illegal mining, including controlling concessions, extorting miners, trafficking mercury, or smuggling gold. The report reveals that the areas most affected by illegal mining are southern Venezuela, particularly the state of Bolívar, and the Brazilian states of Pará and Roraima. However, illegal gold mining is also expanding in Ecuador and Peru.

The Yanomami territory in Brazil exemplifies the crisis. The influx of illegal miners has devastated Indigenous lands, with criminal groups such as the Primeiro Comando da Capital (PCC) infiltrating operations. Known primarily for drug trafficking, the PCC has expanded into the illegal gold trade, offering protection to miners, controlling dredging operations, and imposing “taxes” on production, according to the UN World Drug report 2023. While the PCC is one of the larger, more organized criminal groups operating in the Amazon, the region’s criminal landscape remains fragmented.

Colombia’s 2016 peace accords, which led to the demobilization of 13,000 FARC combatants, created a power vacuum that smaller armed groups and dissident FARC factions quickly moved to fill. This has resulted in intense territorial disputes over key areas used for trafficking routes, coca plantations, and mineral-rich zones. A report by the Department Against Transnational Crime (DTOC) highlights that controlling gold-rich areas is highly valuable for criminal organizations, as soaring gold prices and rising global demand have made gold extremely profitable—at times even more lucrative than drug trafficking.

Money laundering in the Peruvian Amazon

Gold also plays a role in money laundering, with criminal organizations using it to legitimize profits from drug trafficking. This is particularly evident in Peru, where gold mining accounts for a significant portion of the economy. The Superintendency of Banking, Insurance, and Private Pension Funds of Peru estimates that between 30 and 70% of gold exports could come from illegal sources. The 2023 UN World Drug Report highlights that gold mining is one of several industries in which drug traffickers in Peru are actively involved, with drug trafficking revenues being funneled into mining operations, funding dredgers, backhoes, and other heavy machinery.

Vladimir Pinto, a lawyer and coordinator for Amazon Watch in Peru, explains that mining, historically central to Peru’s economy, has expanded dramatically due to rising gold prices and profitability. This expansion has shifted from the Andes to the Amazon, with large-scale illicit gold mining particularly prevalent in the region of Madre de Dios. Pinto explains that: “It’s easier to launder money from narcotrafficking through mining because, with drugs, the product is illegal at every stage—production, sale, and consumption. With gold, only the extraction is illegal.” He further explains that, once gold is extracted, it can be more easily converted into a legal and profitable resource than cocaine. This dynamic is blurring the lines between the mining and drug businesses.

While mechanisms exist to oversee and trace whether gold is legally or illegally mined in Peru, Pinto notes these systems are easily bypassed. Producers self-report information on the gold’s origin, which is not independently verified, enabling the laundering of illicit gold. This “whitewashing” of gold extends beyond Peru. An investigation by Convoca uncovered a sophisticated system of laundering illegal gold across Bolivia, Brazil, Colombia, and Ecuador. The tactics include falsified purchase and sale invoices, fraudulent authorizations, and non-existent mining concessions, revealing the widespread and systematic nature of the problem.

Ecuador’s Expanding Illicit Mining Crisis

Ecuador has witnessed a dramatic increase in illegal gold mining, with a 325% rise between 2015 and 2021. Nearly half of this activity occurs on Indigenous lands. Ecuadorian sociologist Pablo Ortiz-T explains that, while the country is not a major cocaine producer, it serves as a critical transit route for Colombian cocaine destined for Europe. According to Amazon Watch, criminal groups like Los Lobos and Los Choneros, often working with Colombian FARC dissidents, have established a foothold in Ecuador’s illicit gold mining sector.

Organized criminal groups control concessions, extort local miners, and smuggle gold across borders in Ecuador. Ortiz-T highlights a pivotal shift during Rafael Correa’s presidency, which actively supported the sector and elevated the industry’s economic significance in Ecuador. Prior to this, gold mining had not been as prominent in Ecuador as it has been in Peru or Bolivia. This political backing elevated mining’s importance, he says, but also opened the door for illegal operations to flourish, he explains. Miners now encroach on protected areas, threatening the environment and Indigenous livelihoods.

In Napo Province, illegal mining has brought violence, pollution, and social instability to Kichwa communities. A local Kichwa activist, who wishes to remain anonymous for safety reasons, describes how mining companies along the Jatunyacu River are seizing land through coercion or by exploiting economic desperation. The influx of miners has disrupted traditional practices, polluted rivers, and triggered internal conflicts.

The activist notes that these miners are highly organized and often involved in drug trafficking and other violent activities, such as robbery. According to a report by Amazon Watch on illegal mining in Ecuador, criminal organizations initially provide armed protection to irregular miners and extort legal concessions. Over time, these groups intensify their demands, forcing miners to surrender part of their daily production or kidnapping the owners of legal mines to demand ransoms. Eventually, criminal gangs seek to fully control the mining concessions, expelling the owners and taking over their operations and equipment.

The Breakdown of the Social Fabric

The environmental impact of illicit mining is particularly severe, explains the Kichwa activist. The gold trade has contaminated the river that her community relies on for fish, a critical food source. While there are no mining projects in her immediate village, upstream activities are polluting the water and killing fish, directly affecting her community’s livelihood. This issue extends beyond her village; in Napo Province, illegal miners have deforested 832 hectares since 2017, releasing heavy metals such as copper, iron, lead, and mercury into the rivers. These pollutants have had devastating effects on Indigenous health and livelihoods.

The social consequences of illegal mining on Indigenous lands are deeply concerning, as the influx of miners disrupts the social fabric of these communities. Internal conflicts are arising from transactions where Indigenous people sell their land for mining purposes. Those who sell their land are often coerced into supporting mining operations, explains the Kichwa activist, creating tensions between individuals like herself, who resist exploitative interests, and others who prioritize short-term gains over long-term sustainability. This exploitation and environmental degradation threaten the survival of all communities in the region. Additionally, the situation has triggered a rise in alcoholism among families who sell their land, further destabilizing the area, which has become increasingly dangerous.

Additionally, the activist explains that the miners’ presence is eroding traditional knowledge. The younger generation is being recruited by outsiders to engage in illicit activities and is beginning to adopt their behaviors. “Our consciousness is slowly dying,” she laments, adding that speaking out, as she does, comes with significant risks of persecution. According to Pablo Ortiz-T, who works closely with Kichwa communities in the Napo Province, many people have been forced to flee their homes due to threats.

Confronting a Multifaceted Crisis

The illicit economies of gold and cocaine in the Amazon drive deforestation, violence, and displacement, posing a complex crisis without simple solutions. The individuals interviewed for this article highlighted various interconnected aspects of the issue, all of which contribute to the problem and must be addressed to achieve any meaningful improvement to the current situation. Pablo Ortiz-T highlights the need for stricter oversight of gold buyers and stronger institutions, noting that weak governance and the political influence of criminal groups is a critical problem. Vladimir Pinto observes that governments often frame these issues narrowly as police or judicial challenges, ignoring their deeper social roots. He further emphasizes the importance of incorporating Indigenous voices in decision-making and recognizing that as long as there is a global demand for gold and drugs, someone will step in to supply them.

The Kichwa activist advocates for economic initiatives that allow communities to thrive without resorting to selling their land. She highlights the potential of traditional, chemical-free gold panning—a practice passed down through generations of Indigenous women, who also craft jewelry from the gold. Expanding this into a local business could ensure sustainability, keep the industry rooted in the community, and reduce the intrusion of outsiders. She also emphasizes the need to restore fish habitats damaged by mining and raise community awareness about the limited benefits of mining profits. However, she stresses that these projects require funding and, while many people approach her and other community members to discuss the issues they face, she expresses frustration that the support often promised does not materialize.

The intertwining illicit economies of gold and cocaine are driving deforestation, violence, and displacement across the Amazon, with Indigenous Peoples bearing the brunt of the crisis They have faced similar forms of exploitation for decades. As the Kichwa activist poignantly stated, “Before, it was the Spanish who came and invaded our lands, violated our women. Now, criminals come, organized to exploit our lands, ruining everything.” Her words serve as a stark reminder that the fight against illicit economies is confrontation of a colonial history of violence and exploitation.

Tora Aurora Jensen is an intern at IWGIA and a master's student in anthropology at Copenhagen University.

Cover photo: 150 Wampi fighters from the Peruvian Amazon invade an illegal mining site, leading the miners to suspend their activities for a few days. Photo: Jacob Balzani Lööv

Tags: Indigenous Debates