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The new gold rush

Due to economic uncertainty, a rise in inflation, various debt crises, and intense price pressures, global investors are returning to gold as a secure investment. The increase in demand has pushed the price of gold to a new high, fuelling an unprecedented mining boom in countries with rich mineral deposits, such as Colombia.

Rachel Seifert
27 June 2011

Five hundred years ago South America was conquered, colonised and plundered by Europeans for her rich gold and silver deposits. Today, due to the economic uncertainty, a rise in inflation, and various debt crises, global investors have been returning to gold as a safe and secure investment. This increase in demand has pushed the price of gold to a new market high, and is helping to fuel an unprecedented mining boom in countries with rich mineral deposits, such as Colombia, which is being seen as a 'fantastic investment opportunity' by big multi-national corporations.

According to the Financial Times, the demand for gold for investment purposes has recently overtaken the jewellery market for the first time in three decades. This rise in demand and high market price for the precious metal has spurred a major increase in both large scale prospecting and small scale artisanal mining, with a 30% increase in gold mining in Colombia last year.

The Colombian government has recently pledged to double the mining industry within five years and quadruple it in ten, with the Minister for Mining explaining, ‘We have in our backyard what the whole world is looking for… a mining potential that has not been exploited.’ As the Colombian government permits land expropriation for industrial mining and is declaring small-scale mining illegal, there is a renewed clash between the large scale and the artisanal subsistence gold mining industries. It is the small farming and mining communities at the other end of the chain who are paying the price for our scramble for secure investments.

The Colombian Network Against Large Scale Transnational Mining estimates that nearly 40% of the land is now concessioned off for international mining projects, with the majority of the foreign investment from multinationals in the UK, Canada and the US.  One of the largest and most profitable mining companies operating there is AngloGold Ashanti, who is prospecting for gold at two of the most contentious territories in the country where they are in conflict with the local small scale subsistence farming and gold mining communities.

La Colosa, also known as ‘the Giant’, sits in the heart of Colombia, in the central mountain range of the Andes and deep in the basin of the Coello River, and here AngloGold Ashanti are prospecting for gold in the region. The local farming community are protesting against the plans as they are concerned about the use of cyanide, chemical waste, and pollution produced by open pit gold mining that would pour directly into the river basin. The river feeds all of the region’s agricultural production, and so local food and water supplies are at risk of being contaminated.

People do not eat gold and the gold will not be used here,’ says Ramon, a local farmer. ‘This area is an agricultural productive area and supplies the food for the whole department.  At the social level it will only bring ruin for the farmers and small farmers will disappear.’

The pattern of both military and paramilitary violence, arbitrary detentions and systematic human rights abuses are common practice in regions with economic interests, as legal and illegal armies are sent in to ‘protect’ the resources and deal with those opposing company interests. In the La Colosa region, farmers and local leaders have disappeared, been detained and killed, and hundreds of families have been displaced from their land, so that the corporations can take over with no resistance and exploit the gold under their feet.

The people are seen as an obstacle,’ says Ramon. ‘The Colombian state only thinks in the profits of capital and not in the consequences for small farmers. Investors of these mega projects see us as a menace to their economic interests. The easiest way to get rid of this menace is to displace, kill and threaten us.’

The estimated five million internally displaced people in Colombia are mostly small-scale farming and subsistence communities who have been forced to leave over seven million hectares of land to make way for energy and mining exploitation. The majority of the displaced are women and children who have no alternative but to head to the big cities such as Cali, Bogota or Medellin, and to live in makeshift cardboard shacks in the slums, begging for food. They have no skills to survive in the overcrowded urban surroundings, and so are often forced to turn to prostitution or criminal gangs to survive.

This is one of the world’s largest invisible humanitarian crises, but despite a promise from President Santos that the government will return two million hectares of land to displaced families by the end of its four-year term in office, community leaders and those seeking the return of stolen lands are still being ruthlessly hunted.

Despite threats, violence and even killings, some small communities, such as La Toma, nestled in a fertile rift valley in Western Colombia, are starting to fight back. The La Toma community, direct descendants of African slaves brought to these lands centuries ago to dig for gold, are currently resisting the large gold mining corporation AngloGold Ashanti as they prospect for gold there.

Our community has survived since the time of slavery,’ Jose, a local miner says. ‘The only tool we have to survive during all these years has been our traditional way of life, small-scale subsistence gold mining. We make our living from the mining activities here. Everyone eats from what the mine produces. Not only our family, but also the store owner, the bus driver, everybody in the village.’

Informal subsistence gold mining supports millions of people worldwide. In Colombia there are more than two million artisanal gold miners, a third of them women and children, but despite living on top of a rich gold reserve they remain poor. In La Toma, the knowledge of traditional mining methods has been passed down the generations and is often practised in the same manner as it was hundreds of years ago. Families hunt the rivers, mud, rocks and in tunnels, panning for small nuggets of gold, which they sell at the weekly market.

The methods of small scale miners are not necessarily the most efficient, modern, or best practices, for instance their use of mercury to separate the gold can be toxic. But, as a local miner, Carlos, tells us, ‘the difference between the environmental impacts of traditional mining or large scale mining is enormous. Large-scale mining can destroy a mountain within fifteen to thirty days and has a huge impact, since it pollutes water, it kills the fish and it destroys nature.’

Under the modern mantra of efficiency, the Colombian government is currently cracking down on small-scale and community mining through a proposed law that would make it illegal and, instead, favour large industrial mining projects. In a surprising twist, the country’s Constitutional Court has just ruled against this on the grounds that indigenous people were not consulted about its impact on their territories. However, the ruling is not as positive as it sounds.

The ruling does not mean that things are going to be quiet now,’ says Elena, a community spokeswoman.

On the contrary, the risks in this territory have increased. Companies have many economic interests in our territory… They care first and foremost for the money and are supported by this government, which means we cannot guarantee anything.’

As most of Colombia’s fertile lands and natural resources are based on traditional indigenous and African-descendant territories, it is these minority populations who are disproportionately affected by land grabs, displacement and human rights violations, as multinational corporations, with both governmental and global backing, attempt to exploit their lands.

They lose not only their homes, their livelihoods and their food security, but also their culture and their community. ‘When you are displaced,’ says Elena, ‘you don’t have your banana trees, or potatoes, or mining close by. So what do you live off? There is no real option of living outside our territory. Many prefer to be killed in their territory rather than to live elsewhere.’

Despite foreign investment and plenty of natural resources, Colombia is still one of the most unequal countries in South America, with nearly half of the population living in poverty and some of the highest rates of unemployment. Past decades have seen a neglect of basic services such as education, health, shelter and food, leading to unstable living conditions in the territories where multinational corporations have entered to exploit the natural resources. With large-scale mining taking roughly eighty per cent of the revenue out of the country of origin, compared to small-scale industries, which keep eighty per cent in the hands of the local community, the people of La Colosa and La Toma have a lot to fight for.


Additional research and interviews by Moritz Tenthoff

See the full article in The Friend magazine.

Please note: names have been changed in this article to protect people. 

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