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How wildcat mining is behind the Yanomami crisis in Brazil

The images that circulated around the world of the Yanonami people suffering from malnutrition and hunger are the result of years of advancing wildcat mining in the Amazon rainforest.

The Brazilian government last week declared a public health emergency for the Yanomami people.

According to the Indigenous People Minister Sonia Guajajara, who visited the Roraima state with Brazilian President Lula, 570 Yanomami children have died during Brazil’s past administration, under president Bolsonaro.

There is strong evidence of “genocide,” the country’s Justice Minister Flavio Dino said on Monday.

Bolsonaro, in office from 2019 to 2023, based his presidential campaign on pledges to increase development in the Amazon. His term was marked by a move to allow mining in Indigenous territories and a 15-year high in deforestation in the Amazon.

20,000 wildcat miners

Brazil produced 47.9 tonnes of gold with evidence of illegality in 2021, equivalent to 54% of the national production, according to the NOG Instituto Escolhas. Almost two-thirds of that gold came from the Amazon. 

“There are around 20,000 wildcat miners in the Yanomami land. All the gold that is mined in Roraima is illegal,” said Larissa Rodrigues, Portfolio Manager at Instituto Escolhas.

“The wildcat miners occupy an area equivalent to 1,500 soccer fields, with heavy equipment and operations similar to small miners,” she said.

According to Rodrigues, the illegal miners are behind attacks against the indigenous population, and pollution of the soil and waters because of the use of mercury in gold extraction.

“Illegal miners also bring diseases to indigenous territory, contaminating those populations.”

Sophisticated crime

Between 2015 and 2020, Brazil traded 229 tons of gold with evidence of illegality. This indicates that almost half of the gold produced and exported by the country had an unknown origin, according to a study by Instituto Escolhas.

Of the total volume of gold with evidence of illegality, more than half came from the Amazon (54%).

The gold extracted illegally could be ending up in markets like India, Canada, Switzerland, and the United Kingdom because most of the illegal gold can be easily declared legal by wildcat miners when sold to Distribuidoras De Titulos e Valores Mobiliarios (DTVMs).

When miners sell gold to a DTVM, they fill out a paper form asking for the gold’s origin. The information is not checked and the provision of documents providing proof of origin is not required. Under current law, the declaration of origin is based on good faith.

“Here we are in the 21st century and companies still use paper forms. The gold is laundered by simply declaring illegally mined gold legal at the moment of sale. Just like that,” Instituto Escolhas project manager Juliana Siqueira-Gay told MINING.COM.

There are currently five main DTVMs operating in Brazil: F.D’Gold, OM (Ourominas), Parmetal, Fenix and Carol4.

Three of them — F.D’Gold, Carol and Ourominas — are already part of recent lawsuits by the Brazilian Federal Public Ministry (MPF) because of suspicious operations.

A study by Instituto Escolhas found that F.D’Gold, the DTVM that trades most gold in the country, is run by Dirceu Frederico Sobrinho. From 2015 to 2020, he owned 32 gold fields in the Amazon, but none of them were registered for the commercialization of gold in the analyzed period.

The second biggest DTVM is Ourominas. One of its partners, Juarez de Oliveira e Silva Filho, has business and personal connections that include a holding company in Dubai and relationships with the media and Brazilian politics.

Parmetal is the forth DTVM that moves more gold in the country. One of its representatives is Valdemir de Melo, who also owns two holding companies. Melo was arrested in 2012 in a Federal Police operation
to dismantle a scheme for extracting and selling illegal gold from Indigenous Lands in the Amazon.

The president of the industry group Ibram (Brazilian Mining Institute) Raul Jungmann said in an interview with GloboNews, that it is necessary to adopt measures to financially stifle illegal mining on indigenous lands.

According to Jungmann, whose group represents major miners including Vale, this is the only way for criminal groups to stop invading reservations like the Yanomami Indigenous Land.

Last week, the Securities and Exchange Commission of Brazil opened an administrative proceeding to investigate allegations against the DTVMs.

Source: MINING.COM – Read More