You are here

In Colombia, new gold rush fuels conflict

Section: Daily Dispatches

By Simon Romero
The New York Times
Friday, March 4, 2011

CAUCASIA, Colombia -- Officers pored over intelligence reports describing the movements of two warlords with private armies. Then the helicopters lifted off at dawn, carrying an elite squad armed with assault rifles to the newest front in this country’s long war: gold mines.

Seizing on the decade-long surge in gold prices, combatants from multiple sides of the conflict are shifting into gold mining, among them leftist guerrillas from the Revolutionary Armed Forces of Colombia, or FARC, and fighters from the shadowy armed groups that rose from the ashes of right-wing paramilitary squads.

Their move into gold underscores the many difficulties of ending Colombia’s devilishly complex four-decade war. Even as the Colombian authorities claim victories in bombing top rebel commanders and eradicating vast tracts of coca -- the plant used to make cocaine, long the financial lifeblood of the insurgents -- resilient factions are exploring new sources of money.

"These groups are metamorphosing to take advantage of the opportunities they see," said Jeremy McDermott, a director based in Medellín of InSight, a research organization that focuses on criminal enterprises in Latin America. "They know there’s a huge new revenue stream within their grasp, and they're grabbing it."

... Dispatch continues below ...


Prophecy Resource Spins Off Platinum/Palladium Venture:
World-Class PGM Deposit in Yukon

Company Press Release, January 18, 2011

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY)and Pacific Coast Nickel Corp. announce that they have agreed that PCNC will acquire Prophecy's Nickel PGM projects by issuing common shares to Prophecy.

PCNC will acquire the Wellgreen PGM Ni-Cu and Lynn Lake nickel projects in the Yukon Territory and Manitoba respectively by issuing up to 550 million common shares of PCNC to Prophecy. PCNC has 55.7 million shares outstanding.

Following the transaction:

-- Prophecy will own approximately 90 percent of PCNC.

-- PCNC will consolidate its share capital on a 10 old for one new basis.

-- Prophecy will change its name to Prophecy Coal Corp. and PCNC will be renamed Prophecy Platinum Corp.

-- Prophecy intends to distribute half of its PCNC shares to shareholders pro-rata in accordance with their holdings.

Based on the closing price of the common shares of PCNC on January 17, $0.195 per share, the gross value of the transaction is $107,250,000.

For the complete announcement, please visit:

The result is a gold rush unlike any now under way in South America, both feeding off Colombia's evolving conflict and keeping it alive. Up and down the sweltering river basins around Medellín, miners from across Colombia are flocking to sites where backhoes are tearing up forest and tree canopies, leaving behind lunaresque landscapes.

Some of these small mines have existed for decades, echoes of frenzies that stretch back centuries to the plundering by conquistadors in search of fabled gold deposits. Newer mines emerge on almost a weekly basis, reflecting efforts to find gold while its price remains high. Gold futures climbed this week to a noninflation-adjusted record of $1,441 an ounce.

The gold rush here is just a part of a broader mining boom in Colombia, with gold production climbing more than 30 percent last year and attracting an array of fortune seekers, from multinational corporations to farmers who have left their fields and picked up shovels.

Guerrillas and their paramilitary adversaries have long been involved in mining, often using it and related businesses like cattle ranching to launder money and to extract extortion payments. But military intelligence officials and residents here say that new factors, like the success of American-financed coca eradication projects and the price of gold, have pushed rivals in Colombia’s long drug war to focus elsewhere.

The role of guerrillas and the new criminal syndicates in the pell-mell opening of new mines has made Antioquia -- the department, or province, whose capital is Medellín -- one of Colombia's deadliest and most environmentally devastated regions.

Miners in lawless backlands use liquid mercury to separate gold from river sediments, giving Antioquia one of the highest levels of mercury pollution anywhere, according to United Nations researchers. An estimated 67 tons of it are released into the province's environment each year, by about 30,000 miners taking part in the gold rush.

"Colombia has the shameful first position as the world's largest per-capita mercury polluter from artisanal gold mining," said Marcello Veiga, a mining engineer who led a United Nations study of mercury contamination in Antioquia.

More than 60 grenade attacks were carried out last year in Caucasia, a city of about 100,000 with a downtown district of gold-buying shops. They largely involved two armed groups, the Urabeños and the Rastrojos, vying for control over gold mines and, to some extent, the cocaine trade.

Both groups are thought to have more than 1,200 fighters in their ranks. Each emerged from the paramilitary groups that were supposed to have demobilized years ago. At times, these heirs to the paramilitaries work with FARC, illustrating the post-ideological nature of today's conflict.

But score-settling between these groups and urban FARC operatives also takes place, lifting Caucasia’s homicide rate to 189 per 100,000 inhabitants last year, compared with a national average of only 35 per 100,000, according to federal officials.

"It's hard for anyone to say this out loud, but one reason why the guerrillas and criminal gangs are moving into gold is because it is not just profitable" but because it deals with a legal product, unlike cocaine, said Leiderman Ortíz, the publisher of a small newspaper here who survived a grenade attack on his home last year after he described the new dynamics of the region’s gold trade. "It's a way for them to keep their war alive," he said.

In January, President Juan Manuel Santos said communications intercepted from FARC showed that gold mining had become a source of financing for rebel group.

Mr. Santos said that FARC had named a commander with the nom de guerre Mauricio to oversee the group's gold mining activities, which include outright ownership of some mines and extortion at other mining sites.

In a new strategy, Mr. Santos has ordered raids on more than 50 illegal mines in recent weeks. In one day of coordinated raids in February, security forces fanned out in helicopters from Caucasia into Antioquia and the neighboring region of Córdoba. Members of an elite police squad descended on a mine near the village of Cargueros, where about 100 miners labored under the hot sun.

Wearing sandals and ragged clothing, they watched the helicopters land. Sweat dropped from their brows. They shrugged when asked about the risks of mercury exposure, which damages the brain and central nervous system.

"It's now much harder to grow coca because of eradication, so what are my options?" said one miner, Elkin Jimenez, 30. In a good month, he said, he could earn $1,000, about three times Colombia's minimum wage.

In hushed tones, several of the miners said that they had to pay protection money to work at the mine. Exhibiting palpable fear, none came forward to name the group that controls the site, which military officials say is located in an area disputed by two warlords, Sebastian Chancí of the Urabeños and Luis Enrique Calle of the Rastrojos.

Clinging to their work, the miners reacted fiercely when soldiers tried to arrest one of the men at the site. Grasping sticks, they rushed toward soldiers armed with machine guns, demanding his release.

Military helicopters buzzed like angry wasps above the scene. Soldiers pointed their rifles at the miners, who shouted demands in return. Tension hung in the air until the soldiers released the man.

South of here, more than 5,000 peasants marched to the town of Anorí in January to protest military operations against gold mining and coca cultivation. Protesters said that while FARC had forced them to go, their complaints were real.

Miners and security consultants describe how the area has emerged as a FARC bastion, with the guerrillas charging extortion fees with an accountant's precision: $3,800 a month for each backhoe in operation, $141,000 a month for permission to mine a certain site, and so on.

One miner in Anorí, Octaviano Hernández, put in simple terms how power functioned in the region as the gold rush continued: "All I can say is that he who has the gun gives the orders."


Jenny Carolina Gonzalez and Toby Muse contributed reporting from Bogota, Colombia.

* * *

Support GATA by purchasing a colorful GATA T-shirt:

Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009:

Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon:

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

To contribute to GATA, please visit:


Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface.

"The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit: