Colombia’s ‘Blood Gold’ Turns Up in Everything From Smartphones to Cars

Source: Bloomberg

Deep in the jungles of Colombia, thousands of small, illegal mining operations, many under the control of Marxist guerrillas or drug traffickers, are working long hours to pull gold out of the ground. Miners are digging in out-of-the-way places such as Timbiquí and Río Quito. From there, the gold is hauled by boat, truck or small airplanes to smelters in Cali and Medellin.

Enter the international gold refiners, armed with certificates of good business practices, who buy the gold and in turn, sell to U.S. corporations large and small. Underscoring just how fraught global supply chains can be, the gold finds its way into products ranging from smartphones to cars and gold coins made by the U.S. Mint.

Corporations, buying in good faith, as well as companies that use gold for jewelry, rely on organizations whose task is assuring the legality of the gold. Many, including Apple Inc. and General Motors Co., also do independent audits of their supply chains, including gold and other metals. Despite those efforts, experts say, illegal gold slips through the system.

“It’s impractical and unfeasible to expect them to trace their gold to the mine of origin,” said Tyler Gillard, a legal adviser to the Organization for Economic Cooperation and Development.

While much has been said about the efforts to crack down on illegal mining in Africa, illicit gold mining and trading in Colombia, Peru and Venezuela continues to flourish quietly. About 85 percent of the 59 tons of gold produced last year in Colombia comes from operations without government licenses or environmental permits, said Santiago Angel, the head of the Colombian mining association. Colombia’s two main legal gold miners, Mineros SA and Gran Colombia Gold Corp., together produced only 7 tons last year.

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