HomeNewsAnalysisColombia: From Coca Cultivation to Gold Mining and Back
ANALYSIS

Colombia: From Coca Cultivation to Gold Mining and Back

COCA / 22 SEP 2015 BY JAMES BARGENT EN

It was one of the few successful drug crop substitutions in Colombia’s history -- albeit one led by armed groups and an underground economy. But now, the migration from coca cultivation to illegal gold mining in the north of the country has been thrown into reverse, and regions where cocaine production was in decline are witnessing a coca revival.

The latest coca survey carried out by the United Nations Office on Drugs and Crime (UNODC) (pdf) showed a huge increase in coca cultivation in Colombia in 2014, a rise researchers attributed to a complex interplay of evolving conditions.

However, even the 44 percent overall rise was dwarfed by the increase in the northern province of Antioquia, where cultivation leapt 131 percent. And for those in the epicenter of Antioquian production -- the sub-region of Bajo Cauca -- there was one reason above all: the bursting of the illegal gold mining bubble.

“A lot of people left behind the cocaine and coca business to get involved in mining,” said Ramiro Restrepo, the president of the Bajo Cauca Miners Association. “And now it is the reverse, gold has gone down and a lot of people are saying they’d be better off back where they were, that coca is the only thing that’s profitable.”

SEE ALSO: Coverage of Coca

This illicit labor migration is largely driven by market forces, but those in the region say it is also a direct result of the state’s policies. And while these policies may have helped curb the expansion of the illegal mining trade, the return to coca shows they have done little to break the vicious circle of poverty and criminal economies that afflicts regions such as Bajo Cauca.

A Criminal Crop Substitution

Consisting of six municipalities in the north of Antioquia, Bajo Cauca is one of many areas in Colombia cursed by its resource wealth and fertile lands. The isolated hills on the edges of the region have rich soil and the perfect climate for growing coca, while the river valleys below contain a wealth of gold.

These resources -- along with Bajo Cauca’s strategic location as a corridor to move drugs to coastal dispatch points -- have long attracted illegal armed groups. For the last two decades, paramilitaries and their criminalized successors have occupied most of the central zone and urban centers, while guerrilla insurgents prowl the outer mountains, jungles and coca fields.

A lot of people left behind the cocaine and coca business to get involved in mining."

According to the UNODC, coca cultivation in Antioquia reached a peak of 9,926 hectares in 2007, with Bajo Cauca at the heart of the trade. In 2008 it began a decline, reaching a low of just 991 hectares in 2013.

As coca production fell, the region’s long established informal mining sector began to grow rapidly, fueled by a surge in international gold prices, which leapt from $731.75 per ounce in 2008 to a high of $1,889.7 in 2011.

The work was not as reliable as coca farming, but promised much higher returns for those willing to chance their hand. At the time, it also promised less risk of persecution, with security forces far more concerned with eradicating coca than preventing mining.

SEE ALSO: Coverage of Mining

Armed groups quickly realized the boom in informal mining represented a new opportunity to diversify their criminal revenue streams, all they had to do was intimidate miners into paying what is known in Colombia as “the vaccination” -- extortion fees.

However, their interest was not limited to extortion. The region's guerrillas and narco-paramilitaries also saw advantages to operating in an economy caught between the legal and the illegal, a murky world where irritations such as formal land titles, environmental licenses and proof of origin requirements were largely absent.

“Mining favors them in the sense that it is part legal and part illegal, and they shield themselves and camouflage themselves behind the gold panners and other miners,” said Lieutenant Colonel Luis Leon, who leads anti-mining operations in the Bajo Cauca Carabineros.

While the easy money of extortion remained their main interest, the armed groups also began to infiltrate and directly exploit the informal sector to extract even more profits and to launder their drug money. According to local police, they began to invest in mining machinery to rent out or to send to work productive spots. They also stepped up their involvement in running mines, not only charging the “vaccination” but also regulating the mines and using frontmen as administrators.

"This is the answer of these criminals, there is stricter control over illegal mining so they say they are going to return to illegal crops."

“They had the money to buy machines and to take over certain territories,” said Lieutenant Colonel Javier Guerrero, Commander of the Bajo Cauca police division. “By investing money in machines, workers and technology they began to turn their hand to gold mining.”

In Bajo Cauca, all three of Colombia’s main armed groups -- the insurgents of the Revolutionary Armed Forces of Colombia (FARC) and their smaller relations in the National Liberation Army (ELN), and the narco-paramilitaries known as the Urabeños -- now profit from the mining trade.

The Counter-Migration

The most recent coca stats confirm a trend that has long been popular knowledge in Antioquia; the migration from coca to gold is now in reverse. In 2014, the UNODC registered more than double the year’s previous total of hectares cultivated, rising to 2,293.

The move back to coca from mining is largely influenced by international gold prices, which have fallen 37 percent since their 2011 high. In an industry such as mining, where overheads can be high and results are never guaranteed, such price fluctuations can savage profit margins, driving miners to seek work elsewhere and forcing criminal groups to reassess their economic priorities.

SEE ALSO: Coverage of Gold

However, gold prices still stand at around $1,200 an ounce -- returning to levels last seen in mid-2010, when the criminal mining boom was already in an upward swing and coca cultivation in Antioquia nearly halfway through its seven year decline. This is not just a story of diminishing returns, say miners, security forces, and local authorities in Bajo Cauca, but also one of increased risks from the state's crack down on the informal mining sector.

{module Colombia Gold Gallery}

Photo Credit: James Bargent and Michael Norby

Over the last two years, Colombia has stepped up its efforts to tackle illegal mining exponentially, and the results are clear to see. According to Ministry of Defense figures obtained by El Tiempo, in 2014 security forces seized 739 kilos of suspect gold, compared to 11 kilos the year before and just three in 2011, when prices were at their peak. They also confiscated or destroyed 542 machines -- compared to 237 in 2013 -- arrested 1,757 people and closed down 655 mines.

“The issues of control of machines and the law that allows us to establish the criminal connections between mines and organized crime groups has hit these groups really hard,” said Lt Colonel Guerrero. “This has slowed their capacity to hide their money [in the mining sector].”

This has also been a decisive factor in the migration from gold to coca, he added.

“This is the answer of these criminals, there is stricter control over illegal mining so they say they are going to return to illegal crops,” he said.

In its wars against both coca and illegal mining, the authorities have relentlessly pursued the bottom rung of the supply chain, bringing short term success.

However, the move back to coca is not necessarily driven by orders from the leaders of armed groups concerned about cash flows.

The labor dynamic of both illegal mining and coca cultivation means those at the bottom of the chain, who pick the coca and sift the gold, are not members of armed groups but itinerant workers in the only economies in town. And many of those workers in the mining sector feel unfairly and indiscriminately targeted by the security forces -- making coca a more attractive option.

“They come and they blow up [the machines], close the mines, take the people away and prosecute them,” said one miner, who did not want to be named. “Imagine that, a person trying to earn their living and they become the same as a criminal.”

The police say these operations are exhaustively investigated and carefully targeted. However, littered around the site near where the miner works is striking evidence this is not always the case; the charred remains of hundreds of thousands of dollars worth of mining equipment sinking into the mud. The equipment belongs to a mine taking part in a pilot formalization program.

SEE ALSO: Colombia News and Profiles

The informal mining sector is also being squeezed at the point of sale. Over the last year, the government has introduced a spate of new rules and regulations designed to restrict the flow of illegal gold.

“A lot of gold buyers have closed down because they don't have these legal documents,” said one gold trader in the town of Caucasia, who did not want to be identified. “There are only a few that you see completely open and that are operating within the legal requirements the government is demanding.”

Although miners have found ways to skirt restrictions -- most commonly by selling to a middle man who has secured the right documents or by claiming the gold is a product of artesanal mining instead of mechanized -- this in itself is an additional cost and risk.

The illegal mining boom in Bajo Cauca is far from over; there remain up to 1,100 mining operations in the region directly employing an estimated 45,000 people, according to the miners association. But there is a growing sense that the bubble may have burst.

Also growing is the sense of failure emerging out of success in Colombia’s anti-illegal mining campaign -- the same feeling that has haunted Colombia’s efforts to eradicate coca for decades. In its wars against both coca and illegal mining, the authorities have relentlessly pursued the bottom rung of the supply chain, bringing short term success. But the underlying conditions of poverty, lack of opportunity and the control of armed groups in areas rich in coca and gold have remained unaddressed -- and as long as they do, illegal economies will continue to fill the gaps.

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