Report Says Brazilian Gold Ending Up in Europe Could Be Illicit
A new report has found that more than 90% of gold imports by the European Union from Brazil could be illegal. Total gold imports for 2023 into the EU, valued at $93 million, added up to 1.5 metric tons.
The report, compiled by the Escolhas Institute, rated all areas where the metal is produced in mines referred to as garimpos as high risk. These mines aren’t subject to oversight, or the strict rules imposed on large-scale commercial mines. Areas with a lot of garimpos include the Amazonian states of Pará and Amazonas, with the report finding that high-risk trade also extended to São Paulo. Some of the gold traded at this commercial hub found its way into the global supply chain.
Larissa Rodrigues, a portfolio manager at the institution, explained that while not all the gold from these states was illicit, the metal was extracted from risky areas. It’s been proven that there are many illicit activities in these regions, mainly because of extraction from within conservation units and Indigenous lands.
Separate data has shown that gold extraction in the Amazon has doubled since 2018, with illicit gold mining within Indigenous territories also increasing sixfold, particularly inside the Yanomami, Munduruku and Kayapó territories.
Despite this, tracking gold’s origin from garimpos is difficult. This is because, once the metal is extracted, it is split between the owner and the mine workers before it is circulated in the local economy. This allows it to reach the Distribuidora de Títulos de Valores Mobiliários, which are financial companies in the country that are authorized to trade gold.
Data from 2023 shows that Germany is the top buyer of gold from Brazil, having imported 1,289 kg from high-risk areas. Coming in second is Italy, with 71% of 254 kg of gold imported from Brazil coming from these areas.
Illegal mining of gold contributes to deforestation while also contaminating rivers with mercury, which is used to separate the metal from the ore. This has seriously impacted the health of people living in the communities that rely on water sources near these illegal mining sites.
In 2023, the Brazilian government implemented various measures to enhance oversight of the metal’s trade. This included the mandated use of electronic invoices for gold trading. However, experts believe that most of the trade continued undercover.
One expert in the gold supply chain, Rodrigo Bellezoni, argues that increasing surveillance of the financial sector may help stamp this out. This is because most of the gold exported by the South American country goes into the financial reserves of global institutions in nations such as Italy and Switzerland.
The questions surrounding the gold sourced from Brazil may be the reason why cautious investors may lean toward exploration companies such as Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) that are conducting their operations in locations with more stringent regulations governing their activities.
NOTE TO INVESTORS: The latest news and updates relating to Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) are available in the company’s newsroom at http://ibn.fm/ELRRF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
A new report has found that more than 90% of gold imports by the European Union from Brazil could be illegal. Total gold imports for 2023 into the EU, valued at $93 million, added up to 1.5 metric tons.
The report, compiled by the Escolhas Institute, rated all areas where the metal is produced in mines referred to as garimpos as high risk. These mines aren’t subject to oversight, or the strict rules imposed on large-scale commercial mines. Areas with a lot of garimpos include the Amazonian states of Pará and Amazonas, with the report finding that high-risk trade also extended to São Paulo. Some of the gold traded at this commercial hub found its way into the global supply chain.
Larissa Rodrigues, a portfolio manager at the institution, explained that while not all the gold from these states was illicit, the metal was extracted from risky areas. It’s been proven that there are many illicit activities in these regions, mainly because of extraction from within conservation units and Indigenous lands.
Separate data has shown that gold extraction in the Amazon has doubled since 2018, with illicit gold mining within Indigenous territories also increasing sixfold, particularly inside the Yanomami, Munduruku and Kayapó territories.
Despite this, tracking gold’s origin from garimpos is difficult. This is because, once the metal is extracted, it is split between the owner and the mine workers before it is circulated in the local economy. This allows it to reach the Distribuidora de Títulos de Valores Mobiliários, which are financial companies in the country that are authorized to trade gold.
Data from 2023 shows that Germany is the top buyer of gold from Brazil, having imported 1,289 kg from high-risk areas. Coming in second is Italy, with 71% of 254 kg of gold imported from Brazil coming from these areas.
Illegal mining of gold contributes to deforestation while also contaminating rivers with mercury, which is used to separate the metal from the ore. This has seriously impacted the health of people living in the communities that rely on water sources near these illegal mining sites.
In 2023, the Brazilian government implemented various measures to enhance oversight of the metal’s trade. This included the mandated use of electronic invoices for gold trading. However, experts believe that most of the trade continued undercover.
One expert in the gold supply chain, Rodrigo Bellezoni, argues that increasing surveillance of the financial sector may help stamp this out. This is because most of the gold exported by the South American country goes into the financial reserves of global institutions in nations such as Italy and Switzerland.
The questions surrounding the gold sourced from Brazil may be the reason why cautious investors may lean toward exploration companies such as Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) that are conducting their operations in locations with more stringent regulations governing their activities.
NOTE TO INVESTORS: The latest news and updates relating to Eloro Resources Ltd. (TSX: ELO) (OTCQX: ELRRF) are available in the company’s newsroom at http://ibn.fm/ELRRF
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
