Brazil central bank recruited to save Amazon from illegal mining

With large companies and non-governmental organizations pushing for a crackdown on unregulated gold flows, central bank chief Roberto Campos Neto pledged to look into ways to improve supervision of bank-authorized buyers, mining institute Ibram said in a statement after meeting with Campos Neto. Ibram and the federal police are also developing a traceability system using radioisotopes to establish a DNA for Brazilian gold.

The big mining companies want to differentiate themselves from illegal mining “dominated by criminal organizations,” Ibram President Raul Jungmann said by telephone. “Illegal mining impacts the sector’s reputation, which means restrictions in terms of socio-environmental, image and market approval.”

Sustainability organization Instituto Escolhas estimates Brazil commercialized 229 tons of gold with serious evidence of illegality between 2015 and 2020, around 50% of national production. According to a study, a handful of securities dealers accounted for one-third of all gold identified.

In Brazil, all gold from artisanal mining, known as garimpo, must be sold to firms accredited by the central bank. The lack of controls allows wildcat miners to make false claims of origin by registering a valid mining title number.

The local law exempts securities firms from accountability for irregularities, ensuring that gold purchases may be made based on the presumption of “good faith,” as long as illegal miners provide a self-issued certificate of origin. Mining companies and sustainability groups want that regulation to be banished.