The largest gold deposit in Ecuador is in the hands of organized crime.
At the end of 2017, while authorities in the northern province of Imbabura were working on the initial stages of building a road to the parish of Buenos Aires in San Miguel de Urcuquí canton, a backhoe uncovered a gold vein that experts say could be one of the continent’s largest.
Within 24 hours, nearly 700 people were already illegally mining the gold, Henry Troya, the then-deputy minister of mining in Ecuador, told InSight Crime. And that was just the beginning.
The news of such a large deposit attracted both Ecuadoreans and foreign nationals from Colombia, Peru, Brazil and Venezuela. The number of illegal miners swelled along with other illicit economies.
Troya estimates that there are now 3,000 people involved in mining in the area. Other sources whom InSight Crime consulted have put the tally at up to 10,000.
Criminal structures of all kinds have set up shop: among them extortionists, mafiosos and dissident members from the Revolutionary Armed Forces of Colombia (Fuerzas Armadas Revolucionarias de Colombia – FARC).
With high-powered weapons that easily surpass the capabilities of government authorities, these criminal groups control the mine, which draws up to $500,000 in illegal profits per month.
The majority of miners are artisanal and small-scale, working with hand-operated machinery. Most miners convert the rock into dust and then transport it approximately 800 kilometers (Video in Spanish) to Ecuador’s southern province of El Oro. There, the ore is processed and legalized through companies that have already been in operation at the border with Peru.
Recently, however, evidence of more sophisticated methods, including leaching pools and processing plants, have been discovered near the Buenos Aires mine in Ecuador.
Five to 10 trucks travel in caravans daily, receiving up to $150,000 per trip, which the illegal organizations use to pay authorities to allow their passage. They are escorted by armed vehicles and a van, where the money is stored. A military truck is known to have been among the vehicles used to transport the mined gold.
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Authorities arrived in Buenos Aires towards the end of 2017 but found that they were late to the game: the miners were heavily armed and had extensive control over the area. They calculated that it would take at least five days of large-scale armed interventions and three months of patrolling for the government to regain full control of the territory. This proved untenable for authorities, who ceased their operations.
A source consulted by InSight Crime said that certain political actors may be benefitting from the illegal mining. And they, of course, would not be interested in dismantling the criminal structures operating at the gold deposit.
Authorities, however, did carry out one of Ecuador’s largest operations against illegal mining on January 17. “Operation Mega-Avalanche 2: Bright Dawn” yielded six firearms, ammunition, explosives and 31 metric tons of mining material. Authorities raided 15 houses and arrested 24 people, including a Colombian national. But those arrested were released after only a few days and likely returned immediately to the mine.
InSight Crime Analysis
Although Ecuador has experienced gold rushes in the past, this level of open involvement by organized crime and armed gangs is unprecedented.
Buenos Aires is the third location to witness significant illegal mining in the country’s history. Two earlier instances occurred between 1970 and 1990, one of which took place in Nambija, Zamora province, and the other in a mining area in El Oro province. While mafia-like structures cropped up in both cases, the situation in Buenos Aires represents the first time that organized crime structures have been seen participating in illegal mining in Ecuador.
The convergence of both illegal artisanal miners and organized crime structures — many of whom seem more than willing to protect a potent source of income — has simply overwhelmed authorities. What efforts the Ecuadorean government has made through the police, politicians or the Mining Regulation and Monitoring Agency (Agencia de Regulación y Control Minero – ARCOM) are not enough to counteract the rapidly growing numbers of miners and weapons now circulating in the region.
A senior Ecuadorean police official, who asked to remain anonymous, told InSight Crime that the Oliver Sinisterra Front (Frente Oliver Sinisterra – FOS) of FARC dissidents is operating in Buenos Aires. He added that the FOS may be providing funds for the mines and running extortion operations. According to the official, there are also two groups led by men known as “Javier” and “Perico” controlling territory in the area. They have been extorting everyone from the people who control mine entrances to the owners of restaurants that the miners frequent.
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It may be that the high profits from such activities are behind many of the disputes among the criminal groups that have descended upon Buenos Aires and are jostling for territory. Possibly in relation to the groups’ conflicts, a Colombian miner was shot dead in December. Others have been killed as well.
While it seems clear that there is a strong relationship between illegal mining and organized crime groups in Buenos Aires, it is not the only place in Ecuador where illegal mining has drawn criminal actors. InSight Crime has found that organizations like the FOS could be exerting influence over mining activities in the border provinces of Esmeraldas and Carchi, specifically in the parishes of San Lorenzo and Tobar Donoso.
This is a sign that the dimensions of the power organized crime holds over mining in Ecuador could be much greater than previously thought.