Colombia to buy gold from small miners to curb illegal trade
me-metals: Colombia’s government plans to start purchasing gold directly from small-scale producers in a bid to curb illegal activity and formalize an unregulated mining boom fueled by surging prices.
According to me-metals cited from mining.com, Government agencies including the tax and mining authorities will coordinate the effort starting in November, following an order from President Gustavo Petro, Mines and Energy Minister Edwin Palma wrote in an X post.
Illegal gold mining and trafficking in South America is surging along with bullion prices, which are up about 50% this year largely due to central bank purchases. In Colombia and Peru — top growers of the plants used to make cocaine — illegal gold is estimated to generate more money for organized crime than the drug trade itself. About 80% of all gold sold in Colombia comes from informal or illegal operations, Palma wrote. The impact on forests, rivers and local communities can be devastating.
Colombia’s central bank already buys physical gold, but its strict requirements exclude most informal miners. The new plan would allow other state entities to make purchases, potentially cutting small producers out of criminal supply chains.
Gold acquired under the program will be held by the SAE, which oversees property confiscated from illicit activities. It remains unclear what the SAE will do with the newly acquired gold.
Ecuador and Bolivia’s central banks already buy gold from local miners. In Peru, lawmakers have proposed similar legislation to empower either the central bank or the state-owned Banco de la Nación to make such purchases. Central bank chief Julio Velarde has opposed the idea, warning it could enable money laundering through illegal gold.
source: mining.com
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