Colombia’s illegal gold mines prosper

By Andrew Willis and Michael Smith
Bloomberg

illgold160The Colombian government estimates the number of producers without licenses has risen from the last census in 2010-2011, when they accounted for 87 percent of all gold mines.

Colombia’s unlicensed gold miners are proving to be resilient to the steepest price drop in 16 years and government efforts to regulate their operations.

Investments by companies including AngloGold Ashanti Ltd. are being held back as ambiguous local regulations exacerbate the effects of the global gold slump. In contrast, informal operations in remote rivers and jungle areas are flourishing. The government acknowledges that the number of producers without licenses probably has risen from the last census in 2010-2011, when they accounted for 87 percent of all gold mines.

“The informal sector is booming as they have much lower overheads,” Trident Gold Corp. Chief Financial OfficerAndrew Smith said in an interview from Medellin. “Their great advantage is that they can operate on a much smaller scale. For international companies, just being listed is a burden.”

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