Metals and Minerals Smuggling

Information and statistics about metals and minerals smuggling. Data about gold smuggling, diamond smuggling and other precious metals are collected from intelligence reports, security agencies and other public information sources.

In 2011, around $3 Billion in gold that was illegally mined in Peru was exported out of the country.

International monitors estimate that over 20 percent of gold mining activities in the country is done illegally. In the region of Madre de Dios, up to 97 percent of the mining is done by unauthorized miners. Many of the illegal mines employ children, as tens of thousands of children are believed to be working in the mines.

Source:  Roberto A. Ferdman, “Peru exports more illegal gold than cocaine, and it’s the world’s biggest exporter of cocaine,” Quartz, September 30, 2013.

According to government statistics, over 43 million kilograms of jade was produced in Myanmar during the fiscal 2011 to 2012 year. Based on a conservative estimate by Reuters, the jade would have been worth $4.3 Billion. Less than 1 percent, or $34 Million worth of jade was officially reported to have been exported out of the country.

Financial and security analysts claim that nearly half of the jade ends up being smuggled into China. The jade is smuggled by truck through territory controlled by the Myanmar military or the Kachin Independence Army. Both groups collect a tax from the smuggled jade from black market sales that contributes to the conflict between the military and the KIA.

Source:  Andrew R.C. Marshall and Min Zayar Oo, “Special Report: Myanmar old guard clings to $8 billion jade empire,” Reuters, September 29, 2013.

In the first six months of 2013, police in Nepal seized 69 kilograms of gold. Most of the gold was smuggled into the country from Tibet, with the final destination of India.

In all of 2012, police seized 18 kilograms of gold in Nepal. Security agencies believe that only 10 percent of the gold smuggled into Nepal is confiscated.

The rise in gold smuggling is due to the high demand for gold in India and China, as well as an increase in duties for gold bullion.

Source:  AFP, “Nepal’s smugglers cash in on India’s love of gold,” Bangkok Post, September 4, 2013.

Between 2010 and August 2013, police in Colombia seized 29.7 tons of minerals from Tiger Hill, an illegal mine operated by the Revolutionary Armed Forces of Colombia (FARC).

The mineral that is mined out of Tiger Hill is tungsten, which is used by global manufactures to produce liquid-crystal-display screens, smartphones and high-end car parts.  85 percent of the world’s supply comes from China.

In a report by Bloomberg Markets, a tungsten broker stated that he paid $3.14 (6,000 Colombian Pesos) to miners for the mineral. The miners reportedly were authorized by FARC soldiers to sell the minerals.

Source:  Michael Smith, “How Colombian FARC Terrorists Mining Tungsten Are Linked to Your BMW Sedan,” Bloomberg Markets, August 7, 2013.

The Ministry of Petroleum and Mining reported that the country of South Sudan losses an estimated $200 Million per year from illicit gold smuggling.

Every day, an estimated 17 kilograms of gold is smuggled out of the country.

Source:  “South Sudan loses over $200m a year from gold smuggling,” Sudan Tribune, July 29, 2013.

According to security services, intelligence suggests that up to 40 kilograms of gold is smuggled into Nepal each day from China.

The gold eventually is smuggled into India.

Source:  “35 kg gold seized‚ four smugglers held,” Himalayan Times, July 10, 2013.

A gold smuggler who brings gold from Dubai to India is paid $16.82 for each 10 gram of gold that is smuggled. The smugglers are able to receive double the amount if they bring cash back to the gold agents in Dubai.

In 2012, an estimated 102 tonnes of gold was illegally smuggled in India to avoid duties. The amount of gold was equal to 10 percent of total gold imports.

Source:  “Yellow fever: Smuggling emerges as big business yet again,” First Post, July 25, 2013.

In the Madre de Dios region of Peru, 85 percent of fuel sales is used to operate machinery for illegal mining operations. Only 15 percent of all fuel sales is used for automobiles.

The illegal mining machinery requires 70 to 80 gallons of fuel to operate per day.

The area, located on the borders of Peru, Brazil, and Bolivia, has seen an increase illegal mining. Government officials estimate that up to 97 percent of the miners working in the region are unregistered.

Source:  Marguerite Cawley, “High Fuel Demand Highlights Illegal Mining in Peru Amazon,” Insight Crime, July 15, 2013.

Security officials in Colombia report that illegal mining of gold has become a more profitable activity for FARC, ELN and other organized crime gangs in the country.

According to a police official, a kilogram of cocaine sold in the Colombia jungle is sold for $2,570 (5 Million Colombian Pesos).  Based on the current world market price for gold, a kilogram of gold could be sold for up to 19 times the price of cocaine.

In addition to the higher prices for gold, the armed rebels are able to sell more gold in a shorter period of time. To harvest cocaine in the jungles, a farmer would need expertise in harvesting cocaine and the process generally takes up to 6 months. In comparison, an illegal gold mining operation can extract up to 2 kilograms of gold each week.

In 2012, police shut down 330 illegal gold mines across the country. In the first half of 2013, police shut down 336 illegal mines.

Source:  Andrew Willis, “Gold Beats Cocaine as Colombia Rebel Money Maker: Police,” Bloomberg Businessweek, June 21, 2013.

In the two years of 2011 to 2012, over 3.2 million tonnes of iron ore was illegally smuggled into China from Vietnam, according to the Vietnam Steel Association.

The difference in the reported export amount from Vietnam and the reported import amount from China was 1.55 million tonnes in 2011. The difference caused losses of $164 in Vietnam based upon the price of exports. The smuggled iron ore would have generated $84.7 Million in taxes and fees for the Vietnamese Government.

In 2012, the difference between exports and imports from the Vietnamese side was 1.7 million tonnes. The difference would have generated $84 Million in taxes and fees for the Vietnamese Government.

Source:  “Shocking illegal mineral exports to China,” Vietnam Net, June 8, 2013.