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.

The Minerals Marketing Corporation of Zimbabwe reported in May 2013 that up to $50 Million worth of gold was being illegally smuggled out of Zimbabwe each month.

The gold is believed to be smuggled to South Africa where it is refined on its way to Switzerland. The cost to refine the gold in South Africa is cheaper than in Zimbabwe.

Source:  Kudzai Chimhangwa, “Zimbabwe losing millions to gold smuggling: MMCZ,” Standard, May 26, 2013.

Law enforcement agencies in Vietnam investigated nearly 31,400 cases of black market smuggling in 2012. The value of the illicit goods was worth $21 Million (440 Billion Vietnamese Dong).

Between November 2012 to the end of February 2013, authorities arrested 11 pirates from Indonesia, 46 heroin traffickers, confiscated nearly 800 ecstasy pills, 24 kilograms of explosive materials, and nearly 5,800 tons of iron ore from smugglers.

Source:  “Anti-smuggling inspections to increase in border regions,” Vietnam Net Bridge, April 3, 2013.

A gold smuggler in India can make $33.50 (1,800 Rupee) for every 10 grams of gold that is smuggled into the country, according to jewelers in the country.

The government of India has raised the duty on gold, thus increasing the black market smuggling of gold to avoid duty payments.

(More income and profits from illegal jobs.)

Source:  Aparna Ramalingam, “Import duty hike to up gold smuggling,” Times of India, January 22, 2013.

Chinese Officials reported that over 21,000 tons of rare earth minerals was smuggled out of the country in 2011. The amount of minerals smuggled out of the country was 20 percent higher than the 18,600 tons that was legally exported out of China.

State media in China reported that of the 21,000 tons of smuggled minerals, Customs officials investigated eight cases involving 769 tons of rare earth minerals in 2011.

China holds up to 23 percent of the world’s rare earth deposits, but accounts for over 90 percent of the global supply. Rare earth minerals are used for many electronic devices, such as cell phones and batteries.

Source: Zhang Yan and Wang Qian, “Smuggling blights rare earths industry,” China Daily, December 10, 2012.

Officials in the Philippines estimate that up to 95 percent of the gold trade in the country is controlled by black market smugglers. The rise in the smuggling of gold is attributed to the 7 percent tax rate on gold sales levied by the Central Bank starting in 2011.

Source:  Daxim L. Lucas, “Smugglers now control 95% of Philippine gold trade,” Inquirer, November 19, 2012.

Mexican drug cartel Los Zetas is estimated to be earning between $22 Million to $25 Million by illegally mining coal near the US border.

The cartels either mine the coal themselves or purchase it from small operators and then sell the coal to the state-owned mine company and make a profit up to 30 times their investment.

The Zetas either produce or purchase up to 10,000 tons of coal a week.

(More illegal and criminal profits here.)

Source:  AFP, “Mexican druglords strike gold in coal,” Google News, November 18, 2012.

In August 2012, police in Italy reported that they has been an increase of 78 percent in the amount of gold, silver and cash that was prevented from being smuggled out of the country in the first six month of 2012.

The cash-for-gold industry in Italy is believed to be used by criminals as a method of money laundering, according to authorities. A network of gold smugglers broken up by police made $207 Million in profits smuggling over 33,000 pounds of gold and silver.

The number of cash-for-gold stores in Italy has quadrupled in a two-year span, and only a small minority of the 28,000 shops are officially registered with the government.

Source:  “Italy busts suspected gold-smuggling network,” BBC News, November 8, 2012.

Law enforcement officials and traders in the Philippines estimate that up to 90 percent of the gold mining done by small-scale miners in the country is sold on the black market and smuggled out of the country.

By law, gold that is mined in the Philippines must be sold to the Central Bank. However, in the second quarter of 2012, the amount of gold sold by small-scale miners dropped by 98 percent from the year before.

Gold Miners are selling their gold on the black market either directly to tourists, or to middlemen who smuggle the gold onto world markets such as Hong Kong.

Source:  Rosemarie Francisco, “Special Report: Philippines’ black market is China’s golden connection,” Reuters, August 22, 2012.

Illegal mining groups in Colombia are reported to be paying 1 percent of their total production to paramilitary groups such as the FARC. One miner who is involved in unlicensed mining stated that his group pays between $540 to 840 a month in extortion fees.

The Mine Minister of Colombia estimated that at least 40 percent of all mining activities in Colombia in 2011 was unlicensed. The drug trafficking and paramilitary organizations control at least 30 percent of the illegal mining activities.

Source:  “Mining in Colombia: Gold and guerillas,” Economist, August 17, 2012.

Up to 30 percent of Colombia’s total mining industry is estimated to be controlled by drug smuggling organizations.

It was previously reported that guerrilla group FARC generates up to $1 Million a month from illegal mining activities.

Source: Adam Siegel, “Latin America’s gold diggers,” Foreign Policy, The Call Blog, July 17, 2012.