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article imageEcuador cracks down on illegal mining to transform economy

By Santiago PIEDRA SILVA (AFP)     Aug 1, 2019 in World

In a desolate area of Ecuador's northern Andes, dozens of electricity generators are cordoned off by yellow crime scene tape as armed security forces keep watch.

Nearby, sacks of earth and rock have been piled up next to a sign reading: "confiscated gold material."

A month ago, 2,400 police and military personnel descended on La Merced de Buenos Aires in the mountains just north of the capital Quito to put a stop to indiscriminate illegal gold mining in the area.

Up to 15,000 miners and their families once flocked to the remote area, where they could earn the equivalent of $150 each day breaking up rocks that can contain up to 40 grams of gold per-ton.

All that remains of the black market industry are the terracotta-colored scars the miners have cut into the green landscape and the dozens of shelters they jury-rigged from tarpaulins and sticks.

The government raid chased away the miners and the criminal groups that accompanied them, while also removing an obstacle to Ecuador's plans to wean its economy off its main export oil and encourage the development of mining, as fellow Andean nations Peru and Chile have done.

"In the next five to seven years, mining will be the economic pillar," Deputy Mines Minister Fernando Benalcazar told AFP.

- 'Gold is like a magnet' -

Buenos Aires was once a mountain village home to 1,800 peasants, but in late 2017 it was transformed by a huge influx of prospective gold miners.

Ecuador's illegal miners have harmed the environment by cutting into the hillsides
Ecuador's illegal miners have harmed the environment by cutting into the hillsides

"As the number of people increased, the gold came out. People came from Venezuela, Peru, Dominicans, from all over Ecuador," 50-year-old German Fraga told AFP.

"There wasn't enough food in the stores. So they began to stock up, to bring in trucks, as much as they could."

Prices soared amid the hoarding, and at one point there was so much money in circulation that a 15 kilogram (33 pound) household gas canister, whose official price was $1.60, was changing hands for $40 in the mines.

Armed group and prostitution followed, authorities said, until the security crackdown cleared them all out.

But one miner, a man with rough hands and fingernails busted by wayward hammer blows, says they will be back.

"They sent us away, but gold is like a magnet, it attracts good and bad," said the man, who spoke on condition of anonymity.

If the miners return, they may find themselves having to deal with a new landlord: Australian company Hanrine, whose concession extends into the area where the miners of Buenos Aires worked.

Security forces confiscated generators during the raid on the illegal miners
Security forces confiscated generators during the raid on the illegal miners

Investment from foreign mining firms is crucial to Ecuador's plan to end its reliance on oil revenue and shift to exploiting its massive mineral reserves, albeit with government regulation.

"It's very easy to launder this money, to handle it. What we see in Buenos Aires clearly demonstrates this," Benalcazar said of the illegal mining industry, adding that barely 7.5 percent of the country's territory has been designated for mineral prospection.

With 11.1 million ounces of gold, 51.6 million ounces of silver and 9.8 million tons of copper thought to be in its soils, Ecuador may become one of the main mining sites in the world.

The country is developing five large-scale metal mining projects, and will receive $2.25 billion of investment up to 2021 when it hopes to have increased mining's share of gross domestic product to four percent, according to the Ministry of Mines and Non-Renewable Natural Resources.

That would be an increase from just 1.61 percent in 2018.

- Illegal or traditional? -

Several groups, including organizations of local and indigenous peoples, are against the government's plans, and not just because mining pollutes water sources and ecosystems.

"What we don't like is that (the government) wants to bring in transnationals. That's not good because here, in our country, there are poor people," said a local senior citizen, Jose Fraga.

Ecuador wants to increase mining revenue to wean its economy off its main export oil
Ecuador wants to increase mining revenue to wean its economy off its main export oil

Instead, he's in favor of "traditional mining, even though they say it's illegal."

Meanwhile, the government is pushing ahead with its plans.

The open air Mirador mine, operated by Chinese group CRCC-Tonguan and with reserves of 3.2 million tons of copper, began production on July 18.

And just north of the illegal mines of Buenos Aires lies Cascabel, which is being exploited by Australia's SoGold and for which the government has high hopes.

The mine "has huge preliminary reserves of silver that would place it between the first and third mines in the world for production," enthused Benalcazar.

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