The Colombian artisanal mining sector: Formalization is a heavy burden

Abstract

The Ministry of Mines and Energy (MME) in Colombia has the potential to be the most pro-active government ministry in the world to deal with the problem of formalization of an estimated 300,000 Colombian artisanal miners, extracting gold, diamonds, emeralds, coal, construction minerals, etc. However, currently, the MME has reached the basic stage of formalization of only about 7% of the total registered mining units in the country. In conjunction with the Ministry of the Environment and Sustainable Development, local authorities and even the Army (for the use of explosives), the inherent regulations required for formalization are very difficult to manage for the artisanal miners. As a result, gold production in the country reached 61.8 tonnes in 2016, in which the formal sector only represented 13% of this total, while the informal miners produced 87% of the gold. Furthermore, apart from the Colombian Government missing out on taxes that could be garnered from the informally produced gold, it is clear that there are significant quantities of gold being smuggled out of the country illegally. In 2017, although gold production fell by 35% to a total of 40.1 tonnes, gold exports increased 17% from 48 tonnes in 2016 to 58 tonnes in 2017, which is likely due to illegal mining, mainly from illicit criminal organizations laundering money via gold exports. In order to increase the successful formalization of legitimate artisanal gold miners, major reforms of the legislation are urgently needed, including facilitation of the hurdles required to undergo the process, as well as increased presence on the ground to offer education, training and capital investment for cleaner processing techniques.