Ecuador Experiencing Government Pressure as Armed Gangs Strike Gold

After a 24-hour search party in the early days of July, police and military were met with gunfire as they descended on an informal mining camp near the town of Camilo Ponce Enríquez, in Ecuador’s southern Azuay province. While authorities rescued nearly 50 miners held hostage by the feared Lobos gang during the operation, the kidnappers managed to escape amid the fury of bullets.

Not all the kidnapped mine workers would make it out alive. Along with the survivors, authorities found dismembered human remains that the victims told Ecuadorian media belonged to members of their group, including the camp’s cook.

Informal mining and illegal gold exports have existed for decades in Ecuador. These operations traditionally involved either small-scale miners using artisanal methods without permission, illegal mining networks using mercury and heavy machinery, or companies extracting more gold than legally allowed.

But the violent incursion of armed gangs like the Lobos into this lucrative illicit industry has upended the nature of this business, turning illegal mining into the latest battleground in Ecuador’s protracted war on organized crime.

“It’s part of organized crime’s predatory logic … As criminal groups grow in capacity, they evolve to be more predatory and, obviously, to accumulate more capital,” Luis Córdova, Director of the Conflict and Violence Order Research Program at the Central University of Ecuador, told InSight Crime.

Gangs Get Brazen

More than any other gang, the Lobos have carved out a role for themselves in Ecuador’s illegal mining using extreme violence. They start as parasites, extorting legal mines and irregular miners before taking over the operations completely.

This evolution is part of a larger push to diversify their criminal portfolio after breaking ranks and emerging as a splinter faction of the Choneros gang. In recent years, Ecuador’s armed groups, whose power and sophistication had grown thanks to their involvement in drug trafficking, began a process of criminal diversification driven by a combination of increased anti-drug efforts and gang fragmentation.

SEE ALSO: Why Have Ecuador’s Drug Trafficking Gangs Turned to Extortion?

Illegal mining offered an alternative source of revenue with substantial profits. In 2022, illegal mining moved between $800 million and $1 billion, according to an estimate by Ecuador’s former energy minister. The scale of money involved helped the group launder money from other criminal economies, primarily drug trafficking.

There is also less risk of getting caught in illegal mining compared to the international drug trade, given the state’s severely limited institutional capacity.

“[The government] doesn’t really go after illegal gold extraction, not with the same resources they have for going after drugs,” Lorena Yael Piedra, a former intelligence official and president of the Ecuadorian Association of International Studies, told InSight Crime.

The Lobos modus operandi involves starting small, experts said. They begin by offering armed protection to groups of irregular miners or charging legal mining concessions a small extortion fee, or vacuna. Then their extortion becomes more aggressive. They force irregular miners to hand over a percentage of their daily haul or kidnap legal mine owners for large ransoms.

Ultimately, the goal of the Lobos is complete control. They take over existing legal mining concessions, their operations, their equipment, and run the owners out of town while pocketing the profits. When faced with resistance, the Lobos respond with the kind of brutality they showcased in Camilo Ponce Enríquez, the mining town where authorities rescued the kidnapped miners at the start of July.

“They were sending a message,” a mining expert and former government official who asked to remain anonymous for security reasons told InSight Crime. “They wanted to spread terror because it allows them to take over other mines.”

SEE ALSO: Stolen Amazon: The Roots of Environmental Crime in the Tri-Border Regions

In Camilo Ponce Enríquez alone, the Lobos directly operate 20 mines, extort another 30 private mining companies, and control 40 groups of illegal miners known as “sableros,” according to a joint investigation by Revista Vistazo, Código Vidrio, and Ojo Público.

Corruption has also facilitated the Lobos’ expansion into illegal mining. Corrupt state officials tip off irregular miners and criminal networks to rich gold deposits ready for exploitation or to legal concessions that have temporarily halted operations, alerting them to opportunities to exploit.

Once they do, corrupt police, military, and judicial officials protect the illegal mining activity, failing to act on community reports and tipping illegal miners off about planned security operations against them, according to various investigations by Ecuadorian and regional media and experts who spoke to InSight Crime.

“Why did organized crime groups get involved in illegal mining? Because corrupt officials invited them to,” the mining expert and former government official told InSight Crime.

Gold Fever Spreads

Since Ecuador’s criminal gangs first became visibly involved in illegal mining in recent years, their violent presence has spread from northern Ecuador south into the provinces of El Oro and Azuay and east into the Amazon.

Gang participation in illegal mining began making headlines after security forces raided and dismantled a massive illegal mining camp in 2019 in the parish of La Merced de Buenos Aires, in northern Imbabura province.

The camp, which had grown over a period of two years, consisted of irregular settlements collectively known as “Plastic City.” It held over 2,000 irregular miners from all over Ecuador and abroad, according to an official report obtained by InSight Crime. The demand for drugs from miners to help endure the grueling workload is what originally attracted criminals. They soon began extorting locals and miners, according to media reports at the time.

Ecuador’s government responded in July 2019 with a massive operation involving thousands of police and military officials that dismantled Plastic City and temporarily drove the miners out of the area.

While no specific Ecuadorian crime group was mentioned at the time, the mining expert and former government official told InSight Crime that the Lobos got their start in illegal mining in the aftermath of this operation.

In 2022, more than 1,000 illegal miners returned to La Merced de Buenos Aires, this time under the control of the Lobos. The group extorted each miner 10% of the value of their haul to operate, although it is unclear if this was paid in cash or gold. The government operation also displaced irregular miners to the south and east. Where they went, the Lobos followed.

Today, the southern provinces of Azuay and El Oro, which have long been strongholds for legal mining, have become Ecuador’s hotspots for illegal mining. Since 2022, the Lobos have unleashed a fury of violence on traditional mining communities in this area. Prior to the July kidnapping of the Camilo Ponce Enrique miners, for example, they were linked to multiple massacres and even murdered a supposedly corrupt local mayor who was involved in illegal mining.

Other miners displaced from Buenos Aires migrated east where they began exploiting parts of the Amazon in the provinces of Napo, Orellana, and Sucumbíos with devastating environmental consequences, ranging from soil erosion to river contamination.

Other predatory gangs soon joined them. This included members of the Lobos’ main rival, the Choneros, which have now also expanded their illegal mining operations into Ecuador’s prized Amazon region.

In May of this year, military forces arrested 22 alleged Choneros members in a raid on an illegal mining camp in the province of Orellana. Shortly after, an investigation from Ecuador’s Plan V news outlet found they had spread even further into Sucumbíos province.