- In 2023, three small gold mining companies in Ecuador exported $268 million in gold to the UAE and India, 20 times more than in 2022, an investigation by Mongabay and Codigo Vidrio has found.
- The amount of gold the companies claim to have processed is highly unrealistic, industry experts say, and checks on their concessions show no indication mining ever took place.
- More than 35% of Ecuador’s gold exports come from small-scale gold mining companies, but irregularities in their sourcing, permits, and operations, as well as an ongoing crisis in authorities’ monitoring capacity, suggest that most of these players are trading gold from illegal sources.
- Our investigation shows mining regulators approved export permits mostly without on-site verification; and even though the country’s mining registry was suspended in 2018, the agency in charge continued to approve hundreds of mining concessions.
Booming Small-Scale Gold Mining Business in Ecuador
About a quarter of Ecuador’s gold exports from small-scale mining in 2023 originated from just three companies: Rockgolden, Rocadorada, and Soul Metals. Their exports of $268 million in gold just to the United Arab Emirates and India were about 20 times more than the same trade the year before. A months-long investigation of their activities by Mongabay and Codigo Vidrio suggests that the exports were made via a web of falsified certificates and permits from nonexistent mines, abetted by lax governmental oversight.
Impact of Organized Crime on Small-Scale Gold Mining
The last few years have seen booming business for small-scale gold mining in Ecuador. For the first time since 2020, exports from small-scale gold producers reached $1.26 billion in 2023, surpassing the $1.17 billion worth of shipments of Canada’s Aurelian, the only large, formal gold mining company in Ecuador. However, organized crime tightening its grip on artisanal and illegal gold mining in Ecuador has led to a surge in violence and extortion, particularly affecting Indigenous communities and the fragile ecosystems of Ecuador’s Amazonian regions.
Insights from the Investigation
As journalists followed a paper trail of falsified documents, Ecuadorian police and prosecutors raided the country’s Mining Regulation and Control Agency (ARCOM) and the Ministry of Energy and Mines, uncovering irregularities in authorizing new mining permits and concessions for small-scale mining. The investigation found that these companies obtained gold from mostly illegal sources with the complicity of mining regulators, facilitating money laundering through illegally mined gold.
Challenges in the Regulatory Environment
Despite their astronomical revenues, Rockgolden, Rocadorada, and Soul Metals are not formal companies but operate under a special scheme in Ecuador, making them ideal for money laundering. The investigation reveals a lack of oversight and regulatory failures in monitoring export permits and production certificates, enabling fraudulent activities in the gold mining sector.
Rise of Illegal Mining and Criminality
The surge in gold exports is accompanied by a spike in crime and violence in illegal mining zones across Ecuador, indicating the dominance of illegal groups in the mining industry. Criminal organizations reinvesting drug trafficking profits into the gold trade fuel a violent struggle for territorial control, facilitating the laundering of illicit proceeds through the gold export business.
Institutional Failures and Call for Action
The investigation highlights institutional failures in monitoring and regulating the gold mining sector in Ecuador, with lax enforcement and corruption enabling illicit activities. Calls for stricter enforcement, audits, and prosecution of crimes in the industry are essential to combat illegal mining and money laundering in the country.
- In 2023, three small gold mining companies in Ecuador exported $268 million in gold to the UAE and India, 20 times more than in 2022, an investigation by Mongabay and Codigo Vidrio has found.
- The amount of gold the companies claim to have processed is highly unrealistic, industry experts say, and checks on their concessions show no indication mining ever took place.
- More than 35% of Ecuador’s gold exports come from small-scale gold mining companies, but irregularities in their sourcing, permits, and operations, as well as an ongoing crisis in authorities’ monitoring capacity, suggest that most of these players are trading gold from illegal sources.
- Our investigation shows mining regulators approved export permits mostly without on-site verification; and even though the country’s mining registry was suspended in 2018, the agency in charge continued to approve hundreds of mining concessions.
Booming Small-Scale Gold Mining Business in Ecuador
About a quarter of Ecuador’s gold exports from small-scale mining in 2023 originated from just three companies: Rockgolden, Rocadorada, and Soul Metals. Their exports of $268 million in gold just to the United Arab Emirates and India were about 20 times more than the same trade the year before. A months-long investigation of their activities by Mongabay and Codigo Vidrio suggests that the exports were made via a web of falsified certificates and permits from nonexistent mines, abetted by lax governmental oversight.
Impact of Organized Crime on Small-Scale Gold Mining
The last few years have seen booming business for small-scale gold mining in Ecuador. For the first time since 2020, exports from small-scale gold producers reached $1.26 billion in 2023, surpassing the $1.17 billion worth of shipments of Canada’s Aurelian, the only large, formal gold mining company in Ecuador. However, organized crime tightening its grip on artisanal and illegal gold mining in Ecuador has led to a surge in violence and extortion, particularly affecting Indigenous communities and the fragile ecosystems of Ecuador’s Amazonian regions.
Insights from the Investigation
As journalists followed a paper trail of falsified documents, Ecuadorian police and prosecutors raided the country’s Mining Regulation and Control Agency (ARCOM) and the Ministry of Energy and Mines, uncovering irregularities in authorizing new mining permits and concessions for small-scale mining. The investigation found that these companies obtained gold from mostly illegal sources with the complicity of mining regulators, facilitating money laundering through illegally mined gold.
Challenges in the Regulatory Environment
Despite their astronomical revenues, Rockgolden, Rocadorada, and Soul Metals are not formal companies but operate under a special scheme in Ecuador, making them ideal for money laundering. The investigation reveals a lack of oversight and regulatory failures in monitoring export permits and production certificates, enabling fraudulent activities in the gold mining sector.
Rise of Illegal Mining and Criminality
The surge in gold exports is accompanied by a spike in crime and violence in illegal mining zones across Ecuador, indicating the dominance of illegal groups in the mining industry. Criminal organizations reinvesting drug trafficking profits into the gold trade fuel a violent struggle for territorial control, facilitating the laundering of illicit proceeds through the gold export business.
Institutional Failures and Call for Action
The investigation highlights institutional failures in monitoring and regulating the gold mining sector in Ecuador, with lax enforcement and corruption enabling illicit activities. Calls for stricter enforcement, audits, and prosecution of crimes in the industry are essential to combat illegal mining and money laundering in the country.
