Sao Paulo, Jan. 13 (BUS): The medals have been described as the most sustainable ever.
Keeping up with the festive spirit of the first Olympic Games in South America, officials from Brazil, the host country for the 2016 games in Rio de Janeiro, boasted that the medals hanging around the athletes’ necks on the winners’ podium were also a triumph for the environment: gold was produced mercury-free and silver was recycled from Discarded x-ray plates and mirrors.
Five years on, the gold medalist’s refining company, Marsam, is processing gold that was eventually bought by hundreds of well-known publicly traded US companies – among them Microsoft, Tesla and Amazon – and legally required to responsibly obtain the minerals in a plagued industry. It has long been associated with environmental and labor concerns.
But a comprehensive review of public records by the Associated Press (AP) found that the Sao Paulo-based company processes gold for a broker that Brazilian prosecutors accuse of buying illegally extracted gold from indigenous lands and other deep regions. In the Amazon rainforest.
The Associated Press reported previously in this series that the volume of gold mining on Aboriginal lands has exploded in recent years and involves carving illegal landing strips in the woods for unauthorized planes to transport heavy equipment and fuel and backhoes to rip through the ground for the precious metal. Weak government oversight made possible by President Jair Bolsonaro, the son of the prospector himself, has exacerbated the problem of illegal gold mining in protected areas. Critics are also criticizing an international certification program used by manufacturers to show they do not use minerals that come from conflict areas, saying it is an exercise in greenwashing.
“There is no real potential for traceability as long as the industry relies on self-regulation,” said Mark Beth, professor of criminal law at the University of Basel in Switzerland and author of the 2018 book Gold Laundering.
“People know where the gold is coming from, but they don’t even bother going back into the supply chain because they know they’re going to be dealing with all kinds of criminal activity.”
Much like the brown and black tributaries that feed the Amazon, gold mined illegally in the rainforests of the supply chain mixes with clean gold to become almost indistinguishable.
The coins are taken out of the forest in the dusty pockets of prospectors to the nearest town where they are sold to financial brokers. All that is required to convert raw ore into a tradable asset regulated by the central bank is a handwritten document that attests to a specific point in the rainforest where the gold was mined. The fewer questions, the better.
In many Amazon outposts of these brokers – the front door to the financial system – gold becomes the property of Derso Frederico Sobrinho.
For four decades, Dirceu has embodied the up-by-bootstraps legend of Brazilian prospector Garimpeiro, or prospector. The son of a vegetable grocer who sold his produce near a notorious mine full of prospectors – among them Bolsonaro’s father – looked like swarming ants, and he caught the gold bug in the mid-1980s and began sending planes loaded with ore from a remote Amazon town. He got his first concession in 1990, one year after the nation implemented a permit system to regulate exploration.
Today, from soaring high on São Paulo’s busiest street, it has become a major player in Brazil’s gold rush, with 173 exploration areas either registered in its name or with pending orders, according to the Brazil mining regulator’s registry. In the same building is the headquarters of the Anoro National Gold Association, which he leads. Derceau was, until last year, also a partner in Mersam.
But even with the gold jewelry dangling from his fingers and wrist, Derceau still takes pride in the roots of both Garembero.
“Don’t motivate a person to go into the woods if he doesn’t chase a dream,” he said in a rare interview from his corner office studded with a giant jade eagle. “He who deals in gold has this: they dream, believe, and love it.”
He adds: “We have a saying among the garimberos: ‘I am a pawn, but I am a pawn with gold’.”
At the center of the Derso empire, F.D’Gold is Brazil’s largest buyer of gold from mining sites, with purchases totaling more than 2 billion reais ($361 million) last year from 252 wildcat sites, according to data from the mining regulator. Only two international companies operating industrial-sized gold mines paid more royalties in 2021, a sign of how artisanal mining once became big business in Brazil — at least for some.
FKN