The Underground Battle for Colombia's Richest Gold Mine

Summary

The Underground Battle for Colombia's Richest Gold Mine

Episode Overview

In this gripping episode of The Journal, hosted by Jessica Mendoza, Juan Ferrero, and Ryan Knutson, listeners delve deep into the tumultuous struggle over Colombia's most lucrative gold mine located in Buritica, nestled within the Andes mountains. The episode explores the intricate dynamics between the multinational Chinese conglomerate Zijin Mining Group (Zijin), the powerful Gulf Clan drug cartel, and the Colombian government under President Gustavo Petro. This conflict not only highlights the fierce competition for natural resources but also underscores the broader socio-economic challenges facing Colombia.

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Setting the Stage: Buritica and Its Riches

Jessica Mendoza opens the story by painting a vivid picture of Buritica, a small town in the Andes maintained at the heart of Colombia's richest gold mine. The region's allure stems from its shimmering gold deposits, a legacy of colonial exploitation now dominated by modern corporate interests.

Juan Ferrero recounts his firsthand experience visiting the mine:

[00:15] Juan Ferrero: "You know, you're on a highway and then you turn off and you're very soon on a very narrow road that is a winding road that starts to drop...Beautiful scenery."

Key Points:

• Buritica’s geographical significance.
• Historical context of gold mining in the region.

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Zijin Mining Group: A Chinese Titan in Colombia

Since 2020, the Zijin Mining Group, a Chinese state-controlled behemoth, has operated the gold mine in Buritica. Juan Ferrero explains Zijin’s global footprint and the strategic importance of their operations for China’s resource acquisition, especially for electric vehicles and electronics.

[03:26] Juan Ferrero: "Zijin Mining Group is a Chinese state controlled company...one of the largest miners in the world."

Key Points:

• Zijin's global operations and significance.
• The $1 billion investment in the Colombian mine.
• The strategic importance of gold for China's economy.

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The Rising Conflict: Gulf Clan’s Assault

The episode highlights the escalating conflict between Zijin Mining and local rival miners backed by the Gulf Clan, Colombia’s most formidable drug trafficking organization. Jessica Mendoza explains how the Gulf Clan has capitalized on soaring gold prices, which have surged to around $2,600 per ounce, sparking a modern gold rush.

Key Insights:

• The Gulf Clan's transformation from traditional drug trafficking to lucrative gold mining alliances.
• Estimated theft of $200 million in gold by rival miners in 2023.
• Description of the physical confrontations within the mine.

Notable Quote:

[01:34] Juan Ferrero: "It's underground trench warfare...600, 700 yards underground."

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Inside the Mine: A Battleground Below

Juan Ferrero provides a harrowing account of the mine's internal strife:

[01:14] Juan Ferrero: "When we got deep into the mine...guards outfitted in bulletproof vests...rival group...invading tunnels to steal gold."

The mine has devolved into a war zone, with Zijin’s security forces struggling to maintain control against the well-armed Gulf Clan and allied miners. This underground battleground sees daily skirmishes, resulting in casualties and heightened tensions.

Key Points:

• The militarization of mine security.
• Daily clashes and their human cost.
• The strategic significance of the mine's infrastructure.

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Profiles of the Miners: Risk and Reward

The episode introduces listeners to individual miners like Eric Dubier, who engage in illicit tunneling for substantial financial gain:

[07:18] Juan Ferrero: "...extract $5,000 or more in gold a month, about as much as a business executive could make in Colombia."

Despite the lucrative returns, miners face constant danger from combat with Zijin's security forces. The Gulf Clan provides logistical support, including heavy equipment and provisions, ensuring that miners can sustain prolonged underground operations.

Key Insights:

• Economic motivations driving miners into illicit operations.
• The Gulf Clan’s role in facilitating these dangerous endeavors.
• The precarious balance between profitability and personal safety.

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Government Dynamics: Petro's Administration and Its Challenges

The shift in Colombia's political landscape under President Gustavo Petro has significantly influenced the conflict. Unlike previous administrations that took a hard stance against groups like the Gulf Clan, Petro's government opts for dialogue and negotiation.

Juan Ferrero reflects on the government's approach:

[10:17] Juan Ferrero: "The Colombian government is AWOL... they offered peace talks... many organizations are interested in continuing their activities."

This strategy has led to perceived inaction, frustrating foreign investors like Zijin, who accuse the government of negligence. In response, Zijin has filed a $430 million lawsuit against Colombia at the World International Center for the Settlement of Investment Disputes, alleging state failure to protect their assets.

Key Points:

• Petro’s preference for negotiation over confrontation.
• Zijin’s legal actions against the Colombian government.
• The government's broader socio-economic goals to transform rural economies.

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Local Mining Efforts and Pathways to Legitimization

Exploring alternative mining operations, the episode visits La Centena, an illicit mine that represents a potential path for legalization. Here, miners like Eric Dubier advocate for state recognition to formalize their operations, ensuring safety and legitimacy.

Key Insights:

• The stark difference between large-scale corporate mining and artisanal mining operations.
• The dangers inherent in small-scale illicit mining.
• Government proposals to legalize and support miners as a solution to broader economic issues.

Notable Quote:

[16:59] Juan Ferrero: "The state needs to support artisanal miners... they want to be legalized and have working cooperatives."

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Conclusion: A Complex Web of Interests and Challenges

The episode concludes by underscoring the intricate interplay between multinational corporations, powerful criminal organizations, and national governments. The battle over Buritica's gold mine is more than a fight for resources; it symbolizes the broader struggles within Colombia to balance economic development, security, and social welfare.

Key Takeaways:

• The multifaceted nature of resource conflicts in developing countries.
• The long-term implications of current policies on Colombia’s stability and economic future.
• The urgent need for comprehensive solutions that address both economic opportunities and security concerns.

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The Journal masterfully captures the essence of this conflict, providing listeners with a nuanced understanding of the high-stakes battle for Colombia's richest gold mine. Through firsthand accounts and expert analysis, the episode sheds light on the underlying forces driving this underground war and its far-reaching consequences.

Transcript

[Jessica Mendoza]

Last summer, our colleague Juan Ferrero left his home base in Bogota, Colombia, to visit a small town in the Andes mountains.

[Juan Ferrero]

You know, you're on a highway and then you turn off and you're very soon on a very narrow road that is a winding road that starts to drop, you know, toward a valley. Beautiful scenery. You know, you see this tapestry of different shades of green where farmers are producing their crops. And down below, several miles down, is the town of Buritica.

[Jessica Mendoza]

Buritica sits nestled within the mountains. And in those mountains is a resource that people have been fighting over since the arrival of Spanish conquistadors. Shining, glimmering, valuable gold. Nowadays, it's not the Spanish who are looking for gold. Instead, it's a multinational giant out of China, the Xijin Mining Group. Zijin's mine in Buritika is the richest gold mine in Colombia. When Juan visited, he found a mine under siege.

[Juan Ferrero]

When we got deep into the mine, you know, there's a point where Xijin is just not in control anymore. And so what you see are sandbags everywhere. And behind those sandbags are guards and they're outfitted, you know, in bulletproof vests and so forth, and they're toting shotguns.

[Jessica Mendoza]

On the other side of the sandbags is a rival group of miners who are invading Xijin's tunnels to steal the company's gold. In 2023, the miners stole tons of it, worth about $200 million according to the company's estimates. And they're stealing it with the help of a powerful militia group, meaning the conflict often turns violent.

[Juan Ferrero]

The way they put it is this is underground trench warfare. I mean, it is 600, 700 yards underground. I don't know of another place in where you have two sides that are going at it that far underground. And of course, they're fighting over gold.

[Jessica Mendoza]

Welcome to the Journal, our show about money, business and power. I'm Jessica Mendoza. It's Thursday, January 2nd. Coming up on the show, the battle for gold raging within Columbia's mountains. Foreign.

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[Jessica Mendoza]

The mine at the center of this conflict has been operated by the Zhejian mining group since 2020.

[Juan Ferrero]

Zixin Mining Group is a Chinese state controlled company, and it operates all over the world. I mean, it has operations in the con. It has operations in Asia, of course, in China, and in many other countries.

[Jessica Mendoza]

How important is Zixin Mining Group to China?

[Juan Ferrero]

Well, Zijin Mining Group is one of many mining companies in China, but it's an important one because it is one of the largest miners in the world. And of course, China is looking for commodities of all kinds all over the world for electric vehicles, for all kinds of electronics and everything. So this is an important operation for them. They can't afford to just lose it.

[Jessica Mendoza]

The company bought the mine for about $1 billion. But since taking over the mine, Zijin says they've lost a significant portion of it. Two of the mine's three sections have been taken over by rival miners looking to steal the company's gold. And leading the invasion of Xijin's mine is Colombia's most powerful drug trafficking group.

[Juan Ferrero]

It's called the Gulf clan. The Gulf clan Clan del Golfo.

[Jessica Mendoza]

The powerful Gulf clan drug cartel.

[Juan Ferrero]

El clan del Golfo es un grupo delinquencial quesia fortalecido un los ultimos anos por suaciones violentas. They control many of the routes used to smuggle trucks to the US and beyond, and are also engaged in extortion and illegal mining. Tamiense los bincula con actividades como amineria y legal el trafico de migrantes bien mitro trafico. And the Gulf clan is, you know, people call them gangs. They're not really gangs in Colombia. They're far bigger than that. This is an organization that could have as many as 7,000 members that is very much running roughshod over northwestern Colombia. And they're involved as a lot of, you know, organized crime outfits in Colombia and in other developing countries. They're involved in myriad crimes. Their main thing is drug trafficking. They're also involved in extortions, meaning, you know, extorting small businesses and small towns and migrant smuggling. There's a lot of migrants who are looking to come through Colombia en route to the United States. And the Gulf clan will help move them for a price. But they're also involved in gold mining, which in many ways is turning into a more lucrative area or sector for them.

[Jessica Mendoza]

In recent years, the price of gold has reached record levels to around $2,600 per ounce, giving rise to a gold rush in Colombia. The gulf clan has sought to capitalize on that gold rush by partnering with hundreds of miners in Boritica. Together, the miners and the gulf clan have been breaking into xijin's mines to take the company's gold.

[Juan Ferrero]

It's not simply that the miners are doing their thing and paying a kickback to the gulf clan. It's that the gulf clan is actually heavily involved in organizing, in providing logistics, equipment and muscle to the miners. And what does the gulf plan ensure? They ensure that, you know, these miners have heavy equipment to be able to cut through rock and get underground, that they have provisions to be underground for two, three, four, five, six weeks or longer. These, these miners will go in and they won't come out for weeks. So they need to have, you know, food, they need to have water, they need to have a place to sleep, et cetera. The gulf clan also provides them with prostitutes and with drugs and so forth.

[Jessica Mendoza]

How do the miners actually break into the mine?

[Juan Ferrero]

That is one of the most interesting aspects of all of this. As I mentioned, there's a mountain, and on that mountain there are little houses. And so the miners and other people allied with them have taken over some of these homes. And from these homes, they just basically start drilling down. So they might go into the bathroom and just drill down.

[Jessica Mendoza]

Wow.

[Juan Ferrero]

And they're drilling down far. I mean, we're talking 500, 600, 700 yards deep into the mountain to finally be able to connect with zejin's big tunnels.

[Jessica Mendoza]

On his trip to boritica, Juan met Eric dubier, a miner who's worked the illicit tunnels that burrow into zijin's mine. And he told Juan he does it to provide a better future for his wife and four year old son. Eric says the gulf clan provides miners like him with basic comforts, like a kitchen. And the pay is good. In a month, miners like Eric can extract $5,000 or more in gold, about as much as a business executive could make in Colombia. But it's dangerous work, and Eric says that the biggest risk is running into zijin's security forces. Combat between them and the gulf clan happens pretty much every day. What happens when xi jin's security forces meet, you know, gulf clan minors? Like, what, what does that look like?

[Juan Ferrero]

Well, that is very dramatic because what ends up happening is when they break through, they sometimes end up throwing explosives and shooting in the direction of the zijin personnel. And that's when the zijin personnel, you know, they'll shoot back. But generally their Strategy is to back off. You know, the Zejin people know that they're coming, and eventually they'll spot, like, you know, light from several hundred yards away or 100 yards away. And they know that, boom, these guys have broken through. And now we have to seed here in 2023.

[Jessica Mendoza]

Two guards were killed and several others were wounded as a result of the fighting. A security official with the company said that it's losing its war against the Gulf clan. Xijin can't push them out of their tunnels without help. How has this been allowed to happen? Where is the Colombian government in all of this? This is happening in Colombia.

[Juan Ferrero]

Yeah. Well, the Zijin executives, who were exasperated by the situation, basically say that the Colombian government is awol. And when I did talk to the Colombian government, you know, the vice minister of defense, she and I had a really long talk about this, and she acknowledged that this is a terrible situation. But she also said that the demands that the company makes are not realistic.

[Jessica Mendoza]

The conflict between Xi Jin and the Colombian government is next.

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[Jessica Mendoza]

Required, equivalent to $15 per month. New customers on first 3 month plan only. Taxes and fees, extra speed slower above 40 gigabytes on unlimited. See mintmobile.com for details. Zejian executives say their underground war against the Gulf clan worsened after 2022, when a new party took control of Colombia's government. Past governments, by and large, welcomed foreign mining companies like Xijin, and they took a harsh stance against groups like the Gulf clan. But the new administration, led by President Gustavo Petro, has taken a different approach since coming to power. The Petro administration's method of dealing with criminal and drug trafficking groups has been to avoid direct conflict.

[Juan Ferrero]

They prefer to try to engage armed groups in conversations, in dialogue. They have offered the possibility of peace talks to some of these organizations. So far, that plan has gone badly because many of these organizations are very much interested in continuing to mine gold, to traffic drugs, to move migrants, which bring them a lot of money. And they have also expanded across Colombia in the last two years. According to the state's own figures, Zhen.

[Jessica Mendoza]

Has urged the Colombian government to take action against the Gulf clan by cutting off supplies to Illegal miners and closing off routes used by criminals stealing Xijin gold. But Xijin's CEO told Juan that he hasn't seen much will from the Petro administration to help the company. And so last July, Zhen sued the Colombian government.

[Juan Ferrero]

The situation is so serious for Xijin Mining that they have filed a $430 million lawsuit at the World International center for the Settlement of Investment Disputes. And they allege that Colombian authorities simply aren't doing their job. This has not caused any joy in the Colombian government. In my talks with the Colombian officials, they were actually, you know, they did express, you know, their irritation that the Chinese had filed this lawsuit against them.

[Jessica Mendoza]

What does the company hope to get out of this lawsuit?

[Juan Ferrero]

I think that the company wants the Colombian government to act, and they are hoping that the Colombian government does change its policies and does take this armed group on.

[Jessica Mendoza]

Colombia's Defense Ministry says that Xijin bought the mine knowing that illegal extraction of gold was taking place. The ministry also said Colombia doesn't have the capacity to flush out the clandestine miners and that the government wants to avoid violent confrontations that might endanger civilians. Other officials have suggested that Xijin give up some of its mine holdings to trespassers in a bid for peace. Colombia's government says that the fight for Xijin's mines is a symptom of a bigger problem, that many Colombians have to resort to illegal work to get by. To address that issue, the government says it needs to transform the economy of places like Boritica so that citizens have a choice of better jobs. One way to do that is to open up a path for illegal miners to legalize their operations. On his trip to Buritika, Juan visited one mine that could potentially go down this path. La Centena. A handful of illegal miners run a small operation there. This mine is a lot different than Xijin's. It's full of narrow corridors that burrow about 200 yards into the mountainside. The ground is flooded with muddy water, but at the end of the tunnel above their heads, the ceiling glimmers. One miner, Andres Rave, points to a vein of gold, running his fingers over the minerals. They get to work extracting the gold. Among the people working this mine is Eric Dubier, the miner you heard from earlier who's worked in the illicit tunnels that break into Zejian's mine. Eric says working these smaller mines is also dangerous. The miners try to make them as safe as they can, using wood beams to support the ceiling above them. But here, if an accident happens, they don't get any protection or insurance, they're on their own. Eric and the other miners want the government to recognize and legitimize their mining so they're no longer operating legally. President Petro has signaled that he wants to give out more licenses and help to miners, but has not made any big changes. La Santana has also caught up in the Xijin conflict. The Chinese company says they have the rights to this land as well, but miners like Eric dispute that claim. So far, the Petro government has continued to stay out of the fight.

[Juan Ferrero]

Petro has criticized past governments for handing over concessions to big mining outfits, including Zejin. And he has talked about how the state needs to support artisanal miners, meaning small scale miners. But if you talk to a lot of these small scale miners, they feel that they haven't gotten much help because what they want is to be legalized and, and to have working cooperatives and, you know, for their activities, to receive state assistance and that kind of thing. Not, you know, we're not seeing that happening. So right now, the state really has a lot of critics from many different directions. What they do say is that their policy is basically to try to provide a new kind of economy for the people of Colombia's rural areas, and that if they're able to build a new economy for people, then folks won't have to depend on illegal mining or other illegal sectors like drug trafficking to make a living. But of course, this is something that would take, you know, decades. But in terms of, like, actual action, we're not seeing much.

[Jessica Mendoza]

That's all for today. Thursday, January 2nd. The Journal is a co production of Spotify and the Wall Street Journal. If you like our show, follow us wherever you get your podcasts. We're out every weekday afternoon. Thanks for listening and happy New Year. We'll see you tomor.