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Most gold sold in Brazil in 2021 may be illegal

2 February 2023, 16:49
Most gold sold in Brazil in 2021 may be illegal

SAO PAULO. KAZINFORM - Over the last few weeks, the powerful images of malnourished Yanomami indigenous people and large areas of forest devastated by gold mining have raised the question—where is the gold from indigenous lands going?, Kazinform cites Agencia Brasil.

Instituto Escolhas, which combines studies on mining and land use, points out that, indications of illegality could be seen in 52.8 tons of the gold traded in Brazil in 2021—more than half (54%) of the national production.

Between 2015 and 2020, the total gold with signs of illegality sold in Brazil was 229 tons, an average of 38 tons a year.

The institute also reports that nearly two thirds of the gold (61%) is extracted in the Amazon. Experts suspect that 32 tons of the metal collected in the region in 2021 were irregular. In a report, the entity also lists the states where the gold came from in the year surveyed: Mato Grosso is the main place of origin (16 tons), followed by Pará (13.6 tons), Rondônia, Tocantins, Amapá, and Amazonas.

While it is possible to identify the origin of the gold, ascertaining the destination of the nuggets can be challenging, according to Escolhas Portfolio Manager Larissa Rodrigues, who coordinated the study. As a result, along with the diagnosis, the institute suggests a method for tracking.

The proposed measure involves multiple public agents, such as national mining agency ANM, Brazil’s top indigenous authority FUNAI, and the Central Bank, which provides data on the financial institutions authorized to deal in gold and inspects relevant operations.

The proposal favors blockchain technology, which could ensure traceability as each transaction is assigned a unique ID that cannot be altered.

Rodrigues describes the proposal as innovative for the gold sector in particular, adding however it is not a novelty all around, as other markets have implemented a similar model. Moreover, she noted, digitization has already been adopted by ANM.

«Such a digital system, to bring agencies together, already exists for wood and meat, to a certain extent. It’s not something the government would be doing for the first time. And why is this? To a large extent, it’s because of what we’re starting to see with gold now: pressure from importers and consumers. These products also faced a lot of legal issues in the past. So, due to market pressures, the government revamped the way it controls them,» she said.

Photo: Agencia Brasil

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