Gold rush another blight to ailing Amazon jungle

DELTA 1, Peru — A gold rush that accelerated with the onset of the 2008 global recession is compounding the woes of the Amazon basin, laying waste to Peruvian rain forest and spilling tons of toxic mercury into the air and water.

With gold's price soaring globally as the metal became a hedge against financial uncertainty, the army of small-scale miners in the state of Madre de Dios has swelled to some 40,000. The result: Diesel exhaust sullies the air, trees are toppled to get at the sandy, gold-flecked earth and the scars inflicted on the land are visible on satellite photos.

The work is dangerous and produces a fifth of Peru's overall annual yield of roughly 175 metric tons of gold that make this country the world's No. 5 producer. The mining also is almost entirely illegal.

"Extracting an ounce of gold costs from $400 to $500 and the profit is $1,000 per ounce," notes Peru's environment minister, Antonio Brack. In just a decade, gold has more than tripled in value.

The situation in the southeastern state of Madre de Dios, which borders Brazil and Bolivia, is mirrored in dozens of the countries where gold is similarly mined, and where the desperately poor often end up working for the most unsavory of opportunists.

Government controls are mostly futile.

Neighboring Colombia and Ecuador have mounted crackdowns in the past year — Ecuador's military last month dynamited 67 pieces of heavy equipment — but when authorities depart, the diggers troop back and work resumes. In Madre de Dios, the informal production is unrecorded, untaxed and carried out on public lands where claims are awarded by regional officials, many of them grown rich in the process.

As the industry has grown, heavy machinery bearing Caterpillar, Volvo and other international trademarks has moved into a state the size of Maine or Portugal, whose remotest reaches are believed inhabited by uncontacted Indian tribes.

In February, the Peruvian navy dynamited 13 dredges which, working in violation of a government ban, were choking the Madre de Dios river with silt, killing plants and destroying habitats. Protesting laborers blockaded Madre de Dios' only highway, and at least three people were shot and killed by police sent from the national capital, Lima.

"One of the big hydraulic dredges we destroyed could easily harvest a kilogram (worth about $45,000) of gold a day," said Brack.