Transnational Crime and the Developing World

A greater amount of research has been done on the value of illegal mining at a country and at a mineral
level. The surge of illegal mining that began in Latin America circa 2002 has received strong attention.
Illegal gold mining in nine Latin American countries is worth approximately US$7 billion each year (Table
Y). 340 Colombia and Peru have the largest amount of illegal gold mining in terms of value (US$2 billion
and US$2.6 billion, respectively), and Venezuela and Colombia suffer the highest rate of illegal gold
mining (86 to 91 percent and 80 percent of all gold mining, respectively). Mexico has the lowest rate of
illegal gold mining, at nine percent, yet that is still worth approximately US$500 million annually.
Table Y. Annual Value of Illegal Gold Mining in Latin America (US$ millions)
Country
Annual Value
% of Total Gold
Mining
Bolivia $100 31-45%
Brazil $400 10-14%
Colombia $2,000 80%
Ecuador $400 70-77%
Guyana $200 15-22%
Mexico $500 9%
Nicaragua $100 13%
Peru $2,600 22-28%
Venezuela $700 86-91%
Total $7,000 .
Source: Global Initiative against Transnational Organized Crime
The global value of illegal diamond mining has received more attention than other minerals largely due
to the work on conflict diamonds and the Kimberley Process. Conflict diamonds are generally thought to
represent less than one percent of global production, however illicitly mined diamonds are estimated to
account for 20 percent of worldwide production, worth approximately US$2.74 billion in 2015. 341
There are no official statistics regarding the percentage of illegal colored gemstones in global trade, so
until further research is produced, for the purposes of this discussion we will make the assumption that
the illegal production of colored gemstones occurs at the same rate as diamonds. Therefore, the global
value of illegal mining of natural gemstones other than diamonds was worth an estimated US$500 million
in 2013. 342
The high profits discussed above are not shared equally among all participants; it is the middlemen,
traders, and exporters who benefit the most. Illegal miners, at the bottom of the production chain,
are price takers and thus receive the smallest profit. Some indigenous communities in Brazil allow
illegal mining on their land in exchange for a percentage of sales, but middlemen frequently collude to
undervalue the diamonds by as much as 30 to 40 percent. 343 Illegal miners in Sierra Leone fare worse,
receiving roughly one-fifth the export value of diamonds they dig up. 344
340
Livia Wagner, Organized Crime and Illegally Mined Gold in Latin America (Geneva: Global Initiative against Transnational Organized Crime, 2016), 8,
http://globalinitiative.net/wp-content/uploads/2016/03/TGIATOC-OC-and-Illegally-Mined-Gold-in-Latin-America-Report-1718-digital.pdf.
341
Sigismond A. Wilson, “Sierra Leone’s Illicit Diamonds: The Challenges and the Way Forward,” GeoJournal 76, no. 3 (2011): 193, doi:http://dx.doi.
org.proxyau.wrlc.org/10.1007/s10708-009-9321-6; De Beers, “The Diamond Insight Report 2016” (De Beers, 2016), 26, https://cdgwebsites.com/
debeers/impact_2016/stable/downloads/De_Beers_Insight_Report_2016_web-ready.pdf.
342
U.S. Geological Survey, “2013 Minerals Yearbook: Gemstones” (Washington, DC: U.S. Department of the Interior, U.S. Geological Survey, 2016),
29.5, http://minerals.usgs.gov/minerals/pubs/commodity/gemstones/myb1-2013-gemst.pdf.
343
Fellipe Abreu and Luiz Felipe Silva, “How Illegal Diamond Mining Threatens Brazil’s Indigenous Communities,” InSight Crime, October 14, 2015,
http://www.insightcrime.org/news-analysis/how-illegal-diamond-mining-threatens-brazil-s-indigenous-communities.
344
“The Truth About Diamonds” (Global Witness, 2006), 3, https://www.globalwitness.org/sites/default/files/import/the_truth_about_diamonds.pdf.
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