Global Crisis Sparks Gold Rush In Brazil's Amazon

Raymond Colitt, PlanetArk 16 Apr 09;

BOM JESUS - Pedro Ferreira spends his days and nights in a cramped, steamy tunnel under the damp earth of the Amazon rain forest, chipping away at a wall of rock glittering with traces of gold.

He is one of nearly a thousand wildcat miners who made a five-day boat journey to this remote jungle site to dig for gold -- more highly prized now than ever as international investors flocking to the metal as a safe haven in the global financial crisis.

"With rumours of a new discovery and the high price of gold, I came straight here," said Ferreira, 34, wearing a soiled tracksuit and resting on a pickaxe after emerging from a hole in the ground at the Bom Jesus mine on the upper Tapajos River.

The global crisis has revived this and other wildcat mines in Brazil where hundreds of thousands of desperate workers toil in precarious conditions, damaging health and environment.

In the Tapajos valley the number of miners has jumped about 40 percent to 30,000 since October, coinciding with a sharp rally in the price of gold to nearly $1,000 an ounce earlier this year before retreating to about $890, triggering a local economic boom as they spend their bounty.

"It's fuelling our commerce. I don't know what we'd do without mining," said Seme Sefrian Junior, an official in Itaituba, a town 280 miles (450 km) east of Manaus.

The falling prices of other commodities that Brazil relies on helped push many to Bom Jesus, which means Good Jesus. Antonio Souza Oliveira, dressed in shorts and sandals in the tropical heat, left his 70 head of cattle to dig for gold.

"Raising cattle no longer pays -- this is what puts my kids through school," said a smiling 47-year-old Oliveira, pointing at a glittering piece of rock.

The price of beef, of which Brazil is the world's biggest exporter, has fallen 18 percent from nearly a year ago.

AN OPEN WOUND

Critics say wildcat mining is more of a curse than a blessing in a region where lawlessness thrives.

Working conditions are subhuman. Local strongmen take the bulk of the profit and enforce their rules with a gun. Disease, prostitution, and environmental destruction abound.

With its foray onto global markets in recent years, Brazil has come under increasing international scrutiny for the social and environmental impact of its main exports. Wildcat mining is the kind of negative publicity authorities could do without.

"It is one of the wounds of the Amazon," said Roberto Mangabeira Unger, minister for strategic affairs, who is in charge of a sustainable development plan for the region.

"It's like serfdom but we won't try to hide it."

From the air, Bom Jesus is a mosaic of the forest's green canopy dotted with blue, yellow and black plastic sheeting covering make-shift dormitories strung with hammocks.

A simple grocery store on one side of the bumpy landing strip that divides the camp offers eggs, oranges and smoked sausage. There are five bars and two "cabarets," a euphemism for a brothel. Besides a handful of prostitutes there are few women in the camp, mostly cooks.

With luck, miners can make around 5,000 reais (US$2,272) a month, more than 10 times more than the 465 reais a mason earns. A local middleman buys the gold they mine and traders in Sao Paulo funnel it to local and world markets.

But many miners gamble and drink away their small fortunes.

"We work during the day to spend our money at night," said Guto Alves da Souza, whose laugh reveals a nearly toothless mouth and emits a stench of smoke and cachaca, a local firewater distilled from sugarcane. After 30 years digging for gold, the 46-year-old has no savings.

As many as a third of the miners have malaria, a deadly disease if untreated.

Junior Alves de Goes, aged 43, squirms and moans in his hammock from a high malarial fever. If he survives, he'll have a debt of 1,000 reais (US$449) for food and transport.

"It's a gamble -- you can make it big or end up like me," he said.

Images of the slave-like working conditions in which haggard, mud-drenched miners carried bags of earth on their shoulders at the Amazon's Serra Pelada mine became world famous through Brazilian photographer Sebastiao Salgado.

At Bom Jesus, miners lug buckets of rocks and earth by hand through narrow tunnels that risk collapsing. Teams of around four miners get only 35 percent of output, while their bosses, who pay for equipment and transport, take a 45 percent cut.

Valmir Climaco, a cattle rancher and logger, says he owns the entire complex even though the land belongs to the state. He takes the remaining 20 percent cut of output, and has a monopoly on selling fuel, power and some foods at inflated prices.

"If anybody crosses him, he pulls out his gun," one woman in Bom Jesus whispered. "But don't say I told you."

Some miners end up accumulating debt, which they work off as if they were indentured servants.

"It's a jungle prison," said Jose Geraldo Torres, a national legislator for the Amazon state of Para.

The government says there are 200,000 wildcat miners in Brazil but experts say there may be twice as many, mostly illegal. Authorities try to get them to form cooperatives and comply with environmental regulations.

But in Bom Jesus the occasional visit from an official does little to impress the 1,000 desperate miners. Despite warnings, they still work with highly toxic chemicals like mercury to amalgamate crushed iron ore. The runoff flows into the river.

"There isn't a federal police post for a stretch of nearly 1,000 km (625 miles) in eastern Para. To have rule of law, you need somebody to enforce it," said Torres.

(Editing by Stuart Grudgings and Cynthia Osterman)