Brasilia (Reuters) – Increased European Scrutiny Needed on Brazilian Gold Imports

All Brazilian gold imports by Germany and 71% by Italy come from areas of the Amazon where illegal mining is rampant, a think tank said on Tuesday, calling for increased European scrutiny.

Key Findings

• All 1.3 tonnes (2,866 lb) of gold imported by Germany from Brazil in 2023 originated from the state of Amazonas, according to a study by Sao Paulo-based Instituto Escolhas using government data.
• Italy imported 356 kg (784.85 lb) of Brazilian gold last year, including 254 kg from Pará and São Paulo.

Background

Wildcat gold mining, known as garimpo in Portuguese, has surged in Amazonas and Pará in recent years due to relaxed environmental controls under former President Jair Bolsonaro, leading to increased deforestation.

São Paulo state produces no gold but serves as a major hub for sales and export of the precious metal, often with unclear legal origins.

EU Regulations

The European Union has strict regulations to curb the sale of ores from dubious origins, but the due diligence process has many blind spots. Larissa Rodrigues, director of research at Instituto Escolhas, stated, “It cannot claim to have a responsible purchasing policy… European companies buying the gold have no idea where it was mined or who sold it to traders for export.”

Approximately 94% of the Brazilian gold imported by Germany and Italy, the main buyers in the EU, has dubious origins, arriving from hundreds of gold prospects in the Amazon.

Additionally, more than half of the 68 tonnes of gold exported by Brazil last year has suspect origins that cannot be traced, despite current government efforts to crack down on illegal gold sales.

Other Importers

Canada is the primary buyer of Brazilian gold, sourced from legally licensed mines, followed by the United Kingdom. However, Brazilian gold imports by Switzerland, the second-largest buyer, include bullion from wildcat mining sites, much of which ends up in the EU, which receives 70% of its gold from Switzerland.