Who Buys the “Blood Gold” of Peruvian Andean?

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La Rinconada, in the Peruvian Andes, is the home of the world’s highest, chaotic, poisonous and illegal goldmines. La Rinconada is also considered one of the most horrific places on earth: a crime gang-run city, spreading through a valley and up the hills, no running water, no sewerage, no electricity grid.
The illusion to hit it “BIG” by finding the legendary ‘gold rock’ is a passion; it is obsessive. And if and when a miner does find a treasure to keep, he is vulnerable of being robbed, even killed, body discarded – another miner gone missing. Or not. Just disappeared. Maybe in a garbage dump. They are endless in Rinconada. They reflect the character of Rinconada. Refuse, waste, stench and death.
Nobody cares or not enough to investigate the death, the missing. It’s the name of the game. Miners come by their free will. They are not coerced. They enslave themselves, in the vane hope to get rich. Instead, they intoxicate themselves from mercury fumes, from a totally poisonous environment, daily exposure to heavy metals. For many, it’s a dream gone dead. That’s what poverty does; it kills while dreaming of a better world.
In Rinconada, the mafia rules. Police work in connivance. Murders and assassinations are of the order. Prostitution, alcohol and drug abuse is rampant. Nobody cares. It’s survival of the fittest. These criminal organizations are all local, meaning from the vicinity. No foreign mining companies are allowed. They, huge world (in)famous gold and precious metals corporations, are waiting ‘downstream’to buy the blood-ware, without identity, without origins. So that nobody can trace them to the crime.
If this is the case then, who buys the “blood gold” of Peruvian Andean? According to the report, large corporations do. One of them is the Swiss registered Metalor, one of the world’s largest gold foundries. Annually, about 3,000 to 3,500 tons of gold are mined across the globe. Switzerland refines about 70% to 80% of all the gold in the world. An estimated 20% to 30% of it is considered ‘blood gold’ – gold that stems from illicit mining practices, child labor, environmental and social destructions, land theft, corruption – just like from Rinconada.
As of now, Switzerland, the host of the globe’s largest mining corporations and gold foundries does not want to know the origin of the gold – possibly the environmentally and socially most destructive precious metal. Peter Koenig, an economist and geopolitical analyst indicated that Switzerland does not impose a code of ethics on the corporations that enjoy the Swiss tax-haven. The Swiss Government pretends that these mining corporations have their own codes of conduct, and the Swiss authorities trust that they adhere to their own standards of ethics.
Naturally, Switzerland is also the only OECD member that allows her parliamentarians to sit in as many corporate Boards of Directors as they wish. As a matter of fact, this is totally legalized conflict of interest. In this environment of white-collar illicit behavior, corporations like Metalor and Glencore flourish.
According to the report, a recently launched people’s referendum propagating ‘Responsible Mining’, was undermined in the Swiss Parliament by the ‘built-in’ mining lobby. It is common practice that Parliament, as well as the executive give their votum before the public vote on a referendum, another unfair practice, as it influences the voters’ final decision.
In the meantime, the Government of Peru accuses the Swiss foundry Metalor of financing and buying tons of gold from suspicious sources in Peru, meaning illicit gold or ‘blood gold’. Metalor is also investigated for participating in organized crime and money laundering from illicit gold deals on14 March 2019 as “The Metalor Group was the exclusive importer of gold from illegal mining, sold or shipped by Minerales del Sur SRL (Minersur) in the period from 2001 to 2018 in the amount of more than US$ 3.5 billion. Metalor is headquartered in the Canton of Neuchatel, Switzerland.”
Metalor is also being investigated for financing Minersur’s purchasing and sales transactions of gold from illegal sources. One of these illegal sources is La Rinconada. Other illegal sources stem from gold-digging in Peru’s Madre de Dios Amazon Region, where thousands of hectares of rainforest are being raided and devastated by mafia-type organizations, similar to the ones in Rinconada. Metalor denies the accusation, saying they only deal with reputable mining corporations.
What is it about gold that makes it destroy the environment, precious fresh water resources, the human spirit, sowing conflict among entire societies, abolishing their social fabric and bringing death to countless millions for centuries in exploited and abused regions of the globe? As economic analysts indicated, the real industrial value of gold is only about 15% to 20% of its speculative market value. But the gold fever is such that banks invented ‘paper gold’.
Anybody can buy gold without ever seeing the gold bar. The bank simply issues a certificate, an IOU for a certain amount of gold which, in theory, could be exchanged for the real thing at any time Madame or Mister Anybody would like to keep her/his gold bar in their personal household vault. Not so easy. As the Financial Times recently reported, there is more than 100 times more paper gold floating around than real gold is available on the market. If everybody would like to exchange their paper gold into real gold, the banking system would collapse, or would just simply fail to deliver.
Case in point was Germany. By tradition Germany had about 1,200 tons of gold, worth about US$ 50 billion, deposited in the FED in New York. In 2013, when the Germans awareness that their gold is being stored outside of German borders resulted in a public outcry, the Bundesbank wanted to withdraw and repatriate all of their foreign stored gold by 2020, but the FED said no, they could not deliver. The gold was simply not available.
Blood and crime are intimately linked to gold, it seems. The western monetary system was for a long time backed by gold. Professor Dan Rothental of London School of Economics asserted that today, western moneys are fiat money, not even backed by gold, just hot air. But the Russian Ruble and the Chinese yuan are backed by gold, as well as by their respective economies.
Back to La Rinconada, Metalor and Switzerland, home of more than two thirds of the world’s gold refining, how much of the reserve gold in the coffers of countries around the world is “blood gold”? How many people, children and eventually entire generations have to live in misery, their health degenerating from exposure to heavy metals and eventually leading to early and painful death, until human consciousness is able to stop the gold craze? Closing down hellholes like Rinconada and Madre de Dios mafia-run, all-destructive gold mines? And hundreds more of similarly devastating types mines around the world. Perhaps when the value of gold becomes what it ought to be, its industrial value, and nothing more and nothing less, humanity becomes richer by the values of human decency and respect for each other.