China’s Zijin Mining Group has been embroiled in an underground conflict against local armed groups and illegal miners, squaring off in Colombia’s gold-rich Antioquia region.
In late 2019, China’s state-owned enterprise Zijin Mining acquired the Buriticá mine from Canada’s Continental Gold for USD$1 billion, seeking to tap into one of South America’s most significant gold deposits. However, human adversaries, rather than geological barriers, quickly presented unforeseen challenges to the investment.
These include illegal miners, often supported by the notorious Clan del Golfo drug cartel. These miners have infiltrated the operation through an extensive network of clandestine tunnels, causing substantial losses. In a single year, over 3.2 tons of gold, worth approximately USD$200 million, were stolen, accounting for 38 per cent of the mine’s total production.
The illegal mining operation is driven by a sophisticated and well-organized network. The Clan del Golfs protects and facilitates access for miners from Colombia and Venezuela, who earn up to USD$5,000 per month by working in unauthorized tunnels.
In return, the cartel takes a substantial share of the profits, creating a complex economic system that directly undermines Zijin’s legitimate mining operations.
Conversely, however, the illegal mining activities have escalated beyond economic losses, creating severe security risks.
Armed attackers have shot workers, set vehicles on fire, and used explosives to obstruct or damage Zijin’s operations. Investigations have linked the Clan del Golfo to these violent incidents.
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Zijin filed $430M lawsuit against Colombian government
Frustrated by these challenges, the company has filed an arbitration case with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), seeking compensation for the lack of adequate security protection.
Zijin also collaborates closely with local police and security personnel to strengthen protective measures around the mine. Despite the significant challenges, the company remains determined to sustain gold production and meet its annual targets.
Furthermore, Zijin also filed a USD$430 million lawsuit against the Colombian government. The company asserts that authorities failed to protect its investment and allowed illegal miners to operate without consequences.
Colombian officials argue they lack sufficient resources to eliminate illegal mining and warn that a large-scale crackdown could trigger widespread violence.
President Gustavo Petro’s administration has introduced reforms aimed at transitioning from traditional mining to environmentally and socially sustainable practices. These reforms have sparked concerns about potential monopolization by a state-owned company, adding complexity to Zijin’s operations.
The conflict impacts the local community of Buriticá both financially and socially. Illegal mining exacerbates environmental degradation, including mercury pollution in waterways, while creating social instability as the community finds itself caught between a foreign company’s operations and local criminal elements.
The situation reveals the complex risks of conducting mining operations in regions with significant security challenges. A senior Zijin security official candidly acknowledged that the company is “losing the war” against illegal mining, emphasizing the gravity of the problem.
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