Decline of Colombia's illegal gold mining will be slow

Outlook

With gold prices falling and a government crackdown showing no sign of abating, illegal mining will become less lucrative in 2016. Nevertheless, the practice will continue to be profitable. Legitimate mining companies can expect to invest heavily in security, while tightening government restrictions could mean more red tape.

Although guerrilla involvement in mining is likely to decline, because the Revolutionary Armed Forces of Colombia (FARC) is on the verge of demobilisation and the National Liberation Army (ELN) is likely to begin formal peace talks in 2016, the breakdown of guerrilla organisational structures will provide recruitment opportunities for criminal organisations and see new groups emerge. This may trigger an initial uptick in violence and human rights abuses, and perpetuating the threat to mining companies.

Impacts

• Falling gold prices will squeeze criminal profit margins and could see extortion fees rise, and workers forced to increase output.
• While the value of cocaine is lower than that of gold, the increasing difficulties of mining will see renewed cocaine production.
• With the FARC on course to make peace this year, many former fighters, lacking legitimate job opportunities, will turn to organised crime.
• A surge in violence is likely, potentially affecting international targets, as the military takes on heavily-armed criminal groups.