Sun, Apr 19, 2009 - Page 9 News List

Global crisis sparks gold rush in Brazil’s Amazon

Many of the country’s hundreds of thousands of miners risk malaria and mercury poisoning only to squander their earnings on gambling and prostitutes

By Raymond Colitt  /  REUTERS , BOM JESUS, BRAZIL

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 1,000 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 rumors 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 pickax 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 their health and the 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 US$1,000 an ounce earlier this year before retreating to about US$890, triggering a local economic boom as they spend their bounty.

“It’s fueling our commerce. I don’t know what we’d do without mining,” said Seme Sefrian Junior, an official in Itaituba, a town 450km 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.

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 liquor distilled from sugarcane.

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