Colombia's flourishing illegal gold mining business requires explosives, many of which are sourced illicitly. This essential yet overlooked trade has opened the door for powerful criminal bosses to forge a lucrative black market that involves a large cast of characters, including assassins, legal mining companies and even the Colombian army.
In Segovia, a few hours north of Colombia's second-biggest city, Medellín, fluorescent bulbs light a mine where people are not digging gold, but carefully removing serial numbers from military-issue explosives.
Only the Colombian army can distribute these powerful "Indugel" explosives, which are the favored option for opening up mining tunnels in this gold-rich region. But it's not just legal companies that use them. Tons are diverted to the black market every year to supply the thousands of informal miners working without proper permits.
A security force raid on January 14 shut down this clandestine operation. Almost 3 metric tons of explosives were seized and two people were arrested, El Colombiano reported.
A short while later, authorities told InSight Crime, the mine's owner apparently received a call from a member of the Urabeños, Colombia's most powerful criminal group. They wanted to know how the owner had allowed so much explosive material to be seized, and demanded payment in return.
SEE ALSO: Urabeños News and Profile
According to judicial and government officials consulted by InSight Crime, there are indications that the Urabeños hold a near monopoly over this highly profitable black market in the department of Antioquia, where Segovia is located. Sources suggested that the crime group sees illegal explosives as a simpler source of revenue than drug trafficking, the traditional cash cow for Colombian criminals.
Several factors make illegal explosives a worthwhile investment for the Urabeños, even though the group already has stakes in illegal mining, the drug trade, sex trafficking and other criminal industries.
One is the huge demand. The immense gold reserves in Antioquia department are the livelihood of thousands of miners. Those who have not been hired by legal companies require explosives to carve out their own clandestine tunnels. But the homemade alternative to Indugel, commonly called "polvo loco" ("crazy powder"), is considered dangerous and unstable.
Secondly, these miners cannot go elsewhere. To secure their hold over the trade, the Urabeños allegedly summoned miners from the region to a meeting in which they warned that no one was permitted to sell Indugel explosives outside of their network. "Pirate" groups who have tried to trade independently of the Urabeños have allegedly been exterminated, while others who resell their own explosives must pay extortion fees to the Urabeños.
Perhaps most importantly for the crime group, this is a low-risk enterprise. Until approximately a year ago, when authorities opened investigations into this illegal network, almost no one has looked into the issue. Indeed, judicial officials confirmed to InSight Crime that only low-level crooks such as transporters have been detained so far, although bigger arrests are expected in the future.
How the Black Market Works
Operations have so far revealed at least 60 mining associations buying into the Urabeños-controlled explosives black market in just two Antioquian mining towns, generating around $350,000 in proceeds per month -- over $4 million a year.
This criminal network requires collaborators in the legal sphere, judicial sources explained. Formal mining companies need to have a mining title and seemingly endless paperwork to receive authorization from the Mining Secretariat, the Defense Ministry's weapons control department (Departamento Control Comercio de Armas Municiones y Explosivos - DCCA) and environmental authorities. With this they can buy mining explosives from Colombia's only legal producer, the military manufacturer Indumil.
Once they have this valuable permit, co-opted companies purchase explosives from the military, with some allegedly bribing officials to give them extra "manos" (an explosives unit worth around $250) off the books. Investigations suggest that these manos are then delivered to the Urabeños, who resell the product at a black market rate of up to $1,500, a profit margin of around 500 percent.
This network has also affected prominent mining institutions. Despite efforts to remove the Indugel serial numbers, several seized explosives have been traced back to their original buyers, which include mining companies subcontracted by multinationals. In other cases, explosives have apparently been stolen from multinationals and resold on the black market. It is not clear what level of involvement, if any, multinationals themselves have in the illegal trade.
According to judicial officials, this process cannot work smoothly without the negligence or collaboration of security officials and government bodies. There are suspicions among authorities that mid-level army officials may be facilitating the granting of permits to shady companies. In addition, transporters of illegal explosives who are captured red-handed can bribe police (some of whom are on the Urabeños' payroll) to avoid arrest and keep some of their cargo.
Even when corrupted companies have been exposed and penalized, some simply change their registered name and continue as usual, apparently under the lax watch of the Mining Secretariat. The same body is also responsible for making sure that mines obtaining explosives are actually in operation, which is currently not happening, judicial sources said. When security forces raided the mine in Segovia, it had been out of operation for at least a month.
In other cases, a lack of communication among institutions has aided this black market. Remarkably, the Defense Ministry's weapons control department (DCCA) was apparently unaware of criminal behavior on the part of buyers until recently, even though other government agencies knew about it.
Graphic c/o El Colombiano illustrating explosives seizures over the past year
A Larger Trend
Seeing as this phenomenon only started attracting government attention months ago, it would be of little surprise if similar criminal networks existed in other mining hubs around Colombia. Informal mining also occurs in regions such as Cauca, Córdoba, and Bolívar, where authorities have yet to look into the use of illegally-sourced explosives.
This entire dynamic is linked to the lack of emphasis the government had placed on illegal mining in Colombia until relatively recently. While security efforts were for decades consumed by the "war on drugs," the criminal successors to the big cartels diversified to include mining in their criminal repertoire. According to authorities, the illegal mining industry is now up to 200 percent more profitable to criminals than drug trafficking, and over the past few years it has become a law enforcement priority.
SEE ALSO: Coverage of Mining
These same criminal groups have now capitalized on weak oversight of the explosives trade, and the recent probes and seizures may be the catalyst for further investigations. The army is now paying more attention to explosives-related misconduct and taking definitive action; it has already blocked at least nine explosives permits in Antioquia on suspicion of illegality.
But the government must also address issues in the legal sphere that are enabling this the black market. Miners are often faced with almost insurmountable obstacles when trying to set up formal operations, pushing them to clandestine alternatives. InSight Crime investigations have found that local government corruption and ineptitude have hindered legitimate mining businesses' bids to obtain explosives permits. Removing some of the hinderances faced by local miners seeking to set up legitimate operations would likely help curtail this revenue stream for the Urabeños and the corrupt network that sustains it.