Late last month Costa Rican authorities completed 32 raids, arresting 27 people involved in illegal mining and an affiliated gold-laundering ring. The investigation began in April 2019, after authorities at San Jose’s Juan Santamaria International Airport noticed an unprecedented increase in the amount of gold listed in export documents filed.

The investigation was thorough and intense, uncovering a sophisticated multi-level extraction and export operation. The operation involved different well-organized teams responsible for mining, molding, transporting, laundering and exporting the gold. According to Walter Espinoza, general director of the Organismo de Investigacion Judicial (OIJ), the ring generated at least $600 Million in international sales, a level of profits not typically associated with other Central American countries. Police were able to recover cash, drugs, gold bars, and phony export documents.

The gold was illegally mined in either Corcovado (western Costa Rica), or in Crucitas de Cutris (along northeast Nicaraguan border), and moved to the United States through companies dedicated to foreign trade and export, according to authorities. It is believed that illegal mining has been going on in Costa Rica for years, syphoning off Costa Rican natural resources, and contributing little to the economy while doing irreparable damage to the environment.

Breakup of this ring comes on the heels of a government ecological impact report that discovered illegal miners in Crucitas de Cutris had taken over at least 70 hectares of land between 2018-2019, an increase of 156% in the total territory exploited. The government study also revealed that the expansion of illegal gold mining had polluted 35 local bodies of water, damage that will take decades to undo. The study estimates that miners extracted about $200 Million from the region between the years 2017 and 2018.
The Canadian company Infinito Gold Ltd was granted a legal mining concession in 2000, but environmental groups opposed the project, and Infinito pulled out in 2011, leaving half-constructed infrastructure and half-executed mining plans. What they left behind was almost immediately taken over by illegal miners, particularly Nicaraguans from only three miles to the north. Their techniques were crude and environmentally destructive, leaving damage at each excavation site.

This recent interdiction operation by the OIJ indicates that prosecutors are now going after not just the illegal miners, but also the criminals who have been using a web of front companies to launder illegal gold, and deposit the proceeds into the bank accounts of professional criminals. The OIJ reports hundreds of falsified documents filed to export gold bullion to Los Angeles, Miami, New York and Houston. They suspect that several officials of the Costa Rican Ministry of Finance were involved, providing guidance and cover for the group’s money laundering activities.
Prosecutors have also opened a parallel investigation into Costa Rican drug smuggling, which has gone hand in hand with illegal mining in many South American countries. Insight Crime Newsletter published its GameChangers 2019 series earlier this year in which they declared that profits from illegal mining are comparable to those of drug trafficking, particularly in Peru, Ecuador and Venezuela.

The penalty for illegal mining in Costa Rica is between 3 months and 5 years, according to the mining code. With the current economic catastrophe and high level of unemployment, illegal mining is sure to continue in Costa Rica, with people reportedly coming to Corcovado in droves searching for gold.

When asked for possible solutions to the mining conflict, Giorgio Murillo, director of the Geological Institute of Costa Rica replied, “There is no other alternative. The only viable plan is to develop a professional mining enterprise which simultaneously addresses environmental sustainability.” No one can guess how long that will take, and how the plan will develop while Costa Rica continues to be focused on the fight against COVID-19

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