Itaituba: a trip to the gold panning capital of the Brazilian Amazon

*In collaboration with Ana Magalhães

One October afternoon, in the center of Itaituba, on the banks of the Tapajós River, almost all the stores were closed; only those buying gold decided to open. The streets of this city in the Pará Amazon were reminiscent of a desert. Not only because it was burning under the most intense drought in the area in 40 years, but also because it was a municipal holiday and there were few people on the streets. 

On the same avenue where the banks are located, several establishments display signs with the words “oro”, “gold” and “se compra” in sequence for blocks. Inside one of these stores that buy gold illegally, four men, wearing gold watches, gold bracelets, gold rings and gold necklaces, fiddle with their cell phones under a ceiling fan. There is an oven full of junk next to the wall and mirrored glass blocking the view of whoever is outside. A large white man stands up. His hair is slicked back, wet with gel, his shirt open to his chest: “Do you want to sell metal?” he asks.

On that day, vendors on the “street of gold” were celebrating the effects of the war between Israel and Hamas, which had caused a 5% increase in the price of the mineral, from around $60.5 to about $64.5 per gram. In Itaituba, stores were paying $59. “When there was an explosion in Lebanon, people thought it was a war and in a single day the [gram of] gold went up $5. 

So imagine: 1 kilo of gold is a bar that small. You had bought it in the morning and in the afternoon you had earned 5,000 dollars”, says André, another buyer, enthusiastically. At the beginning of November, according to the Investing platform, the US bank Morgan Stanley published a report which, mentioning the tension in the Middle East, recommended investing in gold, considered a “safe haven”.

But immediately André’s expression falls apart, his eyes narrow, he becomes discouraged. The latest operations of the Brazilian Institute of Environment and Renewable Natural Resources (Ibama) and the Chico Mendes Institute for Biodiversity Conservation (ICMBio) against illegal mining in the surrounding area, in addition to recent investigations by the Federal Police into the gold trade chain, have put the brakes on business, he says. 

After 627 operations unleashed by the Federal Police against illegal mines between January and November 2023, 439 arrests, 736 search and seizure warrants, $91.8 million confiscated and a loss of $1.5 billion for miners across Brazil, there was an atmosphere of uncertainty in the gold capital.Sales had dropped and seizures, increased.

During the government of Jair Bolsonaro (2019-2022), when the most recent gold rush in the Tapajós River began, with the support of the former president (whose father was a miner in Serra Pelada), illegal mines proliferated not only in the Itaituba region, but also in other Amazonian spots. 

The area exploited by illegal mining within indigenous lands grew 265% between 2018 and 2022; in Conservation Units (natural areas legally instituted and protected by the Brazilian government) the increase was 75% in the same period, according to a recent study by MapBiomas, a collaborative network composed of NGOs, universities and technology companies engaged in socio-environmental studies. 

Almost half (40.7%) of artisanal mines in the Amazon were opened from 2018 onwards and more than 50% of those within indigenous lands as well. The mining boom was so overwhelming in recent years that the area dedicated to artisanal mining (legal and illegal) has surpassed that of industrial mining.

The scheme

Because they pay less taxes than mining companies, ore from artisanal mines is always in high demand. “Gold from DTVMs is cheaper than from a mining company in Minas Gerais,” says Sergio Leitão, executive director of Instituto Escolhas, one of the main non-governmental organizations dedicated to researching this sector in Brazil. 

The acronym DTVMs refers to the Distribuidoras de Títulos y Valores Mobiliarios, which are financial institutions authorized by the Central Bank to buy and resell gold from these mines in the country. “Because it only has to pay the Tax on Financial Operations (IOF), while a mining company also has to pay the Tax on the Circulation of Goods and Services (ICMS), which is much higher. It is in the interest of the companies that buy gold to source gold from these distributors.” 

In addition to the metal extracted from these mines, which, according to legislation, are usually areas of up to 50 hectares whose exploitation should be artisanal – but in most cases it is not – there is industrial exploitation, dominated in Brazil by large multinationals, such as Kinross and AngloGold Ashanti. In the Tapajós region, the strongest mining companies are the English Serabi Gold and the Canadian Brazauro.

Itaituba stands out in this study because it represents 16% of all the holes that miners and companies have drilled in search of gold in Brazil, according to MapBiomas. 

It is not surprising, therefore, that the municipality has become by far the largest collector of the Financial Compensation for Mineral Exploitation (Cfem), a compensation that those who extract wealth from the ground have to pay to the national government, the states and the municipalities. 

ACTIVITY. In the streets of Itaituba, you can see goldsmith tables, gold buying stores and even a monument to the miners.

Photo: Michael Dantas / Sumaúma

BUSINESS. Several establishments display, along blocks, signs with the words “oro”, “gold” and “se compra”.

Photo: Michael Dantas / Sumaúma

Between 2018 and 2021 there was a 475% increase in the city’s revenue, which jumped from $2.2 million to $12.4 million.In 2022 the municipality produced 12.4 tons of gold, which equates to approximately $740 million, a figure eight times higher than the city’s budget for that year. 

When analyzing the data on the origin of the ore, researchers from the Remote Sensing Center of the Federal University of Minas Gerais identified that 5.6 tons were legal, linked in the Financial Compensation for Mineral Exploitation to regular permits. Another 6.8 tons (55%) were considered irregular: 1.7 of which were linked in their documentation to mines that did not even exist in the territory. Seen by satellite images, the points on the map that should show gold extraction covered areas of dense jungle.

Investigators and prosecutors from the Federal Public Prosecutor’s Office in Pará began to realize that there was a huge gold laundering scheme. 

Of the 5,831 gold mining permits granted since 1980, according to the National Mining Agency, 2,361 correspond to areas of Itaituba; among which 1,026 are active. However, not all of them produce as much gold as attributed to them, an indication that they may be using these licensed mines around the city as a false source for gold illegally extracted from other areas. The police became aware of this. Since then, Itaituba, known as “pepita city” – which in Tupi means “small stone” – has acquired a new nickname. Authorities now call it the “capital of gold laundering”.

“We have data that reinforce this statement. First, Itaituba concentrated in 2021 almost 50% of the artisanal mines with permits in the country. Second, it is the city with the most gold buying centers authorized by the Central Bank. In the data we gathered at the end of 2021, Itaituba had 23 of these centers,” says researcher Rodrigo Oliveira, co-author of the study Terra Rasgada, on the advance of artisanal mining in the country. 

Gold buying centers are the “local” arms of the distributors. When a Securities Dealer (or its buying center) purchases the metal, an invoice must be completed indicating the location from which the gold was extracted. When this declaration of origin is false, the legalization process is consolidated.

The mining boom has been so overwhelming in recent years that the area dedicated to artisanal mining (legal and illegal) has surpassed that of industrial mining.”.

“In many of the operations carried out in the states of Roraima [where there are only two legalized mines], Rondônia, Amazonas and also in the Kayapó Indigenous Land [where the activity is prohibited], a large flow of money from Itaituba was identified,” adds Oliveira, who is also an official of the Federal Public Prosecutor’s Office.  

In addition to being Brazil’s mineral laundry, Itaituba is a city whose mayor, Valmir Climaco (of the Brazilian Democratic Movement of Pará party), owns mines and a ranch where four years ago police discovered a plane with 580 kilos of cocaine and two rifles. 

During his first term, the governor of Pará, Helder Barbalho, of the same party as Climaco, transferred to the municipalities the responsibility of issuing environmental licenses for artisanal mines. The mayor of Itaituba went out, at that time, to hand out permits to destroy the forest. Since January 2017, there were more than 500, which were never inspected; he himself admitted it to the newspaper O Globo.

The mayor denies having benefited from illegal gold mining in the area. “No, I never [exploited gold illegally],” he told Sumaúma / OjoPúblico. “I own [mines], they are legalized, but stopped for three years because there is a lot of bureaucracy, so we decided to stop [sic]. And it’s not giving gold almost [sic]. No, it’s not worth continuing. About the cocaine discovered in his hacienda, he says: “It was the drug traffickers who landed there without an order from us and we denounced it”.

Itaituba is a city of crumbling buildings, open sewers, precarious traffic signs, floods, misery and a murder every eight days, but it is full of 4×4 pickup trucks that cost the price of an apartment. It has 123,000 inhabitants, of whom only 18,000 are formally employed, according to the Brazilian Institute of Geography and Statistics, but everywhere you look you can see men in expensive cars sporting gold…