The Journal. - The Underground Battle for Colombia's Richest Gold Mine

Episode Date: January 2, 2025

Gunmen of the Gulf Clan, a drug-trafficking militia in Colombia, are seizing tunnels inside one of the largest gold motherlodes in Latin America. The mine belongs to Zijin Mining Group, a Chinese company, which says it has surrendered nearly two-thirds of its tunnels and lost an estimated $200 million worth of gold in 2023. WSJ's Juan Forero reports. Further Reading: -A Drug Gang Stole 3 Tons of Gold in a Scam So Perfect It’s Still Going  Further Listening: -Smuggling Migrants Toward the U.S. Is a Booming Business  -Why Black Lung Is Rising in Coal Country  Learn more about your ad choices. Visit megaphone.fm/adchoices

Last summer, our colleague Juan Ferraro left his home base in Bogota, Colombia, to visit a small town in the Andes Mountains. You know, you're on a highway, and then you turn off, and you're very soon on a very narrow road that is a winding road that starts to drop toward a valley. Beautiful scenery, you see this tapestry of different shades of green where farmers are producing their crops.

And down below, several miles down, is the town of Buritica. Buritica sits nestled within the mountains. And in those mountains is a resource that people have been fighting over since the arrival of Spanish conquistadors. Shining, glimmering, valuable gold. Nowadays, it's not the Spanish who are looking for gold. Instead, it's a multinational giant out of China,

the Zijin Mining Group. Zijin's mine in Boritica is the richest gold mine in Colombia. When Juan visited, he found a mine under siege. When we got deep into the mine, there's a point where Zijin is just not in control anymore. And so what you see are sandbags everywhere. And behind those sandbags are guards, and they're outfitted in bulletproof vests and so forth, and they're toting shotguns. On the other side of the sandbags is a rival group of miners who are invading Zegent's tunnels to steal the company's gold.

In 2023, the miners stole tons of it, worth about $200 million, according to the company's gold. In 2023, the miners stole tons of it, worth about $200 million, according to the company's estimates. And they're stealing it with the help of a powerful militia group, meaning the conflict often turns violent. The way they put it is, this is underground trench warfare. I mean, it is 600, 700 yards underground. I don't know of another place in the world where you have two sides that are going at it that far underground. And of course, they're fighting over gold.

Welcome to The Journal, our show about money, business and power. I'm Jessica Mendoza. It's Thursday, January 2nd. I'm Jessica Mendoza. It's Thursday, January 2nd. Coming up on the show, the battleijin Mining Group since 2020. Zijin Mining Group is a Chinese state-controlled company, and it operates all over the world. I mean it has operations in the Congo, it has operations in Asia, of course in China and in many other countries.

How important is Zhejiang Mining Group to China? Well, Zhejiang Mining Group is one of many mining companies in China, but it's an important one because it is one of the largest miners in the world. And of course, China is looking for commodities of all kinds all over the world, for electric vehicles, for all kinds of electronics and everything. So this is an important operation for them. They can't afford to just lose it. The company bought the mine for about $1 billion.

But since taking over the mine, Zijun says they've lost a significant portion of it. Two of the mine's three sections have been taken over by rival miners looking to steal the company's gold. And leading the invasion of Zijun's mine is Colombia's most powerful drug trafficking group. It's called the Golf Clan.

The Golf Clan. Clan Del Golfo. The powerful golf clan drug cartel. They control many of the routes used to smuggle drugs to the U.S. and beyond. And are also engaged in extortion and illegal mining. And the golf clan is, you know, people call them gangs, they're not really gangs in Colombia, they're far bigger than that. This is an organization that could have as many as 7,000 members that is very much running roughshod over northwestern Colombia.

And they're involved as a lot of organized crime outfits in Colombia and in other developing countries. They're involved in myriad crimes. Their main thing is drug trafficking. They're also involved in extortions, meaning, you know, extorting small businesses and small towns, and migrant smuggling. There's a lot of migrants who are looking to come through Colombia en route to the United States, and the Gulf Clan will help move them for a price. But they're also involved in gold mining, which in many ways is turning into a more lucrative area or sector for them. In recent years, the price of gold has reached record levels to around $2,600 per ounce,

giving rise to a gold rush in Colombia. The Gulf Clan has sought to capitalize on that gold rush by partnering with hundreds of miners in Buritica. Together, the miners and the Gulf Clan have been breaking into Zigen's mines to take the company's gold. It's not simply that the miners are doing their thing and paying a kickback to the Gulf Clan. It's that the Gulf Clan is actually heavily involved in organizing, in providing logistics and equipment and muscle to the miners. And what does the Gulf clan ensure? They ensure that these miners have heavy equipment to be able to cut through rock and get underground,

that they have provisions to be underground for two, three, four, five, six weeks or longer, these miners will go in and they won't come out for weeks. So they need to have food, they need to have water, they need to have a place to sleep, etc. The Gulf Clan also provides them with prostitutes and with drugs and so forth. How do the miners actually break into the mine? That is one of the most interesting aspects of all of this. As I mentioned, there's a mountain.

On that mountain, there are little houses. The miners and other people allied with them have taken over some of these homes. And from these homes, they just basically start drilling down. So they might go into the bathroom and just drill down. And they're drilling down far. I mean, we're talking 500, 600, 700 yards deep into the mountain to finally be able to connect with Zizhin's big tunnels. On his trip to Buritica, Juan met Eric Dubierre,

a miner who's worked the illicit tunnels that burrow into Zizhin's mine. And he told Juan he does it to provide a better future for his wife and 4-year-old son. Eric says the Gulf Clan provides miners like him with basic comforts, like a kitchen. There's everything. There's a kitchen. There's everything. There's where you can cook. Where you can do your needs. And the pay is good.

In a month, miners like Eric can extract $5,000 or more in gold, about as much as a business executive could make in Colombia. But it's security forces. Combat between them and the Gulf Clan happens pretty much every day. What happens when Zizhin's security forces meet, you know, Gulf Clan miners? Like, what does that look like? Well, that is very dramatic because what ends up happening is when they break through, they sometimes end up throwing explosives and shooting in the direction of the Zijin personnel.

And that's when the Zijhin personnel, they'll shoot back, but generally their strategy is to back off. The Zizhin people know that they're coming and eventually they'll spot like light from several hundred yards away or a hundred yards away. And they know that, boom, these guys have broken through and now we have to see it here.

In 2023, two guards were killed and several others were wounded as a result of the fighting. A security official with the company said that it's losing its war against the Gulf clan. Zijin can't push them out of their tunnels without help. How has this been allowed to happen? Where is the Colombian government in all of this? This is happening in Colombia. Yeah, well, the Zijin executives who were exasperated by the situation basically say

that the Colombian government is AWOL. And when I did talk to the Colombian government, you know, the vice minister of defense, she and I had a really long talk about this and she acknowledged that this is a terrible situation. But she also said that the demands that the company makes are not realistic. The conflict between Xi Jinping and the Colombian government is next. The political and political Zijin executives say their underground war against the Gulf Clan worsened after 2022, when a new party took control of Colombia's government.

Past governments by and large welcomed foreign mining companies like Zijin, and they took a harsh stance against groups like the Gulf Clan. But the new administration, led by President Gustavo Petro, has taken a different approach. Since coming to power, the Petro administration's method of dealing with criminal and drug trafficking groups has been to avoid direct conflict. They prefer to try to engage armed groups in conversations and dialogue. They have offered the possibility of peace talks to some of these organizations. So far that plan has gone badly because many of these organizations are very much interested in continuing, you know,

to mine gold, to traffic drugs, to move migrants, which bring them a lot of money. And they have also expanded across Colombia in the last two years according to the state's own figures. Zijun has urged the Colombian government to take action against the Gulf clan by cutting off supplies to illegal miners and closing off routes used by criminals stealing Zijun gold.

But Zijun's CEO told Juan that he hasn't seen much will from the Petro administration to help the company. And so last July, Zijin sued the Colombian government. The situation is so serious for Zijin mining that they have filed a $430 million lawsuit at the World Bank's International Center for the Settlement of Investment Disputes. And they allege that Colombian authorities

simply aren't doing their job. This has not caused any joy in the Colombian government. In my talks with the Colombian officials, they were actually, you know, they did express, you know, their irritation that the Chinese had filed this lawsuit against them. What does the company hope to get out of this lawsuit? I think that the company wants the Colombian government to act.

And they are hoping that the Colombian government does change its policies and does take this armed group on. Colombia's defense ministry says that Zijin bought the mine knowing that illegal extraction of gold was taking place. The ministry also said Colombia doesn't have the capacity to flush out the clandestine miners and that the government wants to avoid violent confrontations that might endanger civilians. Other officials have suggested that Zijin give up some of its mine holdings to trespassers

in a bid for peace. Colombia's government says that the fight for Zigen's mines is a symptom of a bigger problem, that many Colombians have to resort to illegal work to get by. To address that issue, the government says it needs to transform the economy of places like Burritica so that citizens have a choice of better jobs. One way to do that is to open up a path for illegal miners to legalize their operations. On a strip to Buritica, Juan visited one mine

that could potentially go down this path, La Centena. A handful of illegal miners run a small operation there. This mine is a lot different than Xi Jin's. It's full of narrow corridors that burrow about 200 yards into the mountainside. The ground is flooded with muddy water. But at the end of the tunnel, above their heads, the ceiling glimmers. One miner, Andres Rave, points to a vein of gold, running his fingers over the minerals. Andrés, show me again.

This is the vein that goes here. This is the one that carries the gold. They get to work extracting the gold. Among the people working this mine is Eric Dubierre, the miner you heard from earlier who's worked in the illicit tunnels that break into Zijon's mine. Eric says working these smaller mines is also dangerous. The miners try to make them as safe as they can,

using wood beams to support the ceiling above them. But here, if an accident happens, they don't get any protection or insurance. They're on their own. In the future, the work will be mechanized. After there's a mineral, it will be normalized and mechanized. Eric and the other miners want the government to recognize and legitimize their mining, so they're no longer operating legally. President Petro has signaled that he wants to give out more licenses and help to miners,

but has not made any big changes. La Centena has also caught up in the Zhejiang conflict. The Chinese company says they have the rights to this land as well, but miners like Eric dispute that claim. So far, the Petro government has continued to stay out of the fight. Petro has criticized past governments for handing over concessions to big mining outfits, including

Zhejiang, and he has talked about how the state needs to support artesional miners, meaning small-scale miners. But if you talk to a lot of these small-scale miners, they feel that they haven't gotten much help because what they want is to be legalized and to have working cooperatives and you know for their activities to receive state assistance and that kind of thing. You know we're not seeing that happening so right now the state really has a lot of critics from from many different directions. What they do say is that their policy is basically to try to provide a new kind of economy for

the people of Columbia's rural areas and that if they're able to build a new economy for people then folks won't have to depend on illegal mining or other illegal sectors like drug trafficking to make a living. But of course this is something that would take, you know, decades. But in terms of like actual action, Thursday, January 2nd. The Journal is a co-production of Spotify and The Wall Street Journal. If you like our show, follow us wherever you get your podcasts. We're out every weekday afternoon.

Thanks for listening and happy new year. We'll see you tomorrow.