--:-- [Sound of a podcast intro]
--:-- Jessica Mendoza: Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza.
--:-- Ryan Knutson: And I'm Ryan Knutson. It's Thursday, January 2nd.
--:-- Jessica Mendoza: Coming up on the show, the battle for gold raging within Colombia's mountains.
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--:-- Ryan Knutson: The mine at the center of this conflict has been operated by the Zijin Mining Group since 2020.
--:-- Jessica Mendoza: Zijin Mining Group is a Chinese state-controlled company, and it operates all over the world.
--:-- Ryan Knutson: I mean, it has operations in the Congo. It has operations in Asia, of course, in China, and in many other countries.
--:-- Jessica Mendoza: How important is Zijin Mining Group to China?
--:-- Ryan Knutson: Well, Zijin 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.
--:-- Jessica Mendoza: 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.
--:-- Ryan Knutson: So this is an important operation for them.
--:-- Jessica Mendoza: They can't afford to just lose it.
--:-- Ryan Knutson: The company bought the mine for about $1 billion.
--:-- Jessica Mendoza: But since taking over the mine, Zijin says they've lost a significant portion of it.
--:-- Ryan Knutson: Two of the mine's three sections have been taken over by rival miners, looking to steal the company's gold.
--:-- Jessica Mendoza: And leading the invasion of Zijin's mine is Colombia's most powerful drug trafficking group.
--:-- Ryan Knutson: It's called the Gulf Clan.
--:-- Jessica Mendoza: The Gulf Clan. Clan del Golfo.
--:-- Ryan Knutson: The powerful Gulf Clan drug cartel.
--:-- Jessica Mendoza: The Clan del Golfo is a group delincuencial that has been strengthened in the last few years by violent actions.
--:-- Ryan Knutson: They control many of the routes used to smuggle drugs to the US and beyond.
--:-- Jessica Mendoza: And are also engaged in extortion and illegal mining.
--:-- Ryan Knutson: They also link to activities like illegal mining, extortion, trafficking of migrants and micro-traffic.
--:-- Jessica Mendoza: Organization that could have as many as 7,000 members that is very much running roughshod over northwestern Colombia.
--:-- Ryan Knutson: And they're involved as a lot of, you know, organized crime outfits in Colombia and in other developing countries.
--:-- Jessica Mendoza: They're involved in myriad crimes.
--:-- Ryan Knutson: Their main thing is drug trafficking.
--:-- Jessica Mendoza: They're also involved in extortions, meaning, you know, extorting small businesses in small towns and migrant smuggling.
--:-- Ryan Knutson: There's a lot of migrants who are looking to come through Colombia en route to the United States, and the Gulf Klan will help move them for a price.
--:-- Jessica Mendoza: But they're also involved in gold mining, which in many ways is turning into a more lucrative area or sector for them.
--:-- Ryan Knutson: 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.
--:-- Jessica Mendoza: The Gulf clan has sought to capitalize on that gold rush by partnering with hundreds of miners in Buritica.
--:-- Ryan Knutson: Together, the miners and the Gulf clan have been breaking into Zijin's mines to take the company's gold.
--:-- Jessica Mendoza: It's not simply that the miners are doing their thing and paying a kickback to the Gulf clan.
--:-- Ryan Knutson: It's that the Gulf clan is actually heavily involved in organizing in providing logistics and equipment and muscle to the miners.
--:-- Jessica Mendoza: And what does the Gulf Clan ensure?
--:-- Ryan Knutson: 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.
--:-- Jessica Mendoza: These miners will go in and they won't come out for weeks.
--:-- Ryan Knutson: So they need to have you know, food, they need to have water, they need to have a place to sleep, etc.
--:-- Jessica Mendoza: The Gulf Clan also provides them with prostitutes and with drugs and so forth.
--:-- Ryan Knutson: How do the miners actually break into the mine?
--:-- Jessica Mendoza: That is one of the most interesting aspects of all of this.
--:-- Ryan Knutson: As I mentioned, there's a mountain.
--:-- Jessica Mendoza: And on that mountain, there are little houses.
--:-- Ryan Knutson: And so the miners and other people allied with them have taken over some of these homes.
--:-- Jessica Mendoza: And from these homes, they just basically start drilling down.
--:-- Ryan Knutson: So they might go into the bathroom and just drill down.
--:-- Jessica Mendoza: Wow.
--:-- Ryan Knutson: And they're drilling down far.
--:-- Jessica Mendoza: I mean, we're talking 500, 600, 700 yards deep into the mountain to finally be able to connect with Zijin's big tunnels.
--:-- Ryan Knutson: A lawyer for the Gulf Clan said the group is not involved in the illegal mining at the Zijin mine.
--:-- Jessica Mendoza: On his trip to Buritica, Juan met Eric Dubier, a miner who's worked the illicit tunnels that burrow into Zijin's mine.
--:-- Ryan Knutson: And he told Juan he does it to provide a better future for his wife and four-year-old son.
--:-- Jessica Mendoza: Eric says the Gulf Clan provides miners like him with basic comforts, like a kitchen.
--:-- Ryan Knutson: No, there's everything.
--:-- Jessica Mendoza: There's cooking.
--:-- Ryan Knutson: There's everything.
--:-- Jessica Mendoza: There's where to cook, where to cook, where to cook your needs.
--:-- Ryan Knutson: And the pay is good.
--:-- Jessica Mendoza: 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.
--:-- Ryan Knutson: But it's dangerous work.
--:-- Jessica Mendoza: Ah, sí, las ganancias allá son muy buenas, pero mucho lo que arriesga uno por la luz, por muchas cosas, por la empresa que lo puede atrapar, hasta matar a veces, por lo del lodo.
--:-- Ryan Knutson: Y ha habido combates allá también?
--:-- Jessica Mendoza: Sí, claro.
--:-- Ryan Knutson: Hay combates a diario, a diario.
--:-- Jessica Mendoza: And Eric says that the biggest risk is running into Zijin's security forces.
--:-- Ryan Knutson: Combat between them and the Gulf clan happens pretty much every day.
--:-- Jessica Mendoza: What happens when Zijin's security forces meet, you know, Gulf Klan miners?
--:-- Ryan Knutson: Like, what does that look like?
--:-- Jessica Mendoza: Well, that is very dramatic.
--:-- Ryan Knutson: 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.
--:-- Jessica Mendoza: And that's when the Zijin personnel, you know, they'll shoot back.
--:-- Ryan Knutson: But generally, their strategy is to back off.
--:-- Jessica Mendoza: You know the Zizhine people know that they coming and eventually they spot like you know 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.
--:-- Ryan Knutson: In 2023, two guards were killed and several others were wounded as a result of the fighting.
--:-- Jessica Mendoza: A security official with the company said that it's losing its war against the Gulf Klan.
--:-- Ryan Knutson: Zijin can't push them out of their tunnels without help.
--:-- Jessica Mendoza: How has this been allowed to happen?
--:-- Ryan Knutson: Where is the Colombian government in all of this?
--:-- Jessica Mendoza: This is happening in Colombia.
--:-- Ryan Knutson: Yeah, well, the Zizine executives who are exasperated by the situation basically say that the Colombian government is AWOL.
--:-- Jessica Mendoza: 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.
--:-- Ryan Knutson: And she acknowledged that this is a terrible situation.
--:-- Jessica Mendoza: But she also said that the demands that the company makes are not realistic.
--:-- Ryan Knutson: The conflict between Xi Jinping and the Colombian government is next.
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--:-- Ryan Knutson: Zijin executives say their underground war against the Gulf Klan worsened after 2022, when a new party took control of Colombia's government.
--:-- Jessica Mendoza: Past governments by and large welcomed foreign mining companies like Zijin, and they took a harsh stance against groups like the Gulf Klan.
--:-- Ryan Knutson: But the new administration, led by President Gustavo Petro, has taken a different approach.
--:-- Jessica Mendoza: Since coming to power, the Petro administration's method of dealing with criminal and drug trafficking groups has been to avoid direct conflict.
--:-- Ryan Knutson: They prefer to try to engage armed groups in conversations, in dialogue.
--:-- Jessica Mendoza: They have offered the possibility of peace talks to some of these organizations.
--:-- Ryan Knutson: 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.
--:-- Jessica Mendoza: And they have also expanded across Colombia in the last two years, according to the state's own figures.
--:-- Ryan Knutson: Zijin has urged the Colombian government to take action against the Gulf Klan by cutting off supplies to illegal miners and closing off routes used by criminals stealing Zijin gold.
--:-- Jessica Mendoza: But Zijin's CEO told Juan that he hasn't seen much will from the Petro administration to help the company.
--:-- Ryan Knutson: And so, last July, Zijin sued the Colombian government.
--:-- Jessica Mendoza: The situation is so serious for Zizine Meini that they have filed a $430 million lawsuit at the World Bank's International Center for the Settlement of Investment Disputes.
--:-- Ryan Knutson: And they allege that Colombian authorities simply aren't doing their job.
--:-- Jessica Mendoza: This has not caused any joy in the Colombian government.
--:-- Ryan Knutson: 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.
--:-- Jessica Mendoza: What does the company hope to get out of this lawsuit?
--:-- Ryan Knutson: I think that the company wants the Colombian government to act.
--:-- Jessica Mendoza: And they are hoping that the Colombian government does change its policies and does take you know this armed group on.
--:-- Ryan Knutson: Colombia's government says that Zijin bought the mine knowing that illegal extraction of gold was taking place.
--:-- Jessica Mendoza: 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.
--:-- Ryan Knutson: Other officials have suggested that Zijin give up some of its mine holdings to trespassers in a bid for peace.
--:-- Jessica Mendoza: Colombia's government says that the fight for Zijin's mines is a symptom of a bigger problem, that many Colombians have to resort to illegal work to get by.
--:-- Ryan Knutson: To address that issue, the government says it needs to transform the economy of places like Buritica so that citizens have a choice of better jobs.
--:-- Jessica Mendoza: One way to do that is to open up a path for illegal miners to legalize their operations.
--:-- Ryan Knutson: On his trip to Buritica, Juan visited one mine that could potentially go down this path, La Centena.
--:-- Jessica Mendoza: A handful of illegal miners run a small operation there.
--:-- Ryan Knutson: This mine is a lot different than Zijin's.
--:-- Jessica Mendoza: It's full of narrow corridors that burrow about 200 yards into the mountainside.
--:-- Ryan Knutson: The ground is flooded with muddy water.
--:-- Jessica Mendoza: But at the end of the tunnel, above their heads, the ceiling glimmers.
--:-- Ryan Knutson: One miner, Andres Rave, points to a vein of gold, running his fingers over the minerals.
--:-- Jessica Mendoza: They get to work extracting the gold.
--:-- Ryan Knutson: Among the people working this mine is Eric Dubier, the miner you heard from earlier, who's worked in the illicit tunnels that break into Zijin's mine.
--:-- Jessica Mendoza: Eric says working these smaller mines is also dangerous.
--:-- Ryan Knutson: The miners try to make them as safe as they can, using wood beams to support the ceiling above them.
--:-- Jessica Mendoza: But here, if an accident happens, they don't get any protection or insurance.
--:-- Ryan Knutson: They're on their own.
--:-- Jessica Mendoza: Eric and the other miners want the government to recognize and legitimize their mining, so they're no longer operating illegally.
--:-- Ryan Knutson: President Petro has signaled that he wants to give out more licenses and help to miners, but has not made any big changes.
--:-- Jessica Mendoza: La Santana has also caught up in the Zizhin conflict.
--:-- Ryan Knutson: The Chinese company says they have the rights to this land as well, but miners like Eric dispute that claim.
--:-- Jessica Mendoza: So far, the Petro government has continued to stay out of the fight.
--:-- Ryan Knutson: Petro has criticized past governments for handing over concessions to big mining outfits, including Zijhin, and he has talked about how the state needs to support artesanal miners, meaning small-scale miners.
--:-- Jessica Mendoza: 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.
--:-- Ryan Knutson: Not, you know, we're not seeing that happening.
--:-- Jessica Mendoza: So right now, the state really has a lot of critics from many different directions.
--:-- Ryan Knutson: What they do say is that their policy is basically to try to provide a new kind of economy for the people of Colombia's rural areas.
--:-- Jessica Mendoza: 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.
--:-- Ryan Knutson: But of course, this is something that would take, you know, decades.
--:-- Jessica Mendoza: But in terms of like actual action, we're not seeing much.
--:-- Ryan Knutson: This episode was updated to include comment from the Gulf Clan.
--:-- Jessica Mendoza: That's all for today, Thursday, January 2nd.
--:-- Ryan Knutson: The Journal is a co-production of Spotify and The Wall Street Journal.
--:-- Jessica Mendoza: If you like our show, follow us wherever you get your podcasts.
--:-- Ryan Knutson: We're out every weekday afternoon.
--:-- Jessica Mendoza: Thanks for listening and Happy New Year.
--:-- Ryan Knutson: We'll see you tomorrow.
