DELTA 1, Peru (AP) - A gold rush that accelerated with the onset of the 2008 global recession is compounding the woes of the Amazon basin, laying waste to Peruvian rain forest and spilling tons of toxic mercury into the air and water.
With gold's price soaring globally as the metal became a hedge against financial uncertainty, the army of small-scale miners in the state of Madre de Dios has swelled to some 40,000. The result: Diesel exhaust sullies the air, trees are toppled to get at the sandy, gold-flecked earth and the scars inflicted on the land are visible on satellite photos.
The work is dangerous and produces a fifth of Peru's overall annual yield of roughly 175 metric tons of gold that make this country the world's No. 5 producer. The mining also is almost entirely illegal.
"Extracting an ounce of gold costs from $400 to $500 and the profit is $1,000 per ounce," notes Peru's environment minister, Antonio Brack. In just a decade, gold has more than tripled in value.
The situation in the southeastern state of Madre de Dios, which borders Brazil and Bolivia, is mirrored in dozens of the countries where gold is similarly mined, and where the desperately poor often end up working for the most unsavory of opportunists.
Government controls are mostly futile.
Neighboring Colombia and Ecuador have mounted crackdowns in the past year - Ecuador's military last month dynamited 67 pieces of heavy equipment - but when authorities depart, the diggers troop back and work resumes. In Madre de Dios, the informal production is unrecorded, untaxed and carried out on public lands where claims are awarded by regional officials, many of them grown rich in the process.
As the industry has grown, heavy machinery has moved in bearing Caterpillar, Volvo and other international trademarks into a state the size of Maine or Portugal, whose remotest reaches are believed inhabited by uncontacted Indian tribes.
In February the Peruvian navy dynamited 13 dredges which, working in violation of a government ban, were choking the Madre de Dios river with silt, killing plants and destroying habitats. Protesting laborers blockaded Madre de Dios' only highway, and at least three people were shot and killed by police sent from Lima.
"One of the big hydraulic dredges we destroyed could easily harvest a kilogram (worth about $45,000) of gold a day," said Brack.
Rather than try to evict the thousands of protesting informal miners, the government decided to work to "formalize" their operations, which have denuded well over 180 square kilometers (70 square miles ) of jungle in Madre de Dios.
"In practice, nothing happened. They moved against a small percentage of dredges that are not necessarily what hurts the environment most," said Pavel Cartagena, an environmental activist who recently returned to Puerto Maldonado, the state capital, after death threats drove him away for a year.
Brack said the crackdown served notice to local politicians profiting from the industry.
"We found that nearly all the public officials in Puerto Maldonado were involved," the minister said. "In 2010, the regional mining director had a mining company. His No. 2 had one. His wife had one. His sister had one (as did) the sister of the No. 2. They were all in it. And you think anyone is going to regulate anything?"
The state prides itself on its biodiversity and attracts eco-tourists for its monkeys, macaws and anacondas. Yet its forest is pocked with craters gouged by grime-coated men who tear the earth away with high-pressure water hoses.
And that is only the beginning. To capture the gold flecks, mostly the size of a grain of sand, mercury is used because it is the cheapest, easiest method. It then seeps into the air and rivers, an estimated 35 metric tons a year in Madre de Dios alone, slowly poisoning people, plants, animals and fish, scientific studies show.
Most of the migrant diggers, who have doubled the state's population since the early 1990s, arrive nearly penniless. Some are criminals. Some are preteens sold by their parents into servitude, says Feliciano Coila, a lawyer with state child protection services.
The goal of the most ambitious newcomers is to gather enough gold to graduate from peon to subcontractor, put together a crew of a dozen or so miners, provide equipment and buy access to a claim.
"You need a minimum of 50 grams ($2,200 worth of gold) to be invited into a camp" to work a claim, said Miguel Herrera, a mining organizer. Unskilled new arrivals generally can amass about a gram a day, currently worth more than $40. It is a princely sum for Peruvian highlanders accustomed to $3-a-day wages.
Most prospectors live in a string of jungle boomtowns.
One of the more established is Delta 1, located on the Puquiri River flood plain. It is reached after a precarious canoe crossing of the Inambiri river, then a wide dirt toll road across a white-sand river basin exhausted by mining and looking hit by a tsunami. Delta 1's roughly 6,500 residents lack running water, electricity, sewers and police but have ample machine shops, groceries and brothels.
An older town, Huepetuhe, is flanked by mountains of gravel mine tailings towering over washes that further disfigure a mining wasteland 1.2 miles wide (2 kilometers) and nearly 20 kilometers (more than 10 miles) long.
Huepetuhe, established in the 1980s, just this year got running water but has long had two entire streets of brothels on stilts. They front a brown sea of silt, the accumulated runoff of adjacent mines that is slowly engulfing the red-light district.
Other boomtowns, mostly lawless, gunslinging places that do not even have names, have sprouted alongside the Interoceanic Highway that connects Puerto Maldonado, the capital, to the rest of Peru. When finished this year, it will link the Pacific coast with neighboring Brazil, and attract even more fortune hunters.
Social worker Oscar Guadelupe, whose organization, Huarayo, runs shelters for child miners and teen prostitutes, counts some 2,000 females working in "prostibars" in the mining corridor, a third of them adolescents.
Day and night, the towns are bathed in the eerie glow of blowtorches as welders fix miners' overworked pumps.
Many prospectors say they would be happy to pay taxes and get services. "It's better to pay the state than to keep suffering abuse and insecurity," said Leoncio Jordan Paiba, a 39-year-old miner and father of four.
He says he gathers 12 grams of gold a day but, in addition to paying for workers, equipment and fuel, he must pay the claim's titleholder a weekly 20-gram levy and also keep the area's Amaraukiri Indians happy.
"They say this land is theirs. They come pointing guns," said Jordan. "If you don't pay them they damage your equipment. They've thrown motors into the mud."
As he speaks, three men are hosing a crater's walls with water when one side collapses, nearly burying them alive. They wait a few seconds and resume work.
Such a collapse killed a young digger known only as Martin.
His employers dumped his body in Delta 1, so friends cobbled together a plywood casket, painted it black and set it in the town's dusty central plaza. They lit candles and held a wake, getting drunk on cheap liquor.
DREMH, the regional mining agency, has allowed wildcat prospectors to invade buffer zones adjacent to nature preserves and Indian land, and hands out mining permits without first gaining environmental approval. Meanwhile, Madre de Dios state received less than $20,000 last year in revenue-sharing from taxes on mining.
A DREMH inspector, Manuel Campo, said he is often denied entry into mining camps, although they are on public land.
"The mob arrives and you can't do a thing," he said.
At one mining camp, Ronny Calcina was on break from one of the 24-hour shifts he shares with three other men. After 18 months of backbreaking work, the 34-year-old native of the poor, neighboring highlands province of Puno said he is ready to go back to the family's potato fields.
He thought he would be earning a lot more, he said. Besides, his wife and 3-year-old son, who live in Delta 1, keep getting sick. All have had malaria.
Calcina is worried about being poisoned by mercury, which he is exposed to constantly as it is burned out of the puttylike amalgam it forms when it clings to gold dust.
Additional mercury is burned off in open-air storefronts that buy the gold, including a half dozen opposite the main market of Puerto Maldonado.
"This is an area where most people shop, eat, work. This is the center of life for most of Puerto Maldonado," said Luis Fernandez, a Stanford University environmental scientist who studies the mercury contamination.
Levels he measured inside the shops were 20 to 40 times above World Health Organization standards, and 10 to 20 times above the maximum outside.
"Everyone is being exposed in this area," said Fernandez. "The people working in the shops are getting dosed with enormous amounts of mercury every day."
The U.N. is among organizations working to educate prospectors about the dangers and get them to switch to cleaner technology. But Peru is South America's biggest mercury importer and its sale is unregulated.
Taming Peru's illegal mining juggernaut might be possible if gold sales were regulated, but they have been unfettered since 1991, when the government closed what had been the only authorized gold-purchasing bank during a wave of privatizations.
Peruvian law requires every buyer of gold to produce certification proving it was mined legally. The law is universally flouted, however, and there is no identification system that would allow it to be tracked. So it is impossible to know whether the gold in a chain or ring bought in New York or Paris was refined with mercury.
Organizations such as the U.K.-based Fairtrade Foundation have set standards for certifying suppliers whose gold does minimal environmental damage. Wal-Mart is among several big retailers expressing interest, but production is so far minimal.
In February of last year, Peru's government decreed that all informal mining in Madre de Dios be registered, taxed and regulated. Thousands of prospectors responded by blocking the Panamerican Highway two months later. Some hurled dynamite at police, who responded with bullets, killing six protesters.
The decree was suspended, but Peru's media asked why authorities were not punishing companies that buy gold without certifying its provenance, as required by law. The director of mining in Peru's Ministry of Energy and Mining, Victor Vargas, said authorities were working on identifying the companies involved.
"Various companies have been mentioned. We're collecting evidentiary documents," he told the newspaper El Comercio.
Asked by The Associated Press more than a year later to name the culprits, Vargas demurred.
"Look, when it becomes official, the ministry will do so," he said. "I can't talk about what's still being worked on."
Associated Press writer Gonzalo Solano in Quito, Ecuador, and Martin Villena in Lima, Peru, contributed to this report.