LONDON (Bywire News) - According to Brazilian police documents, an alleged Italian refiner has been found purchasing gold from an illegally sourced trader situated in the Amazon rainforest region. Further corporate disclosures indicate that the refiner had been supplying gold to four of the world’s largest tech companies.
Amazon, Apple, Microsoft and Google have all named the private firm Chimet through public filings as a source for some of the gold that they use in production. Gold is often used by technology companies to create circuit boards for consumer electronics.
Police documents obtained by Reporter Brasil, an investigative journalism outlet, and reviewed by Brazilian federal police, claimed that Chimet purchased millions of dollars in gold from trader CHM do Brasil, which allegedly acquired the metal from illegal wildcat miners.
Responding to the questions via a lawyer, CHM do Brasil claimed all the gold was legally acquired with the correct documentation.
Since right-wing President Jair Bolosnaro came into power, illegal mining has seen a major surge and he has also allowed wild cat miners to explore legal mining on indigenous land.
Unregulated mining companies pose a serious threat to the environment and biodiversity of one of the most precious ecosystems in the world. They have a history of destroying rainforest land in the Amazon while also polluting rivers with mercury. Everywhere they go they leave trials of death, disease and destruction.
Instituto Escolhas, a Brazilian think tank, estimated that the country had produced 84 tonnes of illegal gold in Bolosanoro’s first two years in office, a significant increase of 23% from the previous year and almost matching Brazil’s total gold output.
Larissa Rodrigues, an author of the Escolhas report said, “a company that is buying gold from Brazil already knows there is a huge risk it is buying irregular gold – Amazon blood gold.”
A representative of the Italian firm, Chimet, claimed that they had cut ties with CHM upon learning of the allegations in October 2021, when the authorities raided nine states with the federal district targeting CHM and other organisations involved in the illegal gold trade.
Police documents highlight that Chimet had allegedly bought 2.1 billion reais ($385 million) worth of gold from CHM dating between 2015 and 2020.
A police spokesperson in Para declined the opportunity to comment on the investigation as it is ongoing and remains under seal. Indictments are likely to be announced when the probe concludes later in the year, he added. The choice of whether to press charges, said the representative, would be down to Federal Prosecutors.
The US tech firms named Chimet among a group of over 100 gold refiners in their supply chains during the investigation’s five-year timeframe.
A company representative, Giovanni Prelazzi, said in a statement that whilst Chimet doesn’t have direct relations with the four tech majors, they sell gold to banks that can resell it for a range of different users. Prelazzi did not name the banks.
Apple didn’t specifically address Chimet. However, in a statement, they made it clear that their policies prohibit the use of illegally mined minerals and that companies who cannot comply are simply removed from their supply chains. Amazon, Google, and Microsoft declined to comment.
Chimet said after learning about the CHM investigation in Brazil, they contracted accounting firm Deloitte to conduct an audit of its suppliers in April 2021 which was then again certified by bullion market association LBMA as meeting responsible gold sourcing requirements.
An LBMA representative told that Chimet’s actions showed they didn’t have similar problems with other suppliers and that they have intensified their verification methods.
Police documents allege that CHM wasn’t registered with Brazil’s central bank as a legally authorised entity to buy and sell gold, known as DTVMs.
CHM didn’t appear in the central bank’s directory of registered DTVMs and it’s illegal for anyone other than miners and their firms to buy and sell gold in Brazil without that registration.
CHM claimed that they don’t buy gold as a financial instrument and that registration isn’t required to buy gold as a commodity.
The central bank claimed they did not regulate "operations with gold classified as a commodity."
A 2020 analysis of relevant laws by federal prosecutors found that registration is required for anyone other than miners to buy and sell gold regardless of usage.
Financial records show CHM bought gold from the cooperative and directly from individuals in the Para that forms part of the Brazilian Amazon.
COOPEROUI, the cooperative has a permit to mine in areas protected by Kayapo indigenous reserves, but police found that CHM and the coop bought from independent miners who didn’t have permits.
COOPEROUI couldn’t be reached for comment.
Police reports said that the cooperative and individual miners are believed to extract ore illegally although they didn’t state the basis for the allegation.
Satellite images of the Kayapo reserve show vast swathes of muddy mining pools and clandestine airstrips that access them.
(Writing by Samba Jallow, editing by Tom Cropper and Klaudia Fior)