PUERTO MALDONADO, Peru — Boriam Valera has seen his future. It shimmers and sells for more than $1,100 an ounce.

The tousled 30-year-old works a homemade gold-mining dredge along the banks of the Tambopata River, a tributary of the Amazon, keeping watch over a sluice box that catches gold flecks in the slurry sucked up from the river bottom.

The price of gold has increased 50 percent in the past two years and tripled in the past five, as global investors look to hedge against a falling dollar. Gold hit historic highs this month. That surge has spurred a new Amazon gold rush, with illegal miners pouring into the region and setting up camp along riverbanks, highways and footpaths reaching deep into the rain forest of the Peruvian Amazon.

The influx threatens to overwhelm the region, home to some of the Amazon’s most valuable nature reserves, several indigenous groups thought to have had no outside contact, and more bird and butterfly species than anywhere else on the planet.

Giant swaths of forest are gone, rivers have been diverted and mercury used to separate gold from sediment has begun to poison downstream communities. Mining has turned an area the size of Washington, D.C., into muddy wasteland and threatens an area at least 10 times that large.

Illegal mining

Perhaps nowhere else in the Amazon is the clash between mining’s economic promise and its environmental and health threats more stark than in the state of Madre de Dios, where more than 30,000 people depend on the industry to make a living and at least 95 percent of miners operate illegally. Peru is the world’s fifth-largest gold producer, and the government estimates 40 percent of that gold is illegally mined.

The government stopped issuing permits this year, in an effort to slow the flow of men, machines and mercury into the frontier state, but they keep coming.

Peru’s environment minister, Antonio Brack Egg, has suspended new concessions to mining companies. Late last month, he came to Puerto Maldonado to propose creating mining-exclusion zones that would cover 90 percent of the region, eliminating all dredge mining because of mercury-related health concerns and regulating mercury sales more tightly.

“We’ll enforce our laws by whatever means are necessary,” he said in Lima before his visit, “even if we have to bring in the army to do it.”

The gold-mining industry is literally burying the shantytown of Huepetuhe, as silt dredged upstream from the ever-widening riverbed washes into the town, creeping higher and higher with each rainy season.

It has consumed the first floor of many of the rickety brothels that front the river, with the tops of door frames peeking up just above the ground, as if to testify to what has sunk in the sludge.

Once a camp for miners such as Valera, Huepetuhe sprung up along the river’s edge about 30 years ago, when word first spread through poor Andean communities that beneath the dense jungle, the Amazon’s soil was flecked with gold.

After several decades of growth, gold is now mined with earthmovers and other heavy equipment, and miners “wash” the naked land with pressure hoses until it erodes into landslides of sludge. The surrounding area appears in satellite photos as a sprawling white scar, running south along a ruined river.

Few riches for residents

The community perched atop these riches sees little of them; there is little government presence, no sewage system and sporadic electricity. There are a few, dim streetlights; after dark, much of the light comes from mining lights, powered by diesel generators, twinkling across the valley.

“This is where the airport used to be,” said resident Liliana Ojeta, 26, as she stood at the edge of an eroding plateau. The family that controlled the land opened it to mining about three years ago, about the time that gold prices began to climb in earnest. Pressure hoses ate away at the runway; all that remains is a shuttered building that appears to have once served as a terminal.

Valera’s small homemade river dredge is benign in comparison with operations at Huepetuhe, but that does not mean it will always be that way.

“Imagine Boriam finds a good spot and makes a lot of money,” said Kurt Holle, owner of Rainforest Expeditions, an ecotourism company with three tourist lodges along the Tambopata River. “His next step is to buy a front-loader” and start chipping away at the river’s edge.

When the park ranger for the neighboring nature reserve warned Valera about mining without a permit last month, Valera shrugged him off. He would just move his dredge a few hours further upstream. Anyway, he said, the daily haul is better up there: up to 20 grams a day.

At about $35 a gram, Valera makes a princely day’s wage, even after he pays his two workers and expenses. Most estimates put the average monthly take-home pay for dredge operators such as Valera at $3,000 to $5,000, tax-free, though he said he makes $7,000. Outside mining, the average monthly wage here is $125.

Lucrative employment

Most are migrants from Peru’s Andean highlands, where arable land is scarce, and jobs more so. For them, the next best employment option may be tending a plot of potatoes.

Mining is “a lot more profitable than selling bubble gum in the street back home,” said Enrique Ortiz, an environmental activist and consultant. “Mining money easily trumps what they might make in a legal and stable job in Puerto Maldonado.”

On rare days off, miners bring their gold nuggets to Puerto Maldonado, the state capital, where some buyers refer to spot gold-price charts from Yahoo Finance on their cellphones to determine a price. Financial analysts predict prices will continue to rise as long as currency devaluation continues, which could be many years.

“This is all we have here now,” said Mauro Javier Gomez, 23, who drives a truck hauling sediment out of the Huepetuhe mines. He was born here; his father migrated down from the Andes.

“This place is a beach. Nothing grows. Gold is the only thing we know how to do.”

This article was reported with the support of a Gatekeeper Editors fellowship from the International Reporting Project.

From BBC News

The high price of gold has drawn thousands of miners to a region of south-east Peru, but deforestation and the high levels of mercury used in mining has led to fears of an imminent ecological disaster, as Dan Collyns reports.

Craters now dot parts of Peru’s rainforest Enlarge Image

It is only from the air that you can see the full extent of the destruction.

The forests seems almost endless until it is abruptly interrupted by the raw colours of sand and earth; rivers torn open and thousands of hectares denuded and pocked with dead, stagnant pools of water.

Alluvial gold mining in Peru’s southern Amazon rainforest has spread, driven by the high price of gold, now more than $1,100 (£680) per ounce, or $36 a gram.

Close to 200 sq kms (77 sq miles) of jungle have been lost in the evocatively named Madre de Dios (Mother of God) region.

“To know what we are losing, this area of Peru – the western Amazon – is the world’s enclave of biological diversity,” says biologist Ernesto Raez, who heads the Environmental Sustainability Centre in Lima’s Cayetano Heredia University.

“Counted in terms of richness of species, this is the place where world records have been obtained for butterflies, birds, amphibians; you name it.”

Over the years, more than 1,500 jungle mining concessions have been granted by the energy and mines ministry, although most did not get final approval.

But the informal sector has grown out of control, and now almost a quarter of the gold produced in the world’s sixth largest producer is illegal.

The vast majority of it comes from Madre de Dios, where local non-government organisations believe there could be up to 30,000 miners.

Wild West-style

Peru’s environment minister, Antonio Brack, says enough is enough.

“If I, as the environment minister, allow the miners to do what they want, within 20 years Madre de Dios will be an ecological disaster the like of which mankind has never seen,” he says.

I’m in favour of mining but it does need to be legitimised Pedro Donayre Delto Uno Mayor

Mr Brack is calling for 80% of Madre de Dios to be closed to miners, illegal or not, and a ban on river dredgers and other heavy machinery used in mining.

But he must tread carefully with the thousands of miners who will fight to protect their livelihoods.

“No one wants a bloodbath,” he says. “Despite the fact that the miners are illegal we are engaged in dialogue with them but that doesn’t mean that the state will allow itself to be pressured by mafias.”

Delta Uno is one of the Wild West-style towns that have grown out of the Amazon gold rush. Swelled with poor migrants from Andean regions, it bustles with commerce and gold traders dot every corner paying $30 a gram.

But there is a dark side to the boom. While young men ride around on shiny motorbikes, many young women and under-age girls lurk in garish bars. Many of them are victims of people-trafficking mafias who use them to entice miners flush with cash.

“Like it or not the economy of our region is based on mining,” says the mayor, Pedro Donayre, a former miner, who no longer wants his town to be on the margins of the law.

“I’m in favour of mining but it does need to be legitimised. The state needs to come here and educate the miners how to extract the gold safely without polluting and help us change rather than demonising what we do.”

‘Good for health’

For every gram of gold extracted, up to three times more mercury is needed. The toxic metal is used to bind with the gold particles, forming an amalgam which makes them easier to extract.

It is cheap and efficient; so cheap that much of the mercury is left in the rivers and lagoons, poisoning the flora and fauna and in turn passing into the food chain.

This gold is the result of 24-hours of heavy work by some 10 people

Peru’s environment ministry estimates there could be up to 40 tonnes of mercury dumped each year.

Many of the miners appear to be cavalier in their use of mercury and its effect on their own health.

One of the older men, nicknamed Viejo Gallinazo, or Old Buzzard, swears by it.

“It’s cured my heart problems,” he says. “It doesn’t pollute, on the contrary, it’s actually good for the health.”

He lives in a makeshift camp on the edge of a football pitch-sized crater full of dead tree trunks and muddy water.

Day and night, diesel-powered generators whir, powering hoses and suction pumps which suck up the earth, spewing mud down carpet-covered ramps that trap the gold particles.

MADRE DE DIOS Illegal mining for more than 30 years 190 sq km deforested by illegal mining 150sq km hectares with pending mining exploration claims 1,200 sq km hectares of forest felled for cattle and agriculture

The workers churn up tonnes of earth in 24-hour shifts, pausing at dawn to wash out the carpets and extract the gold using the mercury.

The heavy work produces around 20 to 25 grams of gold – a small profit for the workers – but it is part of a black market in illegal Peruvian gold worth around $500m, according to experts.

The environment ministry estimates around 50 tankers of petrol and diesel reach the mining zone every day, providing fuel for hundreds of bulldozers and heavy diggers.

Practically, halting the mining, at least in the short term, is impossible. Poverty and lack of opportunity in the highlands continue to force people like Paulino Chavez to seek work in the jungle.

“I earn a pittance but it’s more than I can get in my village,” says the father-of-seven, who earns around $8-a-day. “I know we’re killing the jungle, this land will never be the same.”

There are other factors at work. Climate change in the Andes is already affecting small farming communities, forcing them to adapt or move elsewhere.

The near completion of the Inter-Oceanic Highway, which cuts a swathe straight through this once inaccessible part of the Peruvian Amazon, will lead to migration on an unprecedented scale.

The road, which will link Pacific ports in southern Peru to the Atlantic coast in Brazil, could well become the greatest factor in the environmental degradation of this once pristine pocket of biodiversity.