Puerto Maldonado in Peru’s Madre de Dios province feels like a border town. Dusty streets, dilapidated buildings, new buildings and the bustle of people who want to make it. Buses take tourists around the city to the many ecotourism companies that bring people from all over the world to experience the Amazon. Puerto Maldonado sits on the banks of the Tambopata River, a tributary of the Amazon. The Tambopata River gained some notoriety in ecotourism circles when the clay-licking macaws were featured on the cover of the January 1994 issue of National Geographic. Since then the industry has been booming.
Typically, tourists are rushed to boats on the Tambopata and make their way to private ecotourism lodges. Some of these are partnerships with local indigenous groups, while others are direct owners of private land on the banks of the river. As you walk the streets of Puerto Maldonado, you’ll see streets with that frontier feel… and you’ll find many gold buyers and related shops. The gold trade is flourishing and everything is of the worst origin.
This is not the gold trading of public miners. This is not the gold trading of private responsible companies. This is probably not Peter Schiff’s gold trade. This is the informal and illegal gold trade. This is the price reacting trade. This is the trade that abuses the destitute and empowers criminal syndicates and organizations. This is the trade of the underworld. This city of less than 100,000 people is largely a tale of two opposing worlds. Ecotourism depends on a healthy ecosystem and the gold trade wiping out the forest entirely.
Interestingly, the ecotourism boom led to increased protection upstream from Puerto Maldonado by ecotourism lodges reserving land on private reserves and concessions on indigenous land. This created a buffer zone between Tambopata National Park and Bahuaja Sonene National Park. I’ve been visiting this part of the Amazon every year for over a decade, and the changes are evident in the increase in wildlife sightings along the way. To get deep into the forest, you have to continue upstream from Puerto Maldonado for about six hours. There is a government checkpoint where the Malinovsky River meets the Tambopata River.
This “fork in the road” speaks to the two very different realities of this part of the Amazon. Following the Tambopata River from the Malinowski Checkpoint allows you to experience some of the most pristine and dynamic parts of the Amazon Basin. You are entering one of the most biologically diverse places on earth; The variety speaks for itself. The diversity of plants is so intense that it is difficult to understand. The dynamism of the river is a wonder.
On the one hand it is destructive as it eats away a bank of the river where old trees are felled into the fast moving water with the decay of the river bank. The far shore is built up where the flow slows with silt and sand from the nearby Andes. The silt brought down from the Andes also means that these tributaries of the Amazon carried gold dust down from the mountains. The Puno Highlands can be seen from this part of the Amazon, and on a clear day the snow-capped peaks contrast with the green carpet of forest. It’s truly breathtaking scenery and a sensory experience.
While the new banks are being built, life is immediately colonized. The ecological succession begins with grasses and small, fast-growing plants, followed by light tree species. Diversity increases over time. As you travel upstream, you constantly see forest in various stages of succession on one bank and old-growth, diverse forest on the other. The dynamic is obvious. The river will intertwine as islands form and oxbow lakes form as the river changes course. The lakes survive until they turn into swamps and then into forests. This dynamic means that there are different habitats that add to the diversity found.
Tourists come to experience the depths of nature in the “lungs of the earth”. They come to see the different species of macaws and parrots that gather at the clay licks to eat clay. They hope to spot a jaguar and see a harpy eagle. They are often shocked when they hear the red howler monkeys. They are impressed by the agility of the spider monkeys. They are paralyzed with fear as a group of 40 white-lipped peccaries zoom past them while stuck in waist-deep mud. It’s not for everyone, but there is something special about visiting this part of the Amazon. These experiences, as well as the ecological functioning of the forest, depend on a healthy, pristine forest in which the river can function. But the river’s past course has caused much of this forest to grow in gold dusty silt.
If you take the other fork in the road at the Malinowski checkpoint, a very different reality awaits you. Following the Malinowski River will eventually lead you to the informal and illegal mining operations that have ravaged this part of the Amazon. The strait that connects the Pacific and the Atlantic and connects Peru to Brazil via the Amazon, Interoceanica Sur, runs parallel to the Malinowski. It was along this highway that the miners originally started their work. These operations then expanded south towards the Malinovsky River. This isn’t the only area of devastation. A quick Google Maps or Google Earth search of the Interoceanica Sur near Malinowski and you can see the gold mining results for yourself (use these coordinates: -12.8657205, -69.9867795). Remember that this photo was taken in the past; now it’s worse. It’s hard to overstate the hellscape generated. forest to inert dirt. It is the total annihilation of the forest. It’s the complete destruction of the probability of a forest. It transforms pristine forest into pools of heavy metal contaminated water and dunes of sand and silt. There is no way for life. Curiously, the satellite imagery reveals the beauty of the colorful pools in the sand left behind. Even total destruction can have its beauty.
Mercury is used to amalgamate the gold dust. When it rains, some of the mercury enters the rivers, where it bioaccumulates and then biomagnifies in the food chain. It is estimated that over 3,000 tons of mercury have leaked into the rivers of the Peruvian Amazon over the past two decades. This 2013 study showed that 95% of people in rural, mostly indigenous communities in Madre de Dios had elevated mercury levels above what is considered healthy. Dependence on fishing is the likely cause, with studies showing that most fish species have elevated levels of mercury. Even in the city of Puerto Maldonado, three out of four residents have elevated mercury levels, with many exceeding the recommended limit.
Heavy metal poisoning is not the only fatality in the illegal gold trade. The goldfields are ripe for sex trafficking, child rape and the exploitation of rural poor. For more details on both the environmental and human costs, it is worth reading Tomas Munita’s article in the New York Times“Peru is making efforts to drive out illegal gold mining and save precious land.”
How does bitcoin fix this? Illegal gold reacts to price. Any erosion of gold’s monetary premium will have an immediate impact on the destruction of the Amazon. As the price of gold rises, the destruction will intensify. If the price of gold falls as bitcoin consumes gold’s monetary premium as investors recognize it as improved money and a store of value, the illegal gold miners will scale back operations. These operators do not produce gold at a loss. The Peruvian government has proved unable – or, more accurately, unwilling – to solve this problem. Fortunately, for the first time ever, there is a market solution to the problem of illegal gold mining. That solution is Bitcoin.
This is a guest post by Gilles Buck. The opinions expressed are solely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.