Q COSTARICA — The Costa Rican College of Geologists says there are an estimated seven million ounces of gold deposits in Costa Rica: 2 million in Crucitas, while in Cerro Conchudital, they estimate there are 5 million.
That’s a staggering sum—around US$31.64 billion. But due to the limited police presence in these areas, a lot of it is being taken by outsiders.
What began as a trickle of small-scale prospectors years ago has escalated into a high-stakes environmental crisis in Costa Rica’s northern region, particularly around the Crucitas area near the Nicaraguan border.
The story is familiar: abandoned open-pit mines, left behind after a large Canadian mining project, Calgary-based Infinito Gold, was canceled in 2010, have become magnets for illegal miners.
In November 2010, the Costa Rican Legislative Assembly unanimously banned all open-pit metal mining across the country. However, armed with mercury and heavy machinery, these “coligalleros”—as they’re known locally—have moved in by the hundreds. They dig through the earth day and night, driven by promises of quick cash and the lure of rising gold prices on the global market.
For now, the gold rush shows little sign of slowing. And with every ounce of gold smuggled out, Costa Rica’s “pura vida” promise looks a little more fragile.
Costa Rica is scrambling to respond.
Hopefully, it shouldn’t matter which political party someone belongs to—a good idea is a good idea, no matter where it comes from.
Such as the very interesting proposal by Partido Liberación Nacional (PLN) legislator Diana Murillo for the “tokenización”, the issuing of “tokens” (digital certificates) for Crucitas and Conchudita. This process would convert the value of the untapped gold reserves into digital certificates.
If there are 7 million ounces of gold, 7 million digital certificates (tokens) are issued; each ounce of gold equals one certificate.
Individuals or investors who purchase a certificate know it is backed by Costa Rican gold. This eliminates the need to extract gold from the ground, because what is consumed is certified, not physical gold.
The legislator believes her proposal has several advantages:
- It’s faster than holding an international bidding process to bring in a mining company. See here her video
- It’s a 100% environmentally friendly idea because, since the gold isn’t extracted, there’s no need to alter the area’s environment.
- Costa Rica wouldn’t have to share the profits from the sale of the gold (certificates) with anyone. With a mining company, a percentage would have to be negotiated.
Murillo argues that the government’s proposal to fast-track new open-pit gold mining concessions in the Crucitas region takes 8–10 years to initiate mining operations, allowing illegal activities, dangerous criminal networks, and environmental degradation (such as mercury and cyanide pollution) to continue unchecked.
Unfortunately, Chavismo (Rodrigo Chaves and Laura Fernández) opposes legislator Murillo’s proposal based on Brazil’s pioneering of gold tokenization, using blockchain technology to track and tokenize its domestic gold supply chain.