That’s according to a recent investigative report published by Reuters, sourced from The Ethical Corporation magazine. Renewed calls for stronger industry oversight and responsible sourcing standards have followed as the high price of gold encourages illegal mining, particularly in vulnerable regions in South America and Africa.
Gold prices have risen by more than 120 per cent over the past five years, driven by geopolitical instability and trade disruptions, straining the jewellery trade. Elsewhere, environmental campaigners warn that higher prices are increasing incentives for mining in ecologically sensitive regions, including the Amazon Basin and West Africa.
Between 2001 and 2019, gold mining caused more deforestation than any other mineral, affecting tropical and boreal forests worldwide. Andres Santana, senior manager for combating illegal deforestation at Amazon Conservation, told reporters that higher prices increase the potential returns from extracting gold in remote and environmentally sensitive areas, placing additional pressure on forests and local communities.
Illegal mining also presents significant supply-chain challenges. Gold can be repeatedly melted and reprocessed, making its origin difficult to establish. This allows illegally sourced material to enter legitimate markets. Campaigners warn that some gold from artisanal and small-scale mining operations is misrepresented as recycled material.
The issue is particularly pronounced in Ghana, where illegal mining has damaged forests, polluted waterways, and threatened agricultural livelihoods. Despite legislative changes and the establishment of a national Gold Board to combat smuggling, conservation groups say illegal mining remains widespread.
Similar concerns are emerging across the Amazon. The Amazon Mining Watch Panorama report estimated that approximately 6,000 hectares of new mining-related deforestation occurred across the Amazon Basin in the final quarter of 2025, much of it associated with gold extraction.
A recent report suggested that for more criminal networks, illegal gold mining has become a more profitable industry than cocaine manufacturing and distribution.
Industry initiatives are seeking to improve transparency. The World Gold Council (WGC) promotes its Responsible Gold Mining Principles, while its Gold Bar Integrity programme, developed with the London Bullion Market Association (LBMA), uses blockchain technology to digitally trace gold through global supply chains. The LBMA is currently in the midst of a critical court case involving accountability for responsible sourcing.
The programme covers approximately 90 per cent of industrially mined gold, excluding Russian production under sanctions. However, coverage of artisanal and small-scale mining remains limited, even though the sector accounts for up to 20 per cent of global gold production.
Campaigners argue that stronger traceability requirements must be paired with measures that address the economic pressures driving illegal mining. These include better access to finance, alternative livelihoods, training and greater benefits for local communities.
The WGC acknowledges that governments have primary responsibility for enforcement, but says industry and civil society can help establish formal pathways for legitimate small-scale mining to access international markets.
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