History of Gold and Silver Mining in Latin America (2022)

The gold and silver industries in Latin America takes full shape when the Spanish and Portuguese began colonizing the 15th and 16th Century. Before the Europeans arrived, the Native American empires like the Aztec and Inca extracted gold and silver and used it to make jewelry, ornaments, goods, and so on. Overall, the natives did not use the precious metals as currency, but the Europeans did. They also used these precious metals as gifts and as a sign of social status, which attracted European colonizers and conquerors, especially those from Spain. One of the main driving forces for Spanish and Portuguese colonization of Latin America was the desire for gold and silver. When Christopher Columbus explored and conquered the West Indies, gold, slaves, and other goods were sent back to Spain to prove that the newly discovered New World was worth the time, effort, and investment in further exploration and conquests. However, the islands of the Caribbean did not yield many precious metals, so the islands were soon established to grow cash crops, especially sugar. Over time further Spanish exploration of the mainland took place due to reasons like government assignments and rumors of cities made of gold. Rumors like this led to Hernando Cortes’ conquest of the Aztec Empire in Mexico and Francisco Pizarro’s conquest of the Incan Empire in the Andes Mountains. In Mexico, the Aztecs mistook Cortes to be a returning deity, and they gave him and his men gifts, such as gold. This led the Spanish to ally with several of the Aztecs’ enemies and arch on the Aztec of capital of Tenochtitlan. The Spanish were allowed to enter the city, and they were welcomed by the Aztec emperor and upper class. However, they soon took Emperor Moctezuma II hostage and made him a puppet ruler. The population would rise up after many members of the Aztec nobility were massacred during a religious festival. The Spanish tried to make Moctezuma II to calm the people but, according to legend, they killed him with projectiles, and the Spanish were forced to flee the city. They attempted to do this under the cover of night to avoid being killed, but the Aztecs discovered and attacked them. The Spanish who were weighted down by extra loot and treasure were routed and many drowned while crossing the lake. The Spanish would recover and return to Tenochtitlan, but they found that the city was infected with a plague that the Europeans had brought with them from Europe. Despite being infected and weakened, the Aztecs attempted to defend the capital street by street, but the Spanish were eventually victorious. After this and further conquest in Mexico, Spain would set up the Viceroyalty of New Spain and establish its capital over the old Aztec capital and renamed it Mexico City. Francisco Pizarro would also hear rumors of rich native cities established in the Andes, and he would obtain royal permission to conquer Peru. Pizarro followed a similar strategy to Cortes by capturing the Incan emperor Atahualpa, who would soon be killed by Pizarro’s men. Soon the Inca would be conquered, and their gold and silver would be seized. Once the Spanish conquered other areas of Latin America and consolidated their power over areas they already conquered, Spain began exploiting the gold and silver deposits that were located in its new colonies. However, colonial mining produced far more silver than gold, and colonial mining would not focus on other materials like lead and copper because they could be acquired in Europe at lower costs. The only exception to this tendency was mercury, and mercury was an essential part of the refinement of gold and silver in the late 16th Century. Amalgamation is an important process in the production of gold and silver because it would separate the gold and/or silver that was chemically bonded to the ground rock.

Overall there were not many deposits of mercury available. At the time Spain only had two main sources of mercury. One was in Peru at Huancavelica, and the other was in Spain at Almaden. The gold deposits that the Spanish located were in the Caribbean, Mexico, and the Andes, especially in New Granada, which is mostly present-day Columbia. Gold deposits were also located by the Portuguese in every corner of Brazil, such as Sao Paulo, Bahia, and Pernambuco. As previously stated, only a minor amount of gold was discovered in comparison to silver. The Spanish had simply learned about gold and silver deposits from the natives, and this knowledge led the Spanish to find more deposits like the ones at Porco in southwestern Bolivia in 1538 and Potosi in 1545. Potosi is still known to this day to be the largest deposit of silver in the world. Overall, the main silver deposits have been discovered by 1600 and most have remained active up to the early 21st Century. Most of these deposits were discovered in present-day Peru, Bolivia, and Mexico. However, very little silver was found in Brazil, but it did make up for it in diamonds. As previously stated, the amalgamation of gold and silver is completely reliant on mercury, and Spain only had two main sources, When Huancavelica had issues maintaining production in the mid-1600s and late-1700s, the Spanish had to purchase mercury from the area of present-day Slovenia. Spain also cut mercury prices in some areas, especially Mexico, to encourage the increased production of silver. However, this was not possible in all silver producing areas because it was not economically sound and production difficulties at Huancavelica. However, more mercury deposits were discovered in Mexico after most of Latin America, including Mexico, had declared independence from Spain after the Napoleonic Wars. These sites would play an important role to the recovery of silver production in new Latin American nations. (Clawson and Tillman, 2018) History of Gold and Silver Mining in Latin America (1)

History of Gold and Silver Mining in Latin America (2)

History of Gold and Silver Mining in Latin America (3)

Once these major deposits were discovered, they had to be excavated and the metals had to be refined. Almost all manual laborers in excavating and refining were Native Americans, Mine owners would rely on indigenous draft labor, and curacas or local chiefs would supply the laborers who were compelled by the mine owners to provide a determined number of men from each village. In the early decades of European colonization, natives in the encomienda system were sent to the mines by their masters, but the dominant source of labor came from labor drafts and wage labor. The Aztecs and Incas used draft labor, which made it easier for the Spanish to forced labor from native communities. The most notorious draft was the mita of Potosi, which was established in the 1570s by Viceroy Francisco de Toledo, and it brought over 13,000 men to work at Potosi in its early years. A mita for Huancavelica was also established as well. The drafts in Mexico were called repartimiento. In both cases, the workers would be paid a small wage, but it was barely sufficient for the worker alone. The wage was nowhere near enough to provide for a family. However, these drafts proved ineffective over time. Due to this mine and refiner owners began hiring individual natives and their wages as hired workers were up to five times higher than those of draftees. Using this type of labor also gave the employers a stable source of labor, and the employees were able to learn more skills compared to draftees. By the 1600s, most of the workers in the mines and refineries had wages. An example of this can be seen in Mexico where the total labor force in the silver mines consisted of 68% salaried workers, 18% draftees, and 14% African slaves. By the 1800s the labor drafts would become very rare, if not extinct, in Mexico and the Andes. When the number of the indigenous workers began to dwindle due to disease, African slaves were imported to work in the mines and refineries. This was sometimes encouraged by subsides on the import of slaves. However, the slaves did not fare so well in the Andes compared to slaves in Mexico due to the elevation and climates. By 1700, Mexico was ahead of the Andes in production because several significant mines like San Luis Potosi flourished. However, Potosi experienced a revival that would last for several decades during the mid-18th Century, but production levels would never get close to their all-time peaks, which occurred in the late-16th Century. The causes of his revival included low labor costs, and a tax cut in 1736 from the Quinto real that the crown levied on Andean silver. There was also an increased rate of production from mine sin present-day Peru during the late 1770s. This was caused by an increased demand for silver in Peru after the Audiencia of Charcos where Potosi and Oruro were reassigned to the new Viceroyalty of the Rio de la Plata in 1776. Due to this silver would now flow through Buenos Aires, and the merchants in Lima found themselves in a financial squeeze. Due to this they began to invest heavily in Peruvian sources of silver. Both Mexico and the Andes would benefit in the 18th Century from the steady growth of mercury production ay Almaden after the discovery of new deposits. This helped offset the faltering mercury production at Huancavelica. After 1770, both Mexico and the Andes responded well to government policies designed to stimulate mining, which included tax cuts, lower mercury prices, the creation of mining colleges, the dispatch of European experts to update production practices, and awards of titles of nobility to successful miners. The discovery of gold in Brazil led to huge increases in population in areas engaged in gold production. These people consisted of miners, wealthy landowners with slaves, merchants and small business owners, and so on. Initially, miners used primitive mining practices like working the gold-bearing gravels and course sands found at river beds. Miners used these simple techniques because it was simple to concentrate the gold particles at the panner using water from the river. The course sand was then removed at the same place of the washing process, but the recovery of fine fold required better techniques, mixing water with some fruit juice, and precipitating the gold in suspension. The final concentration was done in small pans made of copper, or through amalgamation, followed by the separation of the metals by volatization. Smuggling took place via various routes to the coast, mainly to Bahia. The official production was being shipped to Rio de Janeiro. The leading gold producer in Brazil was always Minas Gerais. The foundry houses there would receive the gold in powder form, weighed it, separated the Quinto for the crown, smelted the remaining portion in kilns, eliminated the impurities, and molded it into bars, which were then weighed and registered. (Clawson and Tillman, 2018)

Even today, Latin America plays a vital role in the production of gold and silver. Latin America produces around 50% of the world’s silver and 20% of the world’s gold. The modern day search for gold cannot be ignored, especially since the region has been a major beneficiary of the 2000s gold bull. This was partly due to the new discoveries of deposits made by large mining companies that set up operations in the region. The top three producers of gold in Latin America are Peru, Brazil, and Chile. Since 2001, these countries saw their gold production increase by 21%. Billions of dollars in mining investments have been pumped into Peru, which is the second largest producer of silver, the sixth largest producer of gold, and the third largest recipient of foreign mining investment. Peru produces around 155 metric tons of gold annually. In Peru, the labor is abundant and trainable. However, there are shortages of highly skilled workers in some aspects of the mining industry. Mining companies plan to solve this problem by hiring foreign skilled labor, but they also have to follow Peruvian law that dictates that only 20% of these companies’ workforces can be non-Peruvian. Chile is the world’s second largest producer of gold, and it also receives foreign investment in infrastructure and mining projects. Building a quality network of infrastructure is crucial to mining operations in Chile due to the nation’s mountainous areas and the fact that many of the country’s precious metal and mineral deposits are located in the Atacama Desert, which is the driest desert in the world. Chile’s mining and environmental regulations are well defined, and the government is working on sustainable development. The system of taxation is also stable, but there is pressure on the Chilean government to raise corporate tax rates. As previously stated, silver is still produced in vast quantities. Most of the world’s largest producers of silver are in Latin America, and they include Peru, Mexico, and Chile. Peru and Mexico alone control 1/3 of the global production of silver. Peru produces 111.6 million ounces of silver. Mexico produces 96.4 million ounces of silver. Chile produces 51.5 million ounces of silver. From 2005-2006, the global production of silver began to stagnate, but many of the few countries that experienced growth are in Latin America. They include Peru at 8.7%, Mexico at 4.5%, Chile at 14.4% and Bolivia at 9.5%.

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There are several environmental and health issues that came with the production of gold and silver. Early on, amalgamation of gold and silver with mercury has been a method used to purify both precious metals. However, mercury is a toxic liquid metal, and it was released into the environment during the process. The mercury would also cause negative health effects on the miners’ and refiners’ health. Mining would create more adverse effects when it became more established and industrialized. Currently, the production of gold and silver requires heavy machinery and vast amount of water and this can lead to the destruction of local farmlands and habitats. Currently, the precious metals in the hard rock are chemically bound to the ground rock. They are separated by crushing the ore into powder then mix it with sodium cyanide to chemically separate the gold and silver from the rocks it is bound to. This process is called cyanidation, and it is controversial because of the highly toxic nature of cyanide. However, cyanide is degradable and does not build up in animals or people as it moves through the food chain. However, smaller, sometimes illegal, operations still use amalgamation and mercury to produce and refine gold and silver. Worldwide, these operations can release up to 1,400 metric tons of mercury. Two-thirds of this finds its way into the nearby soil and water, and the other third is released into the atmosphere. This can affect people who are far away from the operation itself. During the operation and process of amalgamation, excess mercury is washed into nearby waterways. The elemental form of mercury is relatively inert, but in an aquatic environment it is take up by bacteria and algae and is converted into methyl mercury, which is far more dangerous. Methyl mercury would travel up the food chain from algae to plankton to small fish to larger fish, and it becomes more concentrated. When mercury contaminated fish are consumed by humans, the mercury remains in the body bound to proteins. Mercury can cause major health problems like birth defects on a fetus, particularly those affecting the nervous system, and neurologic damage and autoimmune disorders in children and adults. During the process of amalgamation, mercury vapor is released. Today in smaller operations, amalgamation is done in shops and houses in towns, and the surrounding inhabitants will be directly exposed to mercury vapor. Due to the gaseous form, the mercury, when inhaled, has more direct access to the brain and other bodily systems. This can impair vision, hearing and balance, and it can sometimes cause coma and death. It can also damage the kidneys to the point where dialysis or even kidney transplants are required. Another concern is the tradition that the work of heating amalgam is best done by women, many of whom have children with them or are pregnant. In recent studies of several towns in Columbia, the worst mercury pollution ever recorded was discovered with mercury levels over 1,000 times higher than the limits imposed by the World Health Organization. Further studies also show many cases of mercury poisoning, and there is evidence of chronic mercury toxicity in many local children. They had decreases inattention, language, memory, and executive function. Similar health impacts can be seen with other areas of Latin America, such as in boom towns in Peru. The best way to counter mercury pollution is with education of the true risk of the toxic liquid metal, the restriction of the mercury trade, and national regulations. With these it is hoped that these small operations will turn to environmentally safer alternatives such as cyanide. Large scale mining also causes issues like erosion, deforestation, chemical runoff, polluting nearby rivers and streams that affect the pH of the water, sedimentation, the destruction of ecosystems, and so on.

In conclusion, many Latin American nations were originally conquered from Native American empires, kingdoms, and/or tribes and/or colonized by Portugal and almost entirely Spain. The European powers were attracted to the region by rumors of golden cities and lands filled with riches. They found this to be true to a certain extent because their colonies yielded vast amounts of gold and silver. Even today these areas like Peru, Mexico, Brazil, and Chile are still yielding gold and silver. However, with these centuries of mining and amalgamation, it has affected the environment in a negative sense. Large scale mining causes environmental devastation and chemical runoff causes health issues in the local human and animal populations and overall habitats.


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