SAO PAULO, July 25 (Reuters) – Brazilian police allege an Italian refiner bought gold from a trader sourcing illegally from the Amazon rainforest region, according to police documents, and government revelations. companies show that the refiner has supplied the precious metal to four of the world‘s largest companies. biggest tech companies.

Public filings by Amazon.com (AMZN.O), Apple (AAPL.O), Microsoft (MSFT.O) and Google-parent Alphabet (GOOGL.O) name private Italian company Chimet as a source of gold used in their products. Tech companies often use small amounts of metal in circuit boards for consumer electronics.

According to police documents obtained by investigative journalism group Reporter Brasil and reviewed by Reuters, Brazilian federal police accused Chimet of buying millions of dollars worth of gold from trader CHM do Brasil, who allegedly illegally acquired the precious metal from wild miners.

CHM do Brasil, responding to questions through a lawyer, said all of its gold was acquired legally with proper documentation.

Illegal mining has exploded in Brazil since right-wing President Jair Bolsonaro took office in 2019, championing wildcatters and seeking to legalize mining on indigenous lands.

Unregulated mines have destroyed rainforest lands in the Amazon while polluting rivers with deadly mercury. The miners clashed violently with the native tribes protecting their land, leaving a trail of death, disease and intimidation. Read more

Brazilian sustainability think tank Instituto Escol estimated that the country produced 84 tonnes of illegal gold in Bolsonaro’s first two years in power, up 23% from the previous two years and equivalent to nearly half of Brazil’s total gold production.

“A company that buys gold in Brazil already knows that there is a huge risk that it is buying irregular gold – blood gold from Amazon,” said Larissa Rodrigues, author of the Escolhas report. .

A Chimet representative said the company severed ties with CHM after learning of the allegations in October 2021, when police carried out raids in nine Brazilian states and the Federal District targeting CHM and others allegedly involved in the illegal gold trade.

A police document summarizing the investigation dated August 2021 indicates that Chimet allegedly purchased 2.1 billion reais ($385 million) worth of gold from the CHM between 2015 and 2020.

A Para State Federal Police spokesperson declined to comment on the investigation as it is ongoing and remains under seal. Indictments will likely be announced when the investigation concludes later this year, he said.

Federal prosecutors would then have to decide whether or not to press charges, he added.

The four U.S. tech companies listed Chimet among more than 100 gold refiners in their supply chains during the five-year survey period and in the latest 2021 disclosures.

Chimet does not have a direct relationship with the four tech majors, but sells gold to banks which can resell it for various uses, company representative Giovanni Prelazzi said in a statement to Reuters. He did not name the banks.

Apple did not specifically address Chimet but said in a statement that its policies prohibit the use of illegally mined minerals. Companies that cannot comply are removed from its supply chain, the iPhone maker said.

Amazon, Alphabet and Microsoft declined to comment.

Chimet said that after learning of the CHM investigation in Brazil, it hired accounting firm Deloitte to audit its other suppliers and in April 2022 it was again certified by the association. of the LBMA bullion market as meeting responsible gold sourcing standards.

An LBMA representative told Reuters that Chimet’s actions showed similar problems did not exist with other suppliers and that verification methods were tightened.

NOT REGISTERED

Police documents allege that CHM was not registered with Brazil’s central bank as an entity legally authorized to buy and sell gold, known as DTVM.

The CHM does not appear in the central bank’s online directory of registered DTVMs. It is illegal for anyone other than miners and their associations to buy and sell gold in Brazil without such registration.

CHM said it does not buy gold as a financial instrument and registration is not required to buy gold as a commodity.

The central bank said it does not regulate “operations with gold classified as a commodity”.

A 2020 analysis of relevant laws by federal prosecutors found that such registration is required for anyone other than minors to buy and sell gold, regardless of its use.

Financial records of bank transfers show that CHM purchased gold both from the cooperative and directly from several individuals in the southern part of the state of Para, which is part of the Brazilian Amazon.

The COOPEROURI cooperative has a permit to mine in an area next to the Kayapo Protected Indigenous Reserve, but police found the CHM and the cooperative purchased from independent miners without permits, according to investigation documents.

COOPEROURI could not be reached for comment.

The police report indicates that the cooperative and individual miners are illegally mining ore in the indigenous reservation, but does not state the basis for this allegation.

In the police report, satellite images of the Kayapo reserve – an area larger than Belgium – show vast expanses of muddy mining basins and clandestine airstrips to access them.

($1 = 5.45 reais)

Reporting by Jake Spring Editing by Brad Haynes, Daniel Flynn and David Gregorio

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