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Global crisis sparks gold rush

PEDRO Ferreira spends his days and nights in a cramped, steamy tunnel under the damp earth of the Amazon rain forest, chipping away at a wall of rock glittering with traces of gold.

He is one of nearly a thousand "wildcat" miners who made a five-day boat journey to this remote jungle site to dig for gold - more highly prized now than ever as international investors flock to the metal as a safe haven in the global financial crisis.

"With rumors of a new discovery and the high price of gold, I came straight here," said Ferreira, 34, after emerging from a hole in the ground at the Bom Jesus mine on the upper Tapajos River.

The global crisis has revived this and other wildcat mines in Brazil where hundreds of thousands of desperate workers toil in precarious conditions, damaging health and environment.

In the Tapajos valley the number of miners has jumped about 40 percent to 30,000 since October, coinciding with a sharp rally in the price of gold.

"It's fueling our commerce. I don't know what we'd do without mining," said Seme Sefrian Junior, an official from the town of Itaituba.

The falling prices of other commodities that Brazil relies on helped push many to Bom Jesus. Antonio Souza Oliveira, dressed in shorts and sandals in the tropical heat, left his 70 head of cattle to dig for gold.

"Raising cattle no longer pays - this is what puts my kids through school," said a smiling 47-year-old Oliveira, pointing at a glittering piece of rock.

The price of beef, of which Brazil is the world's biggest exporter, has fallen 18 percent from nearly a year ago.

Critics say "wildcat" mining is more of a curse than a blessing in a region where lawlessness thrives.

Working conditions are subhuman. Local strongmen take the bulk of the profit and enforce their rules with a gun. Disease, prostitution and environmental destruction abound.

"It is one of the wounds of the Amazon," said Roberto Mangabeira Unger, the minister for strategic affairs. "It's like serfdom but we won't try to hide it."


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