Understanding the Global Illicit Gold Economy

In June, the International Institute for Strategic Studies (IISS), a research institute focused on global security, conflict and development, published a new report that took an in-depth look at 10 gold-producing countries across Latin America, Sub Saharan Africa and Southeast Asia to examine the factors shaping global security, governance and economic dynamics across these gold producing regions. The production of this report was supported by funding from the World Gold Council.

To better understand the vulnerabilities and strength of each region, the authors developed the Illicit Gold Preparedness and Response Matrix, a structured analytical framework designed to assess both how countries are exposed to and equipped to respond to illicit gold activity. The Matrix provides a comparative tool to benchmark performance and identify policy priorities. Rather than producing a single ranking, it assesses countries across four distinct pillars—security, governance, economic vulnerability, and resilience—enabling a more nuanced picture of both risks and strengths.

Illicit artisanal and small-scale gold mining is prevalent in each of the countries examined by the report. Operating outside the formal gold market, this activity can be linked to environmental degradation, money laundering, corruption, tax revenue losses, organized crime and the financing of non-state armed groups. The report underscores that illicit ASGM is both a critical livelihood for millions and a growing source of vulnerability where governance is weak and oversight is limited.

Security, governance and economics are the three foundational pillars of the rubric. The security pillar looks at factors such as the presence of criminal actors, conflict intensity and resource-related crime. The governance pillar examines corruption, rule of law, judicial effectiveness and anti-money-laundering mechanisms, while the economic pillar considers issues such as poverty, informality and currency volatility. Together, these indicators illustrate the conditions under which illicit ASGM can take root and expand, highlighting how structural weaknesses across these domains increase exposure to illicit gold economies.

Complementing these risk factors, the Matrix introduces a fourth pillar focused on resilience, which assesses a country’s capacity to prevent, manage and respond to illicit gold activity. This includes variables such as law enforcement preparedness, inter agency and regional cooperation, government effectiveness and the existence of ASGM formalisation programmes. The results demonstrate that resilience is closely linked to broader state capacity, and that countries often exhibit uneven performance across pillars—showing strength in some areas while remaining vulnerable in others.

Overall, the Matrix provides a practical and evidence-based rubric for understanding illicit gold dynamics at both national and regional levels. By combining multiple indicators into a comparative framework, it enables policymakers and stakeholders to identify specific vulnerabilities, recognise areas of relative strength and design more targeted interventions. As the report makes clear, addressing illicit gold mining and trafficking requires coordinated action across security, governance and economic domains—supported by stronger resilience measures and tailored, context-specific policy responses.

The report also highlights the importance of coordinated, multi-dimensional responses to mitigate the impact of illicit gold mining. It points to the need for stronger governance and enforcement frameworks, improved transparency and oversight across gold supply chains, and enhanced cross-border cooperation to address the transnational nature of illicit flows. Equally, it underscores the role of economic and development-focused interventions, particularly efforts to formalise ASGM, strengthen livelihoods and reduce informality, in tackling the structural drivers of illicit activity. Taken together, these recommendations emphasise that effective responses must address both the enabling conditions and the underlying vulnerabilities identified through the Matrix framework. In several of the countries reviewed, illicit ASGM and the failure to regulate it effectively poses a significant risk to the integrity of governance, political stability and security. The IISS are planning a series of regional case studies in the second half of 2026.

Against this backdrop the World Gold Council is working to develop a practical and scalable model of ASGM formalisation, called the Gold Processing Initiative (GPI). By giving artisanal miners access to centralized processing plants gold recovery can be increased, mercury eliminated, and supply chain transparency enhanced. Miners can focus on mining, and the processing can take place at more sophisticated processing facilities. The increased yield available to miners creates an incentive to participate and can fund further formalisation. It also creates a regulatory choke-point, facilitating more robust supervision and lowering barriers to external finance. This won’t work without origin verification technology, and the WGC is funding the development of an OVT that uses the unique chemical profile of a mine-site as a naturally occurring unique market that can be used to identify the origin of ore, further strengthening the supply chain.

For this to be successful appropriate standards and regulatory frameworks need to be in place, and this IISS report identifies the policy and capacity areas that ASGM host countries might want to prioritise. By bringing together governments, NGOs, and commercial enterprises we can create a model for formalization that can be scaled and have a meaningful impact on those who rely on artisanal gold mining for their livelihoods, and address the challenges of the sector that can have such a devastating effect when not managed appropriately.

More information about the WGC’s ASGM programme can be found on www.gold.org/asgm