FEATURE-In Lula's war on illegal mining, Amazon villagers count losses

* Brazil cracks down on illegal mining in the Amazon

* Deforestation hits traditional forest income sources

* Government urged to offer economic alternatives

By Andre Cabette Fabio HUMAITA, Brazil, April 26 (Thomson Reuters Foundation) - I n November, Pedro and two of his sons rushed to the river and sank their mining boat under the brown water to hide it from officials patrolling the Amazon area as Brazil's government cracks down on wildcat gold miners.

Wooden barges like theirs, equipped with suction hoses and other mining machinery, are used to dredge for gold in the region's rivers - a polluting and largely illegal activity that President Luis Inacio Lula da Silva wants to stamp out. Hundreds of unlicensed mining barges have been destroyed by federal patrols since he took office in January 2023, with miners fined or arrested in some cases.

But in some riverside communities, villagers say mining has become their only means for survival as deforestation and land-grabbing erode their income from traditional activities such as gathering and selling forest nuts and fruits such as the prized acai berry. "They took the timber from the forest and burned the nut tree groves ... Mining is what's left, we survive off it," Pedro, 54, told the Thomson Reuters Foundation on the front porch of his wooden, riverside house. His real name is not being used to protect his identity.

In the Humaita municipality, where Pedro's small village of Pirapitinga is located, annual deforestation increased nearly 20-fold between 2015 and 2022, according to data from Brazil's National Institute for Space Research. Under Lula, who has vowed to protect the Amazon and Indigenous people to help fight climate change, deforestation has fallen sharply in the municipality and elsewhere in the region.

In places like Pirapitinga, which lies in western Brazil in Amazonas state, the loss of forest and spread of cattle pastures has driven some locals to rely more on wildcat mining, known in Brazil as "garimpo", which uses mercury to separate gold from sediment. Spurred by higher global gold prices, mining activity has been increasing over the last decade, according to MapBiomas, a Brazilian network of scientists, non-profits, universities and technology firms.

The land area affected by small-scale mining more than doubled between 2012 and 2022 to 264,000 hectares (652,000 acres) in Brazil, overwhelmingly near Amazon rivers, surpassing industrial mining, according to MapBiomas data released this month. Many locals see the illegal trade as justified due to the lack of economic alternatives, which critics say the government has failed to address as the enforcement drive forges ahead.

The government "burns the boats, but never comes back, it doesn't really offer anything", said local social worker Ireniza Lia Silva. The crackdown is taking a toll on the community, even hitting donations at her evangelical church, she added. LOSS OF INCOME

On the forested banks of the Madeira river between the city of Humaita and Pirapitinga, mining barges can be seen moored by grassy beaches, or hidden among the branches of trees. Some two-story boats are used both as mining stations and homes by the poorest families, locals said. Wrecked, partially submerged boats are another frequent sight.

During Lula's first nine months in office, 315 mining boats were destroyed along the Madeira - more than twice the total during 2022, according to government data compiled by Maria Karina Mendonca de Moraes, a doctorate student at the Federal University of Rondonia state. "There are people who lost their homes," she said, referring to the economic impact of the crackdown on mining families.

More than half of Humaita's population of 57,400 is considered poor, according to government data. Pedro, who lives with his wife and five of his children, said he and his sons took out loans to help buy and kit out their mining boat at a cost of 60,000 reais ($11,500).

It took them another 3,000 reais and a week's work to get the boat back up and running again after they scuttled it in November. People who work for the miners are also feeling the pinch.

"As a cook I made 100 reais a week in a 'garimpo' boat, but now they won't let people work," said Ocilene Brito Silva, another Pirapitinga resident, who now relies mostly on direct cash transfers from the government to survive. "The acai (berry) season has ended, there are no more nuts, and fishing has also become tough," she said.

In a small office in riverside Humaita, Mauri Maurilio dos Santos acts both as president of the local rural workers' union and a new cooperative of "garimpo" miners. He said the government should address the economic impact of the mining crackdown.

"If the government wants to eradicate 'garimpo', then we want compensation, or a (government aid) bill to cover costs for when they (miners) have no work," he said. ENVIRONMENTAL COST

Illegal small-scale mining has been practiced by poor Brazilians for centuries, often tolerated by authorities keen to consolidate the colonization of the country's vast interior. Since colonial times, however, shovels and sieves have been replaced by heavier equipment, such as the mining barges, expensive and more destructive dredgers, and bulldozers - used to dig riverside slopes.

The resurgence of small-scale mining has led to chronic mercury contamination, and in parts of the Amazon, Indigenous people are dying from diseases brought onto their territories by the miners, and in violence linked to land disputes fueled by the activity. In Humaita, most of the mining happens outside Indigenous territories, but government officials say the environmental costs must be tackled - even if it causes hardship for the miners.

"You can't just give up on enforcement against criminality because of extreme poverty, or unemployment," said Cesar Luiz da Silva Guimaraes, superintendent at Ibama, a federal environmental agency. "There's an environmental cost and consequences for the health of people who don't have any connection with mining."

A 2023 study by the Oswaldo Cruz Foundation health research institute found 25% of the fish being sold in Humaita's markets was contaminated with mercury above safe limits. Researchers say putting a stop to the environmental damage caused by the "garimpeiros" will only succeed if miners have other ways of making a living.

For example, state subsidies are boosting Amazon rubber tappers' earnings, allowing some to potentially earn nearly 15,000 reais in a month, said Aurelio Diaz Herraiz, from the Federal Institute of Education, Science and Technology of Amazonas state. "This makes their (miners') heads tick: they don't have to invest in boats, nor move around with their families," he added, saying the federal government could do more to support rubber tapping or other traditional forest-based activities.

Just 50 million reais is earmarked for guaranteeing minimum prices for forest products in Brazil's 2023/24 agricultural plan, out of 364 billion reais in total subsidies, official data shows. The price of gold, on the other hand, surpassed $2,400 an ounce this month, an all-time high fueled by faraway geopolitical instability driving the Amazon gold rush.

Pedro said he had no plans to give up mining, despite the risk of having expensive equipment destroyed. "If there is an end to 'garimpo', then we're done for," he said. ($1 = 5.2072 reais)

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