Colombian authorities shut down an illegal gold mine which was operating as a marble processing plant in Palermo, and have arrested a 27-year-old man on charges of environmental pollution, according to La Nacion.

The illegal mine was discovered due to contamination by processing chemicals that were found in a waterway behind the plant, and which was affecting local residents and animals, according to Diario del Huila.

Police and dog handlers of the local police and environmental officials were seen scouting the waterway about 3 miles from the plant where they found cyanide, nitric acid, mercury, boron and zinc, among other chemicals, which are all used in the extraction of mineral resources.

These chemicals had contaminated the Magdalena River and were killing cattle and farm animals of neighboring residents, La Nacion reported.

After uncovering the illegal operation, police seized about 200 million pesos of machinery and chemicals.

Even as the price of gold drops worldwide, illegal mining operations continue to thrive in Colombia.

The situation has escalated over the past decade because of a huge gap between the government and the situation on the ground, according to Mining Markets.

While the government is busy trying to attract investors, the illegal operations coming to light are preventing it from succeeding.

It is not the only Latin American country to face illegal gold mining operations, but it appears to have the most intricate set of problems.

Some of the issues facing Colombia include: lack of institutional support for the sector, lack of a clear mining and environmental policy, a lack of legal certainty from changing rules, strong anti-mining socio-political climate, government institutions not ready for large-scale mining, and fragmented and often confusing industry message to government, according to Mining Markets.

But the country is taking steps to stop illegal activity.

In June, the government created a new police unit, the National Unit of Intervention against Criminal Mining, to combat the theft, trafficking and illegal sales of mining products, according to InSightCrime.

The police target machinery used in illegal mining, and to-date have destroyed 52 machines since May this year, InSightCrime reported. In addition, a group that formed in 2010, National Carabineers Unit to Combat Illegal Mining, has intervened in the operations of 3,000 mines in 2010, about 1,000 of which were suspended or closed, and arrested about 5,500 people.

Authorities are unable to calculate the scale of illegal mining but have estimated about 63 percent in the country is unlicensed, according to InSightCrime.