The earnings from Illegally extracted gold in Peru have soared to record levels, fueling criminal organizations while the country debates whether to extend its mining formalization efforts.
Exports of such gold are projected to hit a record $6.84 billion in 2024, marking a 41% increase over 2023, according to the Instituto Peruano de Economía (IPE). The IPE says some 44% of South America’s illegal gold comes from Peru.
At the same time, Peru’s Congress is debating an extension of the Registro Integral de Formalización Minera (Reinfo), a measure designed to regulate small-scale and artisanal mining, despite its limited success to date.
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Since Reinfo exempts miners who have requested to enter the process of formalizing their businesses from criminal liability, the system has enabled many workers to continue extracting illegal gold..
Controlling illegal mining poses a significant challenge for Peruvian authorities hindered by political instability and limited enforcement power, as President Dina Boluarte’s approval rating sits at a mere five percent.
InSight Crime Analysis
With global gold prices soaring, illegal mining has become an essential income stream for criminal groups in countries like Peru, Colombia, and Bolivia.
The high value of gold has made control over illegal mines a lucrative venture for these organizations, which funnel profits into expanding their operations and funding other illicit activities, including drug trafficking and extortion.
IPE reports that 44% of Peru’s total gold exports originate from illegal mining, while in Colombia, this figure rises to 85% and in Bolivia to 50%. However, environmental lawyer and illegal mining expert César Ipenza suggests that the situation in Peru may be more severe than in other countries due to the sheer scale of illegal gold extraction and its export, which far exceeds that of Colombia and Bolivia. According to national reports, while Perú exported 77 tons of gold in 2023, Colombia dispatched 72, and Bolivia 51.
Ipenza also noted that official export statistics may miss a substantial amount of illegally mined Peruvian gold due to weak border controls, leaving a notable portion of annual exports untracked.
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Ipenza also highlighted the involvement of foreign criminal actors in Peru’s illegal mining industry, adding further complexity to an already challenging situation. “It’s true that there are foreign actors or hitmen providing security in the area,” he said, referring to reports of organizations such as the Venezuelan megabanda Tren de Aragua and the Ecuadorian gang the Lobos in Peru’s illegal mining sector. With rising gold prices, this activity is becoming increasingly profitable for these groups, which reap substantial gains from illegal mining.
Featured Image: Environmental devastation of an illegal mining area in Peru. Credit: Rodrigo Abd/Gatoparto