Illegal mining in Peru: a growing problem and its consequences

Illegal mining in Peru: a growing issue and its consequences Illegal mining has become a severe and growing issue in Peru, spreading throughout the country, mainly in the Amazon and border areas. In the past two years, 16 workers of the Poderosa mining company in Pataz (La Libertad) have lost their lives, and 15 high-voltage towers have been knocked down as a result of this illicit activity. The lack of timely actions by authorities regarding this problem is having serious consequences on the population and the national economy, which is a concern for various sectors. The Peruvian Institute of Economics (IPE) will soon present the study "Comparative analysis of governmental actions against illegal and informal mining in South America," with the aim of shedding light on this issue that affects not only Peru but the entire region. According to IPE estimates, 44% of the illegal gold exported in South America comes from Peru, surpassing countries like Colombia and Bolivia. This situation places the country as the epicenter of illegal mining in the region, with consequences that extend beyond its borders. The rapid expansion of illegal mining in the country is partly due to the increase in the international price of metals such as gold and copper. The price of gold per gram has multiplied seven times since 2000, exceeding US$63 in 2023. This rise has driven an increase in the export of illegal gold in Peru, reaching 77 tons in 2023, representing 44% of the country's total gold exports. It is expected that if the upward trend in the price of gold continues, illegal production will also increase. Institutional weakness and lack of international coordination have hindered the fight against illegal mining, especially in border and hard-to-reach areas. In the case of Peru, the high turnover of Interior Ministers in recent years has worsened the situation, hindering the continuity of policies aimed at eradicating this activity. The constant changes in this office have prevented a solid and sustained strategy over time to combat illegal mining, creating fertile ground for its growth. With the expansion of illegal mining in the country, the export destinations of the produced gold have also diversified, with a decreasing proportion destined for the United States and Switzerland, and a higher proportion directed towards India and the United Arab Emirates. Since 2017, an increasing number of companies trading illegal Peruvian gold have directed their exports to these destinations for refining, according to a study by the Center for Advanced Defense Studies of the United States (C4ADS). This situation highlights the complexity and magnitude of the illegal commercialization network operating in the country. Illegal mining finds spaces to grow through the smuggling of chemical inputs, requiring high levels of coordination, especially among neighboring countries, to effectively combat it. Despite Peru's efforts to tighten controls on restricted chemical inputs, such as mercury, weak control in Bolivia over the commercialization of these chemicals has facilitated smuggling from that country, fueling illegal activity in the region. While favorable mineral prices could drive a new cycle of investments in the sector and generate economic benefits for the country, they could also favor an increase in illegal activity if effective strategies are not implemented to combat it. Without clear leadership and an intersectoral and cross-border strategy with concrete indicators, the harms of illegal mining will continue to negatively impact the population and the national economy. It is urgent to address this issue to prevent further short and long-term consequences.