Peruvian President Dina Boluarte on May 5 suspended all mining operations in La Libertad department, Peru’s top gold-producing region, for 30 days after the discovery on May 4 of the bodies of 13 gold mine workers who had been kidnapped and murdered by an armed illicit gold mining group. Peru’s mining industry has called on the government to ramp up its efforts to prevent violence associated with illegal mining, citing escalating physical danger to local residents. Why has Peru’s government struggled to limit illegal gold mining? To what extent do illegal gold mining operations pose a threat to mining revenues and investment across Latin America? What role does the value of gold on international markets play in unregulated mining activity in the region?
Julia Yansura, director of the Environmental Crime & Illicit Finance Program at the Financial Accountability and Corporate Transparency (FACT) Coalition: “The murder of 13 workers in Pataz, Peru earlier this month marks a dramatic escalation in violence in a crisis that has long been developing. A closer look at the case reveals the complexity of the stakeholders involved: formal mining companies, informal miners, formal and informal security providers, local police officers and half a dozen criminal gangs involved in extortion, drugs and gold trafficking in northern Peru. According to investigative reporting by OjoPúblico, the men who died worked at an informal security company that had been hired by an artisanal miner serving as a supplier and subcontractor to the large mine. The informal security company appears to be owned by two active police officers, one of whom is facing corruption charges related to unexplained wealth. What emerges from these details is a complex, murky picture in which the lines between public and private, and formal and informal, are blurred. Unfortunately, the official response by the Peruvian government has been inadequate. Reactive measures, such as local curfews and temporary suspensions, are no replacement for effective, national public policies. Moreover, the narrow focus on gold trafficking gangs fails to address severe structural challenges such as corruption, informality, and financial incentives. A ‘temporary’ registry of informal miners has operated since 2002, providing a legal shield for bad actors within the sector. Unfortunately, the absence of effective policies, combined with rising international gold prices, suggest that these challenges are here to stay.”
Alexandra Solórzano, chief executive owl at Owl Consultancy Group: “Peru’s illegal gold mining crisis epitomizes the convergence of transnational crime, environmental degradation and institutional vulnerabilities plaguing resource-rich regions. The recent murders of 13 miners in La Libertad—Peru’s top gold-producing department—underscore how criminal networks now rival drug cartels in sophistication, with illegal gold exports reaching $6.8 billion in 2024, a 41 percent annual increase. These groups exploit Peru’s regulatory gaps, particularly the REINFO formalization registry, which shields 80 percent of registered miners from prosecution while they process illicit gold. Criminal operations like Los Topos del Frio leverage cross-border supply chains, laundering gold through shell companies and exporting it to the UAE, China and Europe. Regionally, illegal mining has surpassed cocaine as Latin America’s most lucrative criminal enterprise, financing authoritarian regimes (like Venezuela’s Maduro) and driving 48 percent of Peru’s illicit financial flows. High gold prices—now exceeding $3,000 per ounce—intensify incentives, with mercury contamination and deforestation causing irreversible ecological harm in biodiverse zones like Madre de Dios, where 94 percent of residents show mercury poisoning. Despite Operation Mercury’s temporary success in reducing mining in protected areas, weak governance persists; Peru’s Congress extended temporary mining permits in 2024, enabling informal operations under REINFO. Globally, demand from U.S. and European refiners sustains this trade, while $10 million in seized gold linked to Peruvian networks reveals systemic complicity among legal exporters. It is critical for companies to implement enhanced supply-chain traceability and collect cross-border intelligence to mitigate potential exposure to these networks. Without dismantling financial networks and addressing price-driven incentives, illegal mining will continue undermining security and sustainability across the hemisphere.”
Luis E. Fernandez, research professor in the Department of Biology at Wake Forest University, and executive director of the Peruvian independent research center Centro de Innovación Científica Amazónica (CINCIA): “The killings in La Libertad are not an isolated criminal act—they’re a signal of systemic governance stress playing out across Latin America’s resource frontiers. Illegal gold mining has become a high-reward, low-risk enterprise because it exploits a vacuum. Where state presence is minimal, institutions are fragmented and the gold trade remains globally untraceable. Peru’s struggle to contain illegal mining reflects deeper structural dysfunction. The state’s territorial reach has eroded, enforcement is siloed and reactive, and local economies are tethered to informal extraction. But this is no longer a localized problem. Unregulated gold flows now distort markets, undermine legal investment and incentivize violence from Colombia to Suriname. What’s more concerning is that these patterns are accelerating in the wake of a shifting international order. As global demand for hard assets like gold surges in response to financial volatility and weakened multilateral norms, illicit networks are outpacing governance systems designed for a different era. We lack a global traceability framework for gold—and in its absence, markets continue to reward opacity over compliance. In the Amazon, gold mining has become a case study in how global governance gaps fuel environmental crime, deforestation, biodiversity loss and widespread mercury poisoning of communities. At CINCIA, the nonprofit research center I direct focused on environmental intelligence in the Amazon, we’re developing tools that connect science, surveillance, and strategy—enabling governments and global institutions to shift from reaction to prevention. If the international community fails to act, gold will continue to fund impunity, and the erosion of places like the Amazon may become irreversible.”
Danny Pinedo, professor of anthropology at the Universidad Nacional Mayor de San Marcos in Lima: “Peruvian President Dina Boluarte’s government has not yet put an end to illegal mining in the country because Congress, its main ally and the reason why it remains in power, has links to illegal gold mining. The Congress’ president, Eduardo Salhuana, has faced allegations of having ties to the illegal and informal mining lobby. A former attorney for illegal miners, Salhuana has been the author of several pro-mining bills. A multi-party coalition of congressmen several times has enacted laws that extend the Integral Registry of Mining Formalization (REINFO), a program that allows informal miners to operate under temporary permits. As the case of Pataz shows, illegal gold mining definitively poses a threat to formal mining. Through their ties to organized crime, illegal miners seek to displace formal mining companies from their concessions. The impunity with which these criminals operate may discourage other formal miners from investing in the country, depriving the Peruvian state from important revenues. The rising gold prices certainly play a crucial role in the rapid growth of illegal mining in Peru and the region. Illegal gold mining is the most profitable illegal industry in Peru, generating even more money than drug trafficking. But gold prices are not the only reason. Widespread poverty and the lack of state oversight also encourage people to engage in this illegal activity.”
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