In Peru, a gold mining battle rages over registry of "impunity"

• Peru attempts to regulate illegal gold mining
• Gold miners protest new law
• Experts say illegal gold mines fuel crime, corrpution

LIMA, Peru - Thousands of gold miners camped out in the centre of the Peruvian capital and blocked the main highway this week to protest government plans to regulate illegal mining that experts say fuels extortion and human trafficking.

Peru's government presented a bill to Congress last week aimed at fast-tracking the formalisation of up to half a million informal and illegal miners in the country by replacing an existing registry known by its Spanish acronym REINFO.

The registry allows "illegal miners to continue operating with impunity" as listed miners are "exempt from criminal liability" and thus cannot be investigated or prosecuted by the justice system, said Cesar Ipenza, an environmental lawyer.  

REINFO, which has been extended multiple times, has protected miners for more than a decade as powerful interests in the sector mean that "Congress has always (supported) informal and illegal miners," Ipenza said. 

The government's Small and Artisanal Mining Law, or MAPE, gives small-scale miners six months to formalise activities after the REINFO registry expires at the end of the year, but miners are demanding a two-year extension to the programme. 

Peru is South America's biggest gold producer and the seventh largest in the world.

Just 21% of the 84,434 listed miners comply with formal operational requirements such as registering their production and using a tax number. The other 79% have had their mining permits suspended for failing to comply with the requirements.

Since the registry was opened in 2012, just 2%, or 2,081 miners, have completed the formalisation process and now pay tax, have access to credit and employ clean mining techniques without using toxic mercury.

The new law comes in response to mounting pressure from civil society and the country's business elite to rein in unregulated miners. Critics accuse lawmakers in Congress of seeking to shield illegal gold miners from prosecution.

Eduardo Salhuana, the speaker of Peru's Congress, told Context the allegation that some lawmakers, including himself, defended illegal gold mining was baseless.

The 62-year-old congressman for Madre de Dios, a biodiverse Amazon region that has long been a hub for illegal mining, said it generated employment and economic activity, which is why he had to take an interest in the issue. 

The Peruvian Institute Of Economics think tank estimated illegal gold exports would reach a record high of nearly $7 billion this year, making it by far the country's biggest illicit economic activity.

Informal and illegal gold mining has spread to every region of Peru since the COVID-19 pandemic. Its big profits attract organised crime groups, which in turn fuel a steep rise in crime, including extortion, murder-for-hire and human trafficking, according to the United Nations Office on Drugs and Crime.

The activity has resulted in at least 30 deaths in Peru in the past two years from attacks on formal mines due to disputes with illegal miners.

The mining also leaves a trail of environmental destruction, contaminating protected areas of conservation and Indigenous reserves with mercury and damaging ecosystems and human health, say scientists from the Center for Amazonian Scientific Innovation. 

Money laundering

It not clear whether Congress will approve the MAPE bill before the start of its Christmas recess expected on Dec. 15.

Salhuana blamed successive governments for the failure of the REINFO registry to regulate the sprawling informal and illegal sector and said deadlines had been extended for the state to make a definitive decision that will impact half a million Peruvians.

"Gold is an important resource in Peru, the price is rising on the international market and if we do not order the activity, the situation will become increasingly disorderly and anarchic," he said.

Peru's illegal gold exports are expected to reach an all-time high of $6.84 billion in 2024, according to the Peruvian Institute of Economics.

The figure is 41% higher than in 2023, and more than five times the 8% growth that Peru's Central Reserve Bank expects for total exports this year.

Driven by lax law enforcement, political support and record international gold prices, earnings from illegal mining have surpassed even drug trafficking, even though Peru is second only to Colombia when it comes to growing coca, the plant that is turned into cocaine, according to the United Nations. 

"Illegal mining as an illegal economy is moving considerably more money than drug trafficking, according to some sources, up to twice as much," General Rodolfo Garcia, Peru's high commissioner against illegal mining, told Context. 

He said the country needed to push its mining formalisation efforts so that informal and illegal miners in Peru could be subject to environmental controls, while contributing to the economy and providing for their families.

Illegal gold mining accounted for $9 billion, or 60% of Peru's total laundered assets between January 2014 and October 2024, according to the country's Financial Intelligence Unit.

It said the amount of money laundered via illegal mining dwarfed the next biggest sources of laundered assets such as crimes against public administration (10%), tax fraud (10%) and drug trafficking (5%).

Daniel Linares, chief of operational analysis at the Financial Intelligence Unit, said criminals engaged in other "illicit activities find illegal mining is the best way to launder their money". 

"As long as the international market continues to demand more gold, unfortunately, the jungle will continue to receive hundreds or thousands of unemployed Peruvians fleeing poverty in their regions," Salhuana said. 

(Reporting by Dan Collyns; Editing by Jack Graham & Jon Hemming.)