Can Peru tame its multibillion-dollar illegal mining industry with new law?

Illegal mining in Peru, which is expected to generate US$6bn in revenues this year, is approaching a decisive moment with the debate on the proposed law for the formalization of artisanal and small-scale mining (MAPE), scheduled for December. 

The key question remains whether illegal mining, which particularly focuses on extracting gold, will be able to continue to operate with the current levels of impunity beyond 2025.

Currently, many illegal miners operate under the comprehensive mining formalization registry (Reinfo), initially designed to regulate small-scale miners. However, the registry has been criticized for shielding illegal operations, with minimal oversight of those enrolled. 

Of the 84,440 informal miners registered since Reinfo was created in 2017, only 19,753 are undergoing effective processes of formalization, according to Reinfo's database.

Reinfo is set to expire in December, but informal miners – who wield substantial influence in congress – are exerting significant pressure to secure an extension until 2026. Meanwhile, the ministry of energy and mines (Minem) submitted the MAPE law proposal on November 22 and it is slated for debate in early December.

The figures

As an illegal activity, precise figures on the revenues generated by illicit mining are not available, but it is estimated to have grown rapidly. According to a recent report by daily El Comercio, between 2012 and October 2024, illegal mining generated US$10.4bn, making it Peru’s most lucrative illegal industry. Intelligence reports drafted by banking and insurance regulator SBS suggest that most of the illegally mined gold originates from Madre de Dios, Puno and Callao regions.

Federico Chávarry, a prosecutor specializing in environmental crimes in Puno, estimates that the sector could generate up to US$12bn per year, with over 7,200 investigations into illegal mining operations currently underway in that region alone.

With gold prices exceeding US$2,600/oz, the activity remains highly attractive, drawing more participants and more than 40% of Peru’s gold exports are estimated to be mined illegally.

The situation 

Minem’s November 22 submission of the MAPE law to congress came under heavy fire from some quarters, with lawmakers calling for minister Rómulo Mucho to be sacked. Legislators argue that the proposal is long overdue but fails to adequately address the issue. While some members of congress acknowledge that Reinfo protects illegal miners, opposition to its extension remains divided.

The debate on the MAPE law and the future of Reinfo is scheduled for the first week of December, but the outlook is bleak for any real measures to stem the activity since illegal miners have significant influence in congress, and even the current president of congress, Eduardo Salhuana, is a former attorney for illegal miners. Congressman Segundo Quiroz, who is also thought to have links to the illegal mining industry, has proposed extending Reinfo until 2027 and has hosted over 70 meetings with miners at his office.

If Reinfo expires without the implementation of the MAPE law, thousands of miners could be pushed further into illegality, which would likely escalate protests and violence. Informal miners are already blocking various roads across the country to defend their rights to operate.