The dark side of Peru's gold boom

Rising gold output and prices are beginning to have negative effects in the Peruvian mining industry, as they encourage the spread of illegal activity and authorities are unable to respond effectively.

The energy and mines ministry expects 110 million fine grams (3.54Moz) of gold production this year, compared to 3.21Moz in 2023. Economics think tank IPE claimed that 80t (2.57Moz) were exported illegally last year and not registered by the ministry.

Medium-sized miner Summa Gold said in a statement on Wednesday that illegal miners attacked its operations in La Libertad region but were repelled by on-site personnel.

Summa claimed the same attackers were targeting Minera Poderosa's operations about 123km away months ago. Poderosa has repeatedly reported attacks in Pataz since 2022.

“The individuals who fired long-range weapons and detonated dynamite cartridges… are the same ones who steal mineral from the Peruvian State in the mines of the Polo forest. The objective of the attack, perpetrated by illegal miners from Coigobamba and criminals from Pataz, was to invade part of the Summa Gold mining concession,” according to a press release.

Summa Gold has been operating the El Toro mine since 2019. El Toro has a useful life of 10 years and produces between 100,000oz and 150,000oz per year.

Official efforts to curb illegal mining focus on jungle regions, but have been largely unsuccessful elsewhere and are even spreading to Cajamarca.

ATTACKS

Most reported attacks occur in northern La Libertad region (see table), without signs of slowing down.

So far this year, six attacks on mining companies have been reported, even though La Libertad is under a state of emergency due to illegal mining and spiraling crime generally.

"It is worrying that this occurs despite the state of emergency in the province of Pataz and having a contingent of more than 300 members of the national police and the army in the area. The significant presence of troops of public order in Pataz has not materialized in an important program of interdictions to the operations of illegal miners, who continue to act with impunity," Minera Poderosa said in a statement.

Pan American Silver (La Arena) and Boroo Misquichilca (Lagunas Norte) also operate in La Libertad and are equally at risk of attack.