Peru’s Mining Boom Masks Deepening Crisis of Illegal Gold

(Analysis) Peru’s National Society of Mining, Petroleum and Energy reported that mining exports reached $17.211 billion in the first four months of 2025, a 23 percent jump over the same period last year.

Copper accounted for $8.113 billion, up 15.5 percent, while gold exports surged 44.7 percent to $6.272 billion. Mining made up 65 percent of all Peruvian exports in this period, confirming the sector’s dominant role in the nation’s economy.

Peru stands as the world’s second-largest copper producer and one of the top gold exporters. The country’s mining sector relies on major projects like Cerro Verde and Las Bambas to meet strong global demand for metals.

Copper exports rose due to a 16.8 percent increase in volume and a 9.3 percent price hike. Gold’s export value soared, driven by a 30.2 percent price surge and a 10.9 percent increase in volume.

These metals feed into global supply chains, supporting industries from electronics to green technologies. Yet, the mining boom hides a growing crisis. A surge in illegal mining, especially gold, has brought violence and environmental destruction.

In May, a criminal gang kidnapped and killed 13 miners working for Poderosa in Pataz province. The attack, part of a wave of violence since 2020, forced the government to impose a 30-day mining ban in the region.

This ban is expected to cost $200 million in lost gold output. Illegal mining now accounts for about 40 percent of Peru’s gold production. This parallel economy, worth billions, operates outside government oversight and environmental standards.

Organized crime groups fight for control of gold-rich territories, often targeting formal mining operations. Since 2022, nearly 40 workers linked to legal mines have died in violent attacks.

These groups also sabotage infrastructure, such as power lines, and invade mine sites, overwhelming local authorities. The environmental toll is severe. Illegal mining has destroyed over 100,000 hectares of forest and contaminated rivers with mercury.

In Madre de Dios, illegal gold mining has fueled a public health crisis, with rising cases of mercury poisoning, tuberculosis, and other diseases. The influx of workers into remote camps strains local communities and spreads infectious diseases.

Efforts to regulate small-scale mining through the Reinfo program have largely failed. Weak enforcement and repeated extensions have allowed many illegal operations to continue under the guise of legality.

The resulting loss in mining tax revenue has hurt public finances, with a 54 percent drop in tax collections in the first half of 2023. Peru’s mining sector remains vital for the country’s economy, but the unchecked rise of illegal mining threatens its stability.

Investors now face greater risks, and the government struggles to maintain order and protect legal operations. The situation in Peru highlights the challenges of balancing economic growth from mining with the need to control crime and protect the environment.