The biggest force in Peru’s gold industry these days isn’t Newmont Corp. or Buenaventura. It’s the thousands of illegal miners digging across South America’s No. 1 gold producer.
Illegally mined gold exports from Peru rose over 19% in the first half of this year, as high prices and loose requirements have fueled incentives for diggers in the country’s poor rural areas. Legal gold exports, meanwhile, fell nearly 6% as aging mines yield less, pushing illicit shipments above legal ones through June and putting 2026 on track to be the first year they come out on top, according to a recent report by the Lima-based think tank Peruvian Institute of Economics, IPE.
“Illegal miners are now the biggest and most powerful miner in the country,” said Gonzalo Quijandría, vice president of Peru’s main mining industry group, SNMPE. Illegal diggers aren’t just expanding into off-limits areas such as nature reserves, he said. “Increasingly, they’re invading formal mines and exporting that gold as their own without paying a dollar in taxes.”
By comparing formal gold volumes reported to Peruvian authorities with customs export data, IPE’s report found that illegally sourced gold exports exceeded legal shipments by 8.7 tons through June, accounting for 54% of Peru’s total gold export volume. Yet these numbers could be higher, IPE’s economist Paola Herrera said, since they don’t include gold that may be smuggled across borders.
IPE expects Peru’s illegal gold exports to hit at least $16 billion this year. That would be 39% more than in 2025 and almost nine times the value a decade ago. Over the same period, gold prices are up nearly fourfold.
Big players such as Newmont, MMG Ltd. and Southern Copper Corp. have dealt with informal miners on their concessions in Peru, with tensions running especially high at Cia. Minera Poderosa SA’s mines in Pataz, where dozens of people have been killed in recent years in clashes over gold.
This has led to disputes over mineral rights, in some cases delaying projects and reducing tax revenues, while risking squeezing resources for rising global demand and damaging the Andean nation’s image as an attractive investment destination.
Peru has already ceded its position as the second-largest copper producer to the Democratic Republic of Congo, and in the Fraser Institute’s latest investment-attractiveness index, the country fell one place to 41 out of 68 mining jurisdictions. The last time a large new mine began producing in Peru was four years ago.
A blank check
Peruvian authorities are grappling with how to deal with the surge in illegal mining. Energy and Mines Minister Guillermo Shinno has said President Keiko Fujimori’s new government plans to let a controversial permit known as Reinfo expire at the end of the year after repeated extensions kept it alive for a decade. Reinfo was designed to temporarily let small-scale miners keep working while they formalize, but critics say it has instead helped illegal miners spread.
“We’ve given them a blank check,” Quijandría said, adding that Reinfo gives miners little incentive to complete the formalization process and instead lets them “work illegally without anyone controlling them.”
Minister Shinno wants to replace Reinfo with a “much simpler” formalization process, he recently told local media, without providing further details. He also shared his plans to cut red tape to get new mining projects moving faster.
The industry has welcomed the push, with Quijandría saying excessive bureaucracy and a weak rule of law have hurt the competitiveness of a sector that accounts for more than 60% of Peru’s exports.
“It’s not as simple as saying everyone will be formal tomorrow,” Quijandría said. “We’ll also have to bring the full weight of the law and force to bear,” and that means involving both the police and armed forces, he said.
(By Carla Samon Ros)
