Peru’s mining sector is at a critical crossroads as debates surrounding the Registro Integral de Formalización Minera (Reinfo) intensify. Originally intended to bring informal miners into the legal fold, the system is now under fire for allegedly facilitating illegal mining laundering.

Established in 2012, Reinfo was designed to help small-scale and artisanal miners operating outside the law. However, repeated extensions to its validity have sparked criticism. Investigations between 2021 and 2023 revealed that over 5,800 Reinfo-registered entities failed to submit mandatory gold production reports, highlighting the programme’s weak enforcement. As a result, environmental prosecutors and legal experts have condemned the initiative as largely ineffective in addressing illegal mining.

A Legislative Stalemate
Recently, the debate over Reinfo reignited in Peru’s Congress, with lawmakers divided over its future. While a proposal to extend Reinfo until June 2025 has passed a legislative commission, critics argue that further extensions could embolden illegal mining networks. Congresswoman Diana Gonzales called it “a gateway for criminal activities,” citing its inadequate oversight and numerous legal exemptions for registered miners.

Adding to the controversy is Eduardo Salhuana, a lawmaker with alleged ties to informal mining, who has played a pivotal role in pushing pro-mining legislation. His influence has raised concerns about the political dynamics shaping Peru’s mining policy.

Environmental and Economic Fallout
Illegal mining, distinct from informal mining, remains a pervasive issue in Peru. Operated by organised crime, it generates over $8.2bn annually—more than the narcotics trade. Investigations in Madre de Dios, a hotspot for illegal mining, uncovered discrepancies in official gold production figures, with government data reporting 1.4 tonnes in 2023, while independent reports identified 8.5 tonnes.

This illegal activity has caused extensive damage, destroying over 100,000 hectares of forest and introducing mercury contamination that threatens local ecosystems. Approximately 30% of the region's gold is mined illegally, contributing to health issues and the exploitation of child labour. Moreover, illegal mining has devastated the economy, with mining tax revenues plummeting by 54%, amounting to PEN7.2bn (around $2bn) less in the first half of 2023 compared to the same period in 2022.

While Peru leads the charge, illegal gold mining has surged across the whole region. A study by the Peruvian Institute of Economics (IPE) reveals that 50% of Bolivia’s gold exports originate from illegal mining in Peru. Notably, 45% of South America’s gold exports in 2023 were from Peru, while Bolivia contributed 13%. The primary markets for these exports include India, Canada, and the UAE.

In regions like Apurimac, the environmental damage is even more severe, including water and soil contamination, deforestation, and the infiltration of heavy metals into food chains, endangering public health and natural resources.

The Human Cost
The fight against the scourge of illegal mining has come at a human cost. Last April, Victorio Dariquebe Gerewa, a dedicated park ranger in Peru's Amarakaeri Communal Reserve, was tragically murdered by illegal miners in front of his son. An indigenous leader from the Harakbut-Huaachipaeri group, Dariquebe had spent a decade defending his community from illegal mining and drug trafficking, despite repeated threats. His death has sparked outrage among indigenous groups, demanding justice. Unfortunately, it points to the broader dangers faced by indigenous defenders in the region, where illegal mining, coca cultivation, and exploitation continue unchecked, despite government assurances.

In the Pataz region, violence linked to the practice continues to escalate, with recent attacks on the Poderosa gold mine, including the sabotage of power towers and dynamite assaults. In February 2024, illegal miners dismantled a high-voltage tower, disrupting operations at the site and compromising worker safety. This marked the 11th attack in 12 months, with past assaults resulting in fatalities and injuries. The government subsequently declared a state of emergency in Trujillo and Pataz to address the violence, involving criminal gangs and over 20 groups tied to illegal gold trade. Efforts to combat the violence, including military and police action, remain strained due to a lack of financial support and limited legal measures.

Widespread Protests
The conflict over Reinfo has also triggered widespread protests, with small-scale miners blocking major routes like the Panamericana Sur in Nasca. The National Federation of Small-Scale and Artisanal Miners (Fenamarpe) is demanding a two-year extension of the programme, arguing that more time is needed to complete the formalisation process.

These grassroots-driven acts of dissent highlight the delicate balance Peru must strike between supporting small-scale miners and combating the environmental and criminal consequences of unchecked mining. Illegal river mining, for example, has exacerbated pre-existing issues in tropical regions, increasing sedimentation, mercury contamination, and ecosystem disruption along rivers stretching up to 1,000 kilometres downstream.

Peru’s mining industry faces a pivotal moment. While government-led initiatives like Reinfo are essential for lifting artisanal miners out of the informal economy, they are not always accompanied by rigorous oversight and transparency. Without decisive reforms to address the issue's root causes, the country risks further environmental destruction and the entrenchment of illegal mining networks, undermining its efforts to regulate the sector effectively.