An overwhelming majority of Peruvians (85%) perceive the state's response to illegal mining as ineffective, with 73% believing the current government under Dina Boluarte is too lenient in combating it. This sentiment is amplified by the perception that illegal mining activities will finance political parties in upcoming elections, highlighting a deep-rooted problem that intertwines economic, social, and political spheres.

Surveys indicate that 81% of citizens clearly perceive illegal mining as a serious problem, primarily associated with organized crime (44%), environmental pollution (41%), and political corruption (24%). Furthermore, 56% believe illegal mining has infiltrated Congress, and 83% think it will fund political parties, raising concerns about the integrity of the electoral process.

Regional perspectives vary; while the South views the central government as primarily responsible, the North favors more drastic measures by the Armed Forces. This divergence reflects a recognition that current government actions are ineffective, leading to calls for more decisive interventions. Conversely, 15% of Peruvians believe illegal mining benefits the local economy, indicating a division in public opinion.

Market Signals

The surge in gold prices, hovering around $3,398 per ounce as of July 2025, is driving illegal mining, making it Peru's most profitable illegal industry.
The shadow economy generated by illegal mining activities is estimated to account for approximately 6% of Peru's GDP, distorting market dynamics and depriving the state of substantial revenue.
Major companies like MMG, Glencore, and Hudbay are facing disruptions due to protests by small-scale miners, creating a volatile operating environment for the entire mining sector.

Stakeholder Impact

Companies adhering to ESG (Environmental, Social, and Governance) standards and strong community relations may gain a competitive advantage. Legitimate mining companies face increased operational risks and potential disruptions. Local communities suffer from environmental degradation, mercury poisoning, and health issues.

Action Timeline

Immediate: A reduction in REINFO program participants, signaling a tougher government stance.
Short-term: The need to strengthen regulatory measures and investigate the financing of political parties by illegal miners.
Long-term: Developing effective strategies to formalize the informal mining sector and address the root causes of corruption and organized crime.

Risk Assessment

Regulatory Risks: Regulatory uncertainty due to changes in enforcement strategies and formalization programs.
Market Volatility: The impact of commodity price fluctuations, particularly gold, on the profitability of illegal mining activities.
Social and Political Instability: The potential for illegal mining to influence political financing, leading to political instability.