Illegal gold mining in Peru is worth around $3 billion

The amount of money laundered through illegal gold mining in Peru has shot up nearly 50 percent in 18 months, in another indication of the rapid expansion of this criminal sector and the illegal financial dealings that facilitate it.

Statistics compiled by Peru's Superintendency of Banking and Insurance (SBS) show illegal gold mining profits laundered rose from $1.02 billion to $1.53 billion between August 2012 and January 2014, reported by El Comercio.

In contrast, the amount of drug trafficking proceeds laundered over the same period crept up 5.9 percent, rising from $4.91 billion to $5.2 billion.

Flavio Mirella, the United Nations Office for Drugs and Crime (UNODC) representative for Ecuador and Peru, said the trend was likely to continue, as "the potential for illegal mining to expand is greater than that of coca cultivation." According to Mirella, coca production is comparatively easy to detect, while illegal mining can thrive in coastal, mountainous and jungle regions.

El Comercio reported that, according to specialists, illegal mining is currently responsible for 19 percent of all money laundering activities in Peru, while 63.4 percent comes from drug exports.

InSight Crime Analysis

The rapid rise in money laundering traced to illegal mining in Peru in part reflects the expansion of the sector, but could also be linked to the authorities' growing awareness of the trade.

Even with such steep figures, it is likely that the SBS is massively underestimating the amount of money laundered by Peru's illegal gold mining industry, which the government considers to be worth $3 billion a year -- significantly higher than the estimated value of the country's drug trade, even though Peru is the world's leading cocaine producer.

SEE ALSO: Coverage of Mining

Any under-reporting of these figures is likely linked to the ease with which the buyers of illegally mined gold can move it into the legal market. All that is required is a few easily falsified documents and the "dirty" gold is melted together with "clean" gold during the refining process, making it impossible to trace.

In April, Peru launched its first large scale security operations targeting illegal mining at its source. If they are to succeed in tackling the spread of the trade, they will also have to close the legal gaps exploited by money launderers.

Investigations

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
Prev Next

InSide Colombia's BACRIM: Murder

InSide Colombia's BACRIM: Murder

  Life of a Sicario Anatomy of a Hit   The BACRIM's control over territories such as the north Colombian region of Bajo Cauca comes at the point of a gun, and death is a constant price of their power.

Nariño, Colombia: Ground Zero of the Cocaine Trade

Nariño, Colombia: Ground Zero of the Cocaine Trade

The department of Nariño in southwest Colombia is the main coca-producing area in the country and in the world. It is a place scarred by poverty and years of armed conflict between guerrillas, the state and paramilitary groups. Perhaps nowhere else in the country are the challenges...

Venezuela Prisons: 'Pranes' and 'Revolutionary' Criminality

Venezuela Prisons: 'Pranes' and 'Revolutionary' Criminality

In May 2011, a 26-year-old prison gang leader held 4,000 members of the Venezuelan security forces, backed by tanks and helicopters, at bay for weeks. Humiliated nationally and internationally, it pushed President Hugo Chávez into a different and disastrous approach to the prison system.

Counting Firearms in Honduras

Counting Firearms in Honduras

Estimates vary widely as to how many legal and illegal weapons are circulating in Honduras. There are many reasons for this. The government does not have a centralized database that tracks arms seizures, purchases, sales and other matters concerning arms possession, availability and merchandising. The laws surrounding...

InSide Colombia's BACRIM: Money

InSide Colombia's BACRIM: Money

  Drugs Extortion Criminal Cash Flows Millions of dollars in dirty money circulate constantly around Bajo Cauca, flowing upwards and outwards from a broad range of criminal activities. The BACRIM are the chief regulators and beneficiaries of this shadow economy.

InSide Colombia's BACRIM: Power

InSide Colombia's BACRIM: Power

  The Bajo Cauca Franchise BACRIM-Land Armed Power Dynamics The BACRIM in places like the region of Bajo Cauca are a typical manifestation of Colombia's underworld today: a semi-autonomous local cell that is part of a powerful national network.

Closing the Gaps on Firearms Trafficking in Honduras

Closing the Gaps on Firearms Trafficking in Honduras

As set out in this report, the legal structure around Honduras' arms trade is deeply flawed. The legislation is inconsistent and unclear as to the roles of different institutions, while the regulatory system is insufficiently funded, anachronistic and administered by officials who are overworked or susceptible to...

Trafficking Firearms in Honduras

Trafficking Firearms in Honduras

The weapons trade within Honduras is difficult to monitor. This is largely because the military, the country's sole importer, and the Armory, the sole salesmen of weapons, do not release information to the public. The lack of transparency extends to private security companies, which do not have...

Trafficking Firearms Into Honduras

Trafficking Firearms Into Honduras

Honduras does not produce weapons,[1] but weapons are trafficked into the country in numerous ways. These vary depending on weapon availability in neighboring countries, demand in Honduras, government controls and other factors. They do not appear to obey a single strategic logic, other than that of evading...