Agents from the national customs agency Sunat discovered the chemicals in 10 plastic bottles stashed in concealed compartments underneath the seats of a car travelling to Puno through the Tacna region, near the borders with Bolivia and Chile, reported Andina.

The mercury, worth over $21,000, was of foreign origin and was likely destined for use in illegal gold mining in the Madre de Dios region, reported Peru21.

Officials detained five people, including two minors, who were travelling in the car.

InSight Crime Analysis

According to Peru-based firm Macroconsult, the country’s illegal mining exports were worth approximately $1.79 billion in 2011, and illegally mined gold accounted for 22 percent of Peru’s total gold exports. Mercury is used as part of the gold refining process.

Some claim that organized crime is heavily involved in the sector. Last year, security analyst Ruben Vargas claimed there was an "undeniable link" between illegal mining and drug traffickers, who, he said, used the sector to launder their profits. Vargas highlighted the Madre de Dios region and the city of Puno as hot-spots for both the drug trade and illegal mining.

However, there is scant evidence to prove these ties, and the situation is complicated by the fuzzily-defined line between illegal and informal mining. 

In Colombia -- where artisanal miners claim the government does not differentiate between traditional mining without a license and operations controlled by criminal groups such as the Revolutionary Armed Forces of Colombia (FARC) and neo-paramilitary gang the Urabeños -- efforts to regulate the sector have proved difficult and controversial.  

The difficulties the Peruvian government will face in tackling this issue were underlined in March last year by mass protests that broke out in the Madre de Dios against a government decree declaring informal mining to be illegal.