High Fuel Demand Highlights Illegal Mining in Peru Amazon

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An estimated 85 percent of fuel oil sold in the Amazonian Madre de Dios region of Peru is allegedly used in illegal gold mining, an illustration of how the industry is flourishing in an organized crime hotspot.

According to newspaper El Comercio more than 180,000 gallons of oil enter the region each day, but only 15 percent of the fuel is used in automobiles. The remaining 85 percent is directed into the informal mining sector, with the demand from this industry making fuel demand in the region a hundred times greater than in Lima. Fuel oil also represents 15 percent of expenses for those involved in the mining industry, with mining machinery requiring 70 to 80 gallons of fuel per day, according to the newspaper.

Demand has continued to rise, with 1.15 million barrels sold to the region in 2012, compared to 682,000 barrels in 2009. Similarly, the number of gas stations quadrupled from 2010 to 2012, from 12 in 2010 to 48 in 2012, a trend facilitated by the ease of gas station licensing, reported El Comercio.

Environment Minister Manuel Pulgar Vidal agreed that the unregulated flow of fuel to the region was a serious problem, with miners licensed as fuel providers able to legally buy the large quantities of fuel needed for their illegal business. He also said that the government was already taking steps to tackle the problem.

InSight Crime Analysis

The Madre de Dios region of Peru, on the border with Bolivia and Brazil, is a hub for criminal activity including sex trafficking, cocaine smuggling, and illegal gold mining. The region produces a fifth of the country’s gold, and according to a government estimate 97 percent of 18,000 people involved in mining in the region are unregistered.

A security analyst claimed last year that clear links existed between the region’s drug trafficking and illegal mining industries, as seen in Colombia where criminal organizations control much of the illegal gold mining.

El Comercio’s report highlights the difficulties in regulating the industry. In March 2012, riots broke out after the government signed a decree to criminalize informal mining. The rising demand for fuel indicates that illegal mining has continued unabated.

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