Peru’s ‘Mining Mafia’ Seek To Legalize Their Operations

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Peruvian “mafias” with extensive illegal mining interests are seeking to formalize those operations, according to the government, drawing attention to the fine line between informal and illegal mining.

A report by El Comercio newspaper describes how various “gold capos” are on a government list of concession title holders, aiming to convert their criminal operations into legal ones. On the list are the names Gregoria Casas Huamanhuillca, alias “Goya”, and Cecilio Baca Fernandez, alias “Baca,” an ex-husband and wife whom El Comercio describes as “founding the empire of illegal mining,” and who have been investigated for money laundering.

Environment Minister Manuel Pulgar-Vidal acknowledged that the names had been included, but blamed it on “errors that regional governments make” and said they must be removed. However the regional director from the Energy and Mines Ministry, Milner Oyola, told El Comercio that Baca and his family were among 5,000 informal miners who had completed the necessary procedures in the formalization process. “Everyone has equal rights and they shouldn’t be excluded.”

It was also reported that six men and four women had been caught at Lima’s Jorge Chavez airport carrying more than $4 million in illegal mining profits in their suitcases.

InSight Crime Analysis

Illegal mining is huge business in Peru, estimated last year to be worth more financially than the cocaine trade. That does not mean it is more of a security issue. Although there have been some reports of links between the illegal mining sector and drug trafficking groups, the trade is not dominated by criminal groups as it is in other countries, particularly Colombia.

Instead, in Peru much of it is simply informal, a somewhat inevitable situation in areas where there is no state presence. Madre de Dios, a southeastern jungle region which is Peru’s gold mining heartland, has few roads, no fiscal controls and no banks, yet more than $27 million dollars is estimated to move through just one department in the area monthly. Baca and Casas are thought to control more than 2,000 hectares of illegal mining in the region.

While debatable to what extent criminal groups are involved, it’s undeniable that informal gold mining has devastated thousands of hectares of Peruvian rainforest and employs thousands of people in highly unsafe conditions, generating huge personal — and illegal profits — for barons such as Baca and Goya, and so any moves to formalize the sector should be welcomed. 

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