Peru changing its tactics on illegal mining

Despite all of the Peruvian government’s best efforts, illegal mining is alive and well in Peru. The government tried to institute a program to gradually formalize illegal miners and bring them over to the side of legality, but the program has failed to formalize more than a handful of miners and has been widely criticized for its delays and cost. The Peruvian authorities have also started cracking down on illegal mining operations by raiding camps and seizing equipment, famously staging a high-profile raid in Madre de Dios in late 2014. 

According to Peru21, the Peruvian executive branch is preparing a new approach: the Sunat, the Peruvian tax agency, will start applying special controls regarding the commercialization of products of illegal mining. For example, the Sunat will require that people who acquire gold to certify its origin, as the Peruvian authorities have seen that throughout the supply chain, illegal gold has been freely mixed in with gold that was legally mined. With this new power, the Sunat will be able to seize metals, equipment, and machines, with proceeds transferred to the Fund for Environmental Remediation, to treat the damages caused by illegal mining.

Gestion, a Peruvian business journal, published an interview with Paul Loomis, Peru editor for the investors’ journal The Business Year. He explained that 2014 and 2015 are a time of transition for the Peruvian economy and the country as a whole, as the fall in mineral prices gives the country a chance to reexamine the fundamentals of its economy. He stressed that this analysis will determine the country’s growth for the next ten years.