We all know that illegal mining is a problem in many parts of the mining world, but shocking figures have come from a recent report in Peru’s prestigious economics publication, Gestión, that illegal mining in that country generates more money than the illegal drugs trade. Peru’s illegal mining industry continues to hurt the environment and the economy of the country. According to Gestión, illegal gold mining generates about $1 billion in profits a year, and fails to contribute around $305 million in taxes.Although Peru’s gold production has been decreasing since 2005, exports have not followed the same trend, according to Elmer Cuba, Managing Partner at Macroconsult. He told Gestión: “The volume of exports of gold from illegal sources is at least $1.8 billion, more than drug trafficking which reaches $1.208 billion; illegal gold beats cocaine.”

He explained that of the total 5 Moz/y in gold exports, 1 Moz comes from unknown sources. He continued that “22% of the gold that is exported is illegal, and there is the discrepancy between falling production and increase in shipments.”

He added that although nationwide 1 out of 5 oz of gold were from an illegal source, in Madre de Dios 1 out of every 3 oz was from illegal mining.

It is estimated that overall, the country’s illegal mining industry directly employs around 100,000 people, and indirectly helps employ 400,000.

According to the Ministry of Environment, illegal gold mining has destroyed about 18,000 ha of the Amazon territory in Peru.