The figures indicate that the illicit export of gold in the country registered US$4,833 million in 2023. Photo: Composition LR/Rsvponline. | Photo: Composition LR/Rsvponline.
Illegal mining is a growing problem in South America, where the extraction and export of gold without adequate regulations affects both the economy and the environment. The increase in demand for gold and institutional weakness in the region facilitated the proliferation of this illicit activity, which resulted in the devastation of vast natural areas and the loss of tax revenues.
In particular, the illegal extraction of gold in the country of South America —the main exporter in the region— found lucrative markets mainly in nations such as India and United Arab Emirates, according to the investigation carried out by Ojo Público. These markets emerged as primary destinations for informally mined gold, exacerbating governance and sustainability challenges in the region.
According to a report by a non-profit organization, the South American nation exports the 44% of illegal gold in the region, which translates into billions of dollars in illicit trade. It should be noted that although the United States and Swiss had been the main importers of gold in this South American country, the recent report determined that this situation changed.
Illegal mining in South America has serious environmental and social implications. Photo: Concept.
Which country in South America exports the most illegal gold to the world?
Peru It leads the export of illegal gold in South America and surpasses other countries such as Colombia and Bolivia. The figures of Peruvian Institute of Economics (IPE) indicate that the illicit export of gold registered US$4,833 million in 2023. This increase is due to several factors, including the rise in the price of gold per gram, which has multiplied seven times since 2000, and the growing demand from international markets.
The export of illegal gold allows Peru to surpass the legal gold exports made by Brazil, Bolivia, Colombia, Ecuador and Venezuela combined. Graphic: Public Eye.
The Swiss criminologist Mark Piethin his book ‘Gold panning’details how illegal gold from Peru reaches refineries in Switzerland, responsible for 70% of the world’s gold refining. Illegal mining in Peru has serious environmental and social implications, especially in regions like Madre de Dios, where deforestation and mercury pollution are critical problems.
Since 2021, Peru It had 13 Interior Ministers, which made it difficult to implement continuous and effective policies against illegal mining. The lack of international coordination also allowed illegal gold to flow freely across borders, with neighboring countries such as Boliviawhich facilitates the smuggling of chemical inputs necessary for gold extraction.
The South American nation exports 44% of the region’s illegal gold. Graphic: Public Eye.
In this context, the export of illegal gold allows Peru to surpass the legal gold exports made by Brazil, Bolivia, Colombia, Ecuador and Venezuela together. According to the report, an increasingly smaller portion of exported gold goes to USA and Swissheading in greater proportion to India and the United Arab Emirates.
The country found lucrative markets primarily in nations such as India and the United Arab Emirates. Photo: The Universe.
India and the Arab Emirates, main destinations for illegal Peruvian gold
India and the United Arab Emirates became the main destinations for illegal Peruvian gold. According to research by Public Eye, many companies in these countries buy gold from Peruvian suppliers linked to illegal mining and money laundering. This gold is extracted illegally in the Peruvian Amazon, transported to Lima and then exported with falsified documentation.
In the case of India, companies like Kundan Care Products Ltd. and Kundan Refinery Private Ltd. They have been accused of receiving gold from suppliers linked to illegal mining, in addition to money laundering. On the United Arab Emirates side, this type of exports have increased since 2014.
Why does illegal mining continue to grow?
Illegal mining continues to grow thanks to the smuggling of chemical inputs, which underlines the need for high coordination between neighboring countries to combat this activity. A decade ago, Peru implemented stricter controls on restricted chemical inputs essential for illegal mining, such as mercury. However, weak regulation in Bolivia on the marketing of these products allowed smuggling from that country to increase, complicating Peruvian efforts to control the situation.
The rise in international mineral prices could trigger a new cycle of investments in the mining sector, generating more employment, economic growth, tax revenues and poverty reduction. However, this same phenomenon could also encourage an increase in illegal mining activity. Without clear leadership and an intersectoral and cross-border strategy, with concrete indicators to combat illegal mining, the damage it causes to society will continue to expand.
