Title: Illegal Gold Mining in Peru: A Push Toward Formalization?
Author/Institution: M. Kleinhenz, Lehigh University
Publication Year: 2017
Why Illegal Mining Persists Despite Repeated Formalization Initiatives
Kleinhenz’s thesis provides one of the earliest systematic examinations of why illegal and informal gold mining continues to expand in Peru despite more than a decade of policy interventions. Drawing on field data, government reports, and historical analysis, the study argues that informal mining is not simply the result of weak enforcement but the product of structural incentives, territorial vacuums, and economic dependencies. In regions such as Madre de Dios, Puno, and La Libertad, illegal mining operates as a parallel economic system—deeply embedded in local livelihoods and often more responsive to community needs than the state. Kleinhenz shows that Peru’s push toward formalization has been undermined by inconsistent policy design, overlapping regulations, and a chronic mismatch between legal requirements and the realities of small-scale miners’ technological and financial capacities. These dynamics illuminate why mechanisms like REINFO repeatedly fail to convert registrants into fully formal operators.
State Absence, Criminal Economies, and the Fragility of Territorial Governance
Methodologically, the thesis approaches illegal mining as a governance phenomenon, not just a criminal activity. Kleinhenz examines how the absence of state institutions in remote territories allows mining networks linked to criminal organizations—to establish control over land, supply chains, and even dispute resolution. This territorial authority displaces formal governance and complicates enforcement efforts, as seen today in areas like Pataz. The study also highlights how anti-immersion policies—raids, destruction of machinery, and military interventions—often produce only temporary disruption, as miners quickly relocate or rebuild operations. By analyzing the interplay between state capacity, economic incentives, and informal institutions, Kleinhenz demonstrates that formalization policies cannot succeed without addressing the territorial, environmental, and social systems that sustain illegal mining.
Implications for Formalization, Enforcement, and Long-Term Legitimacy
Kleinhenz’s findings are directly relevant to Peru’s current debates on REINFO extensions, illegal mining operatives, and the struggle to establish legitimate governance in mining regions. The thesis argues that formalization will not meaningfully reduce illegality unless it provides realistic, economically viable pathways for miners, integrates local communities into decision-making, and strengthens environmental and territorial institutions. Moreover, the research shows that enforcement alone—no matter how extensive—cannot secure long-term legitimacy if miners perceive the state as adversarial or disconnected from local realities. For policymakers and industry leaders, the lesson is clear: formalization must move beyond administrative registration and toward a multidimensional strategy that aligns legality, livelihoods, and environmental stewardship. Only by addressing these structural drivers can Peru shift from a cycle of illegality and conflict toward a model of mining that supports broad-based and sustainable stakeholder prosperity.