Context and Economic Impact
On October 3, 2025, the Peruvian Institute of Economics (IPE) issued a warning that illegal mining has become the single largest threat to Peru’s formal mining sector—surpassing bureaucratic delays and social conflicts. According to Víctor Fuentes, IPE’s Public Policy Manager, the expansion of illegal mining has paralyzed three major copper projects: Haquira and Los Chancas in Apurímac, and Michiquillay in Cajamarca. Together, these represent over US$ 7 billion in potential investment, equivalent to 10% of the country’s total mining project portfolio. Fuentes explained that persistently high international gold prices—above US$ 3,700 per ounce continue to fuel the profitability and expansion of illegal operations nationwide.
Regulatory Challenges and Structural Weaknesses
Fuentes emphasized that illegal mining not only disrupts existing operations but also deters the development of new projects. He urged the government to close the Comprehensive Mining Formalization Registry (Reinfo), describing it as the “spearhead of illegality” that allows informal miners to operate under weak oversight. Strengthening traceability systems across the gold supply chain, he argued, is crucial to combating money laundering and environmental degradation. The IPE also highlighted that bureaucratic inefficiency continues to hinder formal mining, with permitting processes that can last up to 40 years from exploration to production. Agencies like SENACE, which manages environmental certifications, operate with only S/ 67 million (about US$ 18 million) in annual funding to oversee a US$ 67 billion mining portfolio, underscoring the urgent need for institutional strengthening.
Strategic Outlook and Policy Implications
The IPE identified the Tía María copper project as a potential turning point for Peru’s mining future, capable of revitalizing investment in the southern corridor amid rising global demand for critical minerals. Fuentes warned, however, that without decisive action to confront illegality and streamline formal investment procedures, Peru risks losing competitiveness and credibility as a mining destination. He also criticized the recent financial bailout of Petroperú, noting that “debt has been issued to pay off previous debt,” diverting scarce public resources from social priorities. The analysis concludes that Peru stands at a crossroads: the sector’s recovery and contribution to national development depend on reasserting state authority, closing pathways for illegal mining, and restoring investor confidence through transparent and efficient governance.