During my time as a diplomat in Peru, I had the opportunity to survey illegal gold mining areas by air, invited by the U.S. Embassy in Peru along with other diplomats. The view of the Amazon from the plane remains etched in my memory. Amid the endless expanse of tropical rainforest, patches of land were deeply excavated, revealing the ruthless destruction of the forest in the pursuit of gold. I have often wondered if such devastated nature can ever be restored to its original state. The sorrow from that sight has lingered with me.
What struck me most at the time was the deforestation. However, as I delved deeper into the realities of illegal gold mining, I realized the issues were far more complex. Mercury used in gold extraction contaminates rivers and soil, and human rights violations occur around mining sites. Criminal organizations control the mines and transportation routes, reaping enormous profits. Environmental destruction, human rights abuses, and organized crime are interconnected within an illegal economy.
In Latin America, organized crime is no longer solely about drug trafficking. Illegal mining, including gold extraction, has emerged as a major revenue source for criminal organizations, threatening the lives of local residents as well as legitimate mining development and investment. As countries worldwide seek to secure essential minerals for energy transition and advanced industries, new opportunities arise in Latin America. However, the spread of illegal mining during a time when resources should be used to enhance national wealth and industrial growth presents a serious paradox.
Gold: A Funding Source for Criminal Organizations
Gold is an attractive commodity for criminal organizations. It is highly valuable, easy to transport, and difficult to trace when mixed with refined or legally mined gold. With international gold prices soaring, the profitability of illegal mining is also increasing.
According to the Peruvian Economic Institute (IPE), an estimated 54% of gold exports from Peru in the first half of 2026 originated from illegal mining. While this figure is based on estimates derived from discrepancies between official production and export figures, it illustrates the extent of illegal mining's expansion. The International Monetary Fund (IMF) also identified Peru as the largest exporter of illegal gold in Latin America in its 2026 report.
Criminal organizations either operate mines directly or collect protection fees from miners, using the proceeds to purchase weapons and expand their operations. In Colombia, factions of the National Liberation Army (ELN) and former members of the Revolutionary Armed Forces of Colombia (FARC) have profited from both drug trafficking and illegal gold mining. Although drugs and gold are different commodities, both serve as crucial funding sources for criminal organizations. Thus, merely intensifying drug enforcement will not eliminate the economic foundations of these groups.
In southern Venezuela, the activities of criminal organizations and armed groups surrounding illegal gold mining have also been highlighted as a serious issue. The International Crisis Group (ICG) pointed out in a 2025 report that profits from illegal mining flow to criminal organizations and armed groups, with some government officials allegedly involved in or protecting illegal mining operations. The intertwining of illegal economies with corruption raises concerns about the weakening of the state's law enforcement capabilities.
The problem is that illegal mining does not end at the mining sites. If illegal networks infiltrate the production, transportation, refining, and export processes of gold, criminal proceeds can flow into the legitimate economy. Even if mines are closed, if structures for purchasing gold and laundering money remain, illegal mining will not be easily eradicated.
Forests, Rivers, and Residents' Lives Are the First to Suffer
The individuals most directly affected by illegal gold mining are those living near the mines. If mercury used in gold extraction is not properly managed, it contaminates rivers and soil, threatening the health of residents through the food chain. For indigenous communities that rely on rivers and forests for survival, this is a matter of life and death. In some mining areas, forced labor, human trafficking, and sexual exploitation of women and children occur. Illegal mining is not merely an environmental crime; it also infringes upon human dignity and basic rights.
According to the Andes Amazon Monitoring Project (MAAP), by mid-2025, approximately 139,000 hectares of forest in the Peruvian Amazon had been damaged due to gold mining, an area more than twice the size of Seoul. Of this, 97.5% is concentrated in the southern Madre de Dios region. While this figure includes damage from legal mining, it clearly indicates the significant burden that gold mining places on the Amazon's forests and ecosystems.
The Amazon is a crucial ecosystem that stores carbon, circulates moisture, and maintains global biodiversity. The forest is already under pressure from agricultural expansion, logging, and climate change, and illegal mining adds to this burden. The damage extends beyond local residents to impact the international community.
Distinguishing Between Illegal and Informal Mining Is Key to Finding Solutions
It is essential to differentiate between illegal mining and informal mining. In Peru, illegal mining refers to activities conducted in prohibited areas or in violation of legal requirements. In contrast, informal mining refers to small-scale operations that are in the process of legalizing their activities in areas where mining is permitted but not yet formally recognized. This distinction is based on Peru's legal framework, and definitions may vary in other Latin American countries.
Not all informal mining activities are lawful, and being in the process of legalization does not exempt them from responsibility for environmental pollution or other illegal acts. Conversely, it is unjust to label all small-scale miners as criminals simply because they lack formal permits. The legal status of mining operations and the involvement of criminal organizations must be assessed separately.
This complexity is illustrated by Peru's REINFO system, which was introduced to incorporate informal mining into the formal economy. However, it has faced criticism for repeated deadline extensions and limitations in oversight, leading some operators to exploit the system. In late 2025, legislation was enacted to extend the deadline for the legalization process until the end of 2026. Nevertheless, we cannot ignore the realities of residents who engage in mining for their livelihoods while pursuing legalization. Support should be provided for those seeking to transition to legitimate economic activities, while strict measures must be taken against illegal operators who exploit the system.
Impacting Legitimate Investment and Resource Development
Illegal mining is no longer limited to gold. The IMF noted in its 2026 economic analysis of Peru that illegal mining is expanding into the copper sector. In 2024, illegal copper mining was estimated to account for up to 5% of Peru's copper exports, according to IMF staff. Additionally, IPE reported that illegal mining is affecting approximately $12 billion worth of mining development projects. Illegal mining, mining rights violations, and threats to mining operations can deter exploration, development, and investment, undermining the country's growth potential.
In July 2025, informal miners in Peru blocked transportation routes to major copper mines, demanding an extension of the legalization process. This disruption caused logistical challenges for businesses. However, it is important not to hastily categorize this protest as merely an act of illegal mining or organized crime. The conflict stemmed from interests surrounding the legalization process. Residents opposing mining development due to concerns over environmental pollution or land rights may also be exercising legitimate rights.
The issue arises when criminal organizations seize control of mines and transportation routes or threaten companies to protect the profits gained from illegal mining. If the state fails to control such actions, legitimate mining development becomes unstable, and investors must consider the associated risks. If resources cannot be developed sustainably and the benefits cannot be translated into jobs, income, and industrial competitiveness, even abundant mineral resources will struggle to drive national development.
This is not just a distant issue for South Korea. The country is expanding supply chain cooperation between its mineral resources in Latin America and its advanced manufacturing sector. However, securing stable mineral supplies is not determined solely by reserves. The security of mining regions, protection of mining rights, stability of permitting systems, and relationships with local communities are critical to the success of business ventures. There is also a risk that illegally mined minerals could infiltrate legitimate supply chains. Therefore, enhancing transparency in the production and distribution processes of minerals and supporting responsible resource development is crucial.
Beyond Enforcement: Cutting the Links of Criminal Profits
Countries in Latin America are intensifying enforcement efforts by deploying military and police to close illegal mines and seize equipment. However, on-the-ground enforcement alone is insufficient. As long as international gold prices remain high and the potential for enormous illegal profits exists, new participants will continue to be incentivized to enter the market.
The focus of the response should be on cutting off the financial lifelines of criminal organizations. It is essential to trace the origins of gold from mines and track the refining and exporting processes, preventing money laundering and corruption at the stages of purchase, refining, and export. Given the transnational nature of these crimes, international cooperation in information sharing and financial and judicial collaboration is also vital.
At the same time, we must acknowledge the reality that there are limited livelihood options in remote mining areas. If we fail to distinguish between enforcement against criminal organizations and the livelihood issues of residents, it will be challenging to establish sustainable solutions. Policies that support the legalization of small-scale mining and provide new job opportunities and development prospects for local residents must be pursued concurrently.
The scars of the Amazon that I viewed from above remain vivid in my memory. At that time, I felt sorrow for the destroyed forests, but now I also see the underlying issues of the criminal economy, human rights abuses, and national development. To transform Latin America's abundant resources into genuine opportunities for development, it is essential to cut off the illegal profits of criminal organizations and ensure that the wealth generated from resources translates into improved lives for residents and national prosperity.
Author's Key Background
Former diplomat specializing in Latin America, Honorary Professor at Trujillo National University in Peru, Senior Advisor at Dentons Cardenas & Cardenas law firm in Colombia.
* This article has been translated by AI.
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