Peru is facing a massive turning point in its gold business. According to calculations by the Instituto Peruano de Economía (IPE), more gold is now coming from illegal production than from legal sources. Billions of dollars are at stake – and illegal mining continues to spread.
The figures are staggering: In the first half of 2026, IPE calculations show that 54 percent of the gold volume exported from Peru was of illegal origin. For the first time, this amount exceeded legal production, with a difference of 8.7 tons. While the volume of illegal origin increased by 19.4 percent compared to the same period last year, legal production fell by 5.9 percent.
This is an IPE calculation. The institute determines the scale by, among other things, the difference between the quantities of gold exported and the production officially registered with the Peruvian Ministry of Energy and Mines. Gold without traceable proof of production can enter regular exports via processing and trading chains.
Up to 120 tons of illegal gold
The IPE expects at least 110 tons of gold of illegal origin for 2026. This amount could even rise to over 120 tons. This would mean that between 52 and 55 percent of all gold exported by Peru could have an illegal origin. Even in 2025, according to the institute's calculations, legal and illegal quantities were nearly on par.
A business worth up to 18 billion dollars
The high gold price makes the business even more lucrative. According to data used by the IPE, the average gold price in 2026 has so far been around 4,500 US dollars per ounce. That was 44 percent higher than in the corresponding period of the previous year.
The IPE estimates the value of gold of illegal origin exported in 2026 at at least 16 billion US dollars. With a higher production volume and corresponding gold price, this could even reach more than 18 billion US dollars. For 2025, the institute had calculated around 11.5 billion US dollars.
Puno, La Libertad, and Madre de Dios in focus
Illegal mining has long ceased to be a problem in just a single region. The IPE identifies Puno, La Libertad, and Madre de Dios, among others, as areas with intense activity. PeruMagazin provides an overview of the affected parts of the country at Regions, places and sights in Peru.
The situation in La Libertad is particularly critical. There, the formal mine Poderosa is also affected by the consequences of illegal activities. In Apurímac, the surroundings of the Las Bambas mining complex are mentioned. Areas of future large-scale projects are also coming under pressure, including Conga and Michiquillay in Cajamarca, as well as Los Chancas and Haquira. According to IPE calculations, mining projects with a total investment volume of more than 12 billion US dollars are at risk.
The north of Peru, in particular, is also affected by this. Further background information on this part of the country can be found on the PeruMagazin page North Peru.
REINFO: Only two percent formalized after ten years
The Registro Integral de Formalización Minera (REINFO) plays a key role. The register was created in 2016 to lead small-scale and artisanal mining operations into legality. According to the IPE, only about two percent of those registered have completed the formalization process. At the same time, the system's duration has already been extended five times.
According to the IPE, gold of illegal origin can enter regular supply chains via processing plants and trading companies. Therefore, it is not only crucial who extracts the gold from the ground, but also how it is transported, processed, documented, and finally exported.
Illegal gold ends up in legal trade
Illegally mined gold does not have to leave Peru via secret paths. On its way to export, it can be provided with documents, processed, and then sold through companies that are part of the regular economy.
This makes combatting it significantly more difficult. The police and the public prosecutor's office are only one part of state control. The tax authority SUNAT and the Peruvian Financial Intelligence Unit (UIF) also have information on cash flows, transport, machinery, operating supplies, and companies. The IPE therefore demands much stronger traceability of gold.
Protected areas also under pressure
The consequences are not limited to tax losses or competition for legal mining companies. According to the IPE, the activity is also spreading into areas where mining is restricted or prohibited. This includes nature reserves, indigenous reserves, and archaeological zones. Thus, the economic problem simultaneously becomes an environmental, security, and cultural heritage issue.
Peru faces a multi-billion dollar question
Peru is one of the most important mining countries in the world. However, a second economy is now emerging alongside officially registered production in the gold sector. If the IPE's calculations for 2026 are confirmed, more than 110 tons of gold of illegal origin could enter the market. With a value of at least 16 billion US dollars, illegal gold mining would long have ceased to be a marginal phenomenon.
The crucial question is therefore not just how many illegal mines are closed. The decisive factor will be whether Peru can trace where its gold actually comes from and the path it takes into international trade.
Facts and figures
54 percent: Share of illegal gold in the exported volume in the first half of 2026 according to IPE calculations.
8.7 tons: Lead over legal production in the first half of the year.
110 to over 120 tons: Expected quantity of illegal origin for 2026.
16 to over 18 billion US dollars: Estimated export value for 2026.
19.4 percent: Growth of the illegal volume in the first half of the year.
5.9 percent: Decline in legal gold production.
2 percent: Share of REINFO registrants who, according to the IPE, have completed formalization.
More than 12 billion US dollars: Investment volume of endangered projects.
Instituto Peruano de Economía (IPE)
Gestión, September 17, 2026
RPP, September 17, 2026
El Comercio, September 17, 2026
Image source: Agencia Andina / Difusión
