Mining in Peru kicked off in the late 1800’s. The first boom, or “gold rush”, occurred between 1930 and 1960. The miners were mostly locals from Madre de Dios, although some people came from other parts of the country.

In 1971 the government passed the first law to regulate gold commercialization. It recognized and defined small and artisanal mining. In the 1980s a second gold rush began. This time it spawned a massive migration of workers. People came from all over from the southern regions of Peru. It alarmed and motivated existing mining companies to join forces to protect their claims. In 2002, a new law created a way for of small and artisanal mines to legalize themselves.

In 2007 a spike in the price of gold boosted mining activity. The outcome: a third gold rush. In 2009, new regulations labeled a series of gold extraction methods as illegal. This angered artisanal miners who argued that the new rules made it impossible for them to work legally.  

Peru’s gold booms didn’t just bring gold seekers. It also attracted lots of people looking for work of any kind – and, of course, criminals looking for fast money. Soon there was also a boom in corruption and illegal activities, such as human trafficking, illicit land-dealing, and fuel smuggling.

Fuel Contraband

Irregularities and contradictions in laws

Decrease in GDP
Rising unemployment and crime
Pollution and deforestation  

An investigation led by Peruvian newspaper, El Comercio, estimates that in 2013, 180,000 gallons of fuel entered Madre de Dios daily. Only 15% ended up in recognized filling stations. The rest was siphoned off to the illegal mines. Between 2009 and 2012, fuel sales in the region rose from 682,000 barrels to 1,155,000.

Also, according to OSINERGMIN (Organismo Supervisor de la Inversión en Energía y Minería – a public entity that monitors the activity of all energy related transactions), the number of gas stations in the region increased from 12 in 2010 to 48 in 2013.

The findings also suggest that fuel for illegal mining in Madre de Dios was smuggled across the border from Bolivia. The rise in fuel contraband has been blamed on a law that sets limits and controls on how much fuel gas stations can stock, creating a dearth even as more miners arrive. It’s also driven fuel prices up. In Bolivia, a liter of fuel costs around US $ 0.54, while in Peru it costs between US $ 1.15 and US $ 1.6 (as of 2012).

Locals complain that the government has passed laws making most artisanal mining illegal while allowing more gas stations in and around the regional capital, Puerto Maldonado. This, they say, only encourages more mining.  There are now lots of places selling fuel under the table without respecting safety standards. They endanger workers and the public, and damage the environment.

References  Pg.236 – Pg.303