How gold surpassed cocaine as Peru’s most profitable criminal industry

“Halt, stop right there,” shouts a Peruvian Navy Seal, firing warning shots into the air. But the fleeing man pays no attention, scrambling up to the rim of a football pitch-sized crater and disappearing into the dense rainforest as the commandos give chase, swearing and shooting.

Meanwhile, other marines set dynamite charges on a makeshift wooden raft that floats in the crater, which is essentially an enormous pit of opaque, stagnant water. The raft has a diesel-fuelled suction pump motor with thick plastic tubing used to suck up and sift through river sediment for tiny particles of gold.

Soon after, a mushroom of orange and black fumes envelops the trees – and seconds later comes the sound of the explosion, shattering the peace of the Tambopata National Reserve, one of Peru’s most prized Amazon parks.

Located in the south-eastern Madre de Dios region, the reserve is visited by about 40,000 tourists a year, many of whom stay in luxurious ecolodges further down the Malinowski River that marks the Tambopata park’s northern border. But today eight patrols are moving along the river, by helicopter or boat – and every few hundred metres they encounter more evidence of illegal gold mining, operations that have laid waste to more than 500 hectares of the park’s rainforest in the last year, according to satellite mapping data from Amazon Conservation. In total, more than 140,000 hectares have been lost to mining in Madre de Dios – a shocking 97.5% of the total deforestation caused by mining in Peru’s Amazon rainforest, an area twice the size of the US state of California.

Military crackdowns on illegal mining in the Amazon are not new in Peru. But the skyrocketing international price of gold has caused this destructive activity to spread, empowering local gangs and attracting transnational organised crime. “Dirty” gold has become the country’s most profitable illicit industry, even surpassing drug trafficking in the world’s second-biggest producer of cocaine after Colombia.

“Gold prices have risen,” said Gen Víctor Cotrina, the military commander of Madre de Dios, who is leading the crackdown on illegal gold mining. “That’s why, if a miner’s motor is destroyed, he’ll replace it quickly because gold is at its peak price; the very next day he’s back to his mining activities. He’s back at work again.”

For troops used to combating drug trafficking by targeting well-hidden plantations of coca, which is used to make cocaine, the fight against illegal gold presents new challenges as the end product is not an illicit drug but a legally traded commodity, Cotrina said. “The difference is that an open-pit mining operation doesn’t require covert operations, whereas drug trafficking does.” He said previous anti-mining crackdowns had been ineffective due to corruption and patchy enforcement. But now, with “aerial surveillance and military personnel who are available 24/7 to conduct patrols, we are determined to eliminate mining in this region”.

According to Peru’s financial supervisory body, illegal gold mining is the top illicit finance threat to the country. For the first time, the illegal trade surpassed the legal production of gold in the first half of this year, according to the Peruvian Economics Institute think tank, which estimates it could reach as much as $18 billion in value by the end of 2026. The country’s Financial Investigation Unit found that illegal mining accounted for nearly 60% of all investigations in terms of value between 2021 and 2025 – far higher than drug trafficking (8%) or tax crimes (4%).

The evidence is not difficult to find or destroy. Behind the wall of green that marks the edge of the reserve, troops and environmental prosecutors set ablaze a network of well-supplied mining camps, built with timber and blue tarpaulins and stocked with food and beer. In one location they find a jungle brothel with wooden tables, a bar counter, a stereo and a giant teddy bear, a shower still wet with beauty products inside. A lone cockerel crows as the abandoned camps go up in flames.

But during four days of operations in late August, prosecutors arrested just a handful of suspects. Two women had been left behind by the fleeing miners: Andrea, 30, wept as she begged the officers not to arrest her, explaining she was a single mother who had been working as a cook and could find no other work to support a sick mother and two children. Liz Compi, 20, was found sitting on a boat with her one-year-old son. She said she had taken the job as a cook for $450 a month after being abandoned by her partner and sacked from a previous job.

Authorities took both women back to the city and released them. Ronal Flores, a deputy prosecutor for Peru’s Office of the attorney Ggeneral who helped to rescue Compi, said it was pointless to arrest most workers at the camps as they tended to have no knowledge of the workings of the much bigger illicit enterprise. Many are left behind to sink motors in the river to avoid detection; even hours later, the machines can be winched up with pulleys and put back to work.

“In these places, the big fish – the owners – are rarely caught. It’s usually the low-level operatives who we find,” said Flores, a short, energetic man with a black moustache who led the operations on behalf of the Public Prosecutor’s Office backed by the US non-profit Global Conservation. He admitted that they could only slow the pace of the rainforest’s destruction, but that the state agencies lacked the budget to maintain the intensity of raids, even though the military destroyed and seized an estimated $500m in machinery, supplies and illegal dredgers, according to government figures.

Flores said the raids had destroyed about 150 mining barges and motors in the Amazon park, but that was “nothing compared to the magnitude of the damage being caused within the reserve”.

A single mining dredger, operating 24 hours a day, can produce as much as 50 grams of gold – which, with the price of gold at more than $4,650 a troy ounce in late August (having peaked at roughly $5,600 an ounce in late January), could fetch more than $6,000 in Madre de Dios.

Since the beginning of Covid-19 pandemic, the price of gold has tripled. Tens of thousands of miners have poured into protected Amazon parks and Indigenous reserves, stripping away vast tracts of rainforest and leaving behind a denuded, pocked terrain, stagnant pools and disrupted river courses. Mercury is the cheapest and easiest way to extract gold because it binds with the particles in the river sediment. As a result, an estimated 180 tonnes of the toxic metal contaminates Peru’s waterways every year, poisoning wildlife and damaging human health, particularly among Indigenous communities that depend principally on freshwater fish as their main protein source.

The latest raids, dubbed Operación Mercurio II, follow on from an earlier iteration, Operación Mercurio, which began in 2019 and achieved a 62% overall reduction in illegal mining deforestation, including a 92% drop in the most critical illegal hub, La Pampa. But the miners returned to La Pampa and deforestation surged, while extortion and hired killings spiralled as a local gang, Los Guardianes de la Trocha, took control of the $1bn trade.

The dirty gold departs Peru as contraband to Bolivia and Brazil, but much of it is laundered into the legal trade via a controversial registration system called Reinfo. The system, in theory, should bring informal miners into the legal economy, but critics say it allows them to continue working without environmental permits and laundering illegal gold through formal companies. The trade is so lucrative that members of Congress have backed five repeated extensions of Reinfo, despite pushes to reform or eliminate the registry.

“The government’s response is moving very slowly,” said Flores after another day of relatively fruitless jungle raids, destroying camps that are likely to spring back up soon after. “Meanwhile, illegal mining operates 24 hours a day. The miners measure time in grams, not minutes, so we need to rethink how we investigate mining,” he said. “Unfortunately, as we can see today, they are getting the better of us.”