Peru’s informal diggers get permit extension through next year

Peru’s Congress approved a one-year extension for a controversial permit used by informal gold and copper miners to operate with looser requirements than the formal industry.

Congress voted to extend so-called Reinfo permits through the end of next year. The move is supported by President Jose Jeri, who still has to sign the bill, but opposed by the formal mining industry.

The temporary permits, which have existed for close to a decade, are meant to allow small-scale diggers to continue working while they formalize their operations.

Peru is South America’s top gold producer and ranks among the biggest producers of copper worldwide. Near-record prices have led hundreds of thousands of Peruvians to dig for the metals themselves, with pro-business think thank Peruvian Institute of Economics valuing illegal gold mining at $12 billion this year.

Reinfo permits have also pitted small miners against the large formal industry in Peru, as the two groups often battle for control of the same territories. But informal mining has sizable political support given how many jobs it provides in poor areas.

While Peru grants mining rights to protect the formal industry, politicians have begun discussing ways to revoke those rights and redistribute them with informal operators if they perceive concessions are being underutilized.

Territorial conflicts have impacted MMG Ltd.’s Las Bambas copper mine, Southern Copper Corp.’s Los Chancas project and Cia. Minera Poderosa SA’s mines in Pataz, where dozens of people have been killed in recent years in an open confrontation over gold.

(By Marcelo Rochabrun)