Peru's presidential runoff may hinge on small gold miners seeking continued loose regulations

LIMA, June 5 - The results of Peru's presidential election on Sunday could hinge on the votes of small, artisanal gold miners who benefit from loose regulations under an administrative program that was created in 2016 and originally slated to end in 2020.

The REINFO program, which allows small miners to operate without full environmental or operating permits, has been repeatedly extended as global gold prices surged and the informal mining sector expanded in size, value and influence.

There are now an estimated 500,000 informal miners in Peru producing about $11 billion worth of gold exports in 2025, about half the country's total. These miners form a vast economic and electoral bloc concentrated in rural regions that could tip the vote in Sunday's presidential runoff, which pits conservative Keiko Fujimori against leftist Roberto Sanchez.

Fujimori and Sanchez stand on opposite sides of the political spectrum, yet both are courting small miners. Polls show a tight race with a slight lead for Fujimori. In 2021, she lost to Pedro Castillo by around 45,000 votes, or 0.25%, and Sanchez enjoys support in the rural areas where Castillo won.

REINFO is set to expire on December 31, yet neither candidate appears willing or able to dismantle the program, which has morphed into a powerful pillar of Peruvian politics.

Supporters call REINFO an economic lifeline for millions in impoverished rural areas. Critics say it has created a shield of impunity for illegal mining and organized crime while driving widespread environmental damage.

A Reuters analysis of REINFO registry data and electoral records shows the small miners in the program have hedged their political bets, while the government has had a hard time purging bad actors.

The Sanchez campaign draws strength from the rural interior, where informal mining is widespread. Lima and surrounding urban areas tend to support Fujimori, who has courted the large mining companies that oppose the REINFO program, promising to crack down on illegal mining while modernizing the informal sector and expanding access to state credit.

Sanchez voted to extend REINFO as a legislator and proposed redistributing idle concessions to small-scale miners. Mining regions helped propel him to the runoff even after he trailed in first-round polls.

LACK OF INVESTMENT

Mining accounts for nearly 12% of GDP in Peru, a major global supplier of copper, gold and silver. Yet many mining regions lack basic infrastructure and public investment, a gap Sanchez has vowed to address.

“Thirty years of mining and the mining towns are still the poorest in our country,” Sanchez told Reuters.

Magna Ismael Palomino, coordinator of CONFEMIN, Peru's largest artisanal mining group, said small-scale miners and those along the value chain are backing Sanchez. Palomino said he would like idle concessions held by large companies to be reassigned to artisanal miners and wants REINFO extended by at least three years.

“We’ve realized that the economic power of big mining has set the governing agenda,” Palomino said. “They dictate how small, artisanal mining should be and want it to disappear.”

At the end of 2025, nearly 20 million hectares were under mining concessions in Peru, more than half held by medium and large companies. Only about 10% of this land was actively explored or mined, according to government and NGO data.

CONFEMIN and artisanal miners have mobilized rallies across mining regions in support of Sanchez. Data show millions of soles flowing from around 450 REINFO-linked individuals to political parties, though donations span the political spectrum and are often tied to regional races or self-financed campaigns.

“We reject that. We have never been accustomed to financing any congressman,” Palomino said. “We self-finance our mobilizations... but we have never had that bad habit of giving money in exchange for a project becoming viable.”

Iván Arenas, a mining consultant, said much political support is not formally reported.

“There’s indirect financing through logistics, mobilization, resources,” Arenas said, pointing to rallies organized by mining federations in support of Sanchez.

Large mining companies say the growing influence of informal mining is distorting both the political system and the industry.

Peru has about $63 billion in mining projects in the pipeline. Conflicts with informal miners have delayed some, notably the $2.6 billion Los Chancas project.

Raúl Jacob, finance vice president at Southern Copper, said the scale of informal mining revenues can “create or enable illegal avenues to obtain permits or certain legislation.”

Julia Torreblanca, head of Peru’s mining chamber, said political financing should be more transparent.

“Today, illegal mining is a more powerful economy than drug trafficking,” she said. “We need transparency on candidates and officials financed by this illegal economy.”

A SYSTEM THAT ENDURES

A Reuters analysis of more than 24,000 active REINFO permits showed that a 2025 purge of over 50,000 permit-holders accused of non-compliance left much of the system intact.

A total of 1,005 individuals whose personal permits were revoked now serve as legal representatives in companies with REINFO permits. Meanwhile, 1,255 companies had at least one permit revoked but continued operating with others.

The system regenerates quickly. Around 2,600 legal representative appointments in current REINFO companies were made in 2025 or 2026. Some individuals hold up to 20 permits across multiple companies and personal registrations. Foreign nationals and large firms also control multiple permits in a system originally designed for small-scale local miners.

Compañía Minera Agregados Calcáreos is the largest permit holder with 35 permits despite losing 13 permits in 2025. According to Peru’s SUNAT tax agency, it is owned by Holcim Peru, a subsidiary of Swiss cement giant Holcim, which did not respond to a request for comment. REUTERS