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Decision and Policy Analysis Research Area – DAPA

The Devastating Costs of the Rush for Gold in Madre de Dios, Peru

The continuous surge in gold prices has lead to a rapid expansion of mining activities on alluvial soils in recent years. This phenomenon brings enormous costs to human health and the environment. One example in this sense is the region (or department) of Madre de Dios in Peru, an area part of the world’s most extensive tropical forest ecosystem, the Amazon Basin. The number of unapproved mining activities have increased drastically in recent years here, contributing to significant losses of habitat. Indeed, roughly 7,000 ha of pristine forest and wetlands were cleared on two large mining sites between 2003 and 2009 as shown by Swenson et al (2011). Terra-i illustrates that between 2004 and 2011 the region of Madre de Dios lost 28,369 ha of natural vegetative cover, an area equivalent to the surface of the Maldives. Alarming deforestation rates were registered in the Provinces of Manu and Tambopata, where mining activities have expanded considerably since 2005 (Figure 1). These results go along the FAO Forest Resources Assessments (FRA) and others scientific findings according to which the highest deforestation rates and changes in natural vegetative cover have been registered in those regions where gold prices have risen dramatically.

Figure 1. Left, Terra-i land use change detection map, zoomed on deforestation hotspots on the mining region in the provinces of Manu and Tambopata in the Region of Madre de Dios (Peru), between 2004-2011 (yellow to red spots); Main mining areas in the region denoted by “A”, for Guacamayo, “B” Colorado-Puquiri, and “C”, Huepetuhe. Right, aerial photos for the mining areas “A” and “B”. Photos source: mongabay.com

An emerging economy, a general overview of Peru

Peru’s economy has experienced a notable period of growth in the last five years, which makes it one of the fastest growing economy in the region. The country has one of the most important timber reserves in the world, being the world’s fourth largest country in terms of tropical forest cover. It also hosts the second largest tropical forest area in the Amazon basin (after Brazil).

Even if deforestation rates are relatively low in Peru, the annual deforestation rate has increased considerably – from 0.14% (of the total national forest cover) between 2000 and 2005 to 0.22% between 2005 and 2010, according to FAO statistics. Moreover, forest loss accounts for 47.5% of the country’s total greenhouse gas emissions. Among the main drivers of deforestation and degradation identified by the Ministry of Environment are: illegal land use changes for agriculture, shifting slash-and-burn agriculture, cattle farming, human settlements, illegal mining, and mismanagement of road infrastructure.

In 2011 Peru was one of the top 6 world gold producers. However, according to the Superintendencia Nacional de Aduanas del Peru and Swenson et al (2011), a large amount of the Peruvian gold has been extracted by illegal businesses that use extraction methods based on heavy metal, such as mercury. Such practices are far of being sustainable and have a strong negative impact on the environment. Moreover, as Figure 2 shows, the boost in gold price led to an exponential increase of the illegal mining area, followed by a sharp rise of mercury imports. Additionally, improvements in the road infrastructures in the region, such as the Interoceanic Highway (connecting Peru and Brazil) have been facilitating the extraction process.

Figure 2. Relation between international biweekly gold prices, forest conversion to mining area in Madre de Dios and annual mercury imports to Peru for the period 2002-2010.Source: Swenson et al (2011).

The case of Madre de Dios

Madre de Dios occupies Peru’s lowland Amazon and was declared “Capital of Biodiversity’’ under the Peruvian law (No. 26311). Additionally, it hosts the Manu National Park, the largest national park in Peru with an area of about 1,700,000 hectares, designated as World Heritage Site by the United Nations Educational, Scientific and Cultural Organization (UNESCO).

As shown in Figure 3, mining activities in Madre de Dios have had a strong negative impact on the environment. Indeed, even if the Forest Permanent Production area (1,935,162 million ha) as well as the wood extraction areas are smaller in Madre de Dios than in regions like Ucayali (3,539,783 million ha) or Loreto (9,302,102 million ha), one of the highest increase in habitat change were registered in this Madre de Dios. Terra-i reported that around 6.9% and 7.3% of the total deforestation rates in the entire country and in the Peruvian Amazon (as defined by The Amazon Treaty Cooperation Organization) respectively were registered in this region between 2004 to 2011.

Figure 3. Satellite images provided by NASA show the high landscape change due to artisanal mining activities between 2003 and 2011 on the region of Madre de Dios. Source: UNEP, CATHALAC.

According to Terra-i, the trends show that 469 ha were lost in 2004, reaching 7,888 ha in 2011; i.e., an increase of 1583% (Figure 1). During that same 8-year period, a total of 28,369 ha of natural vegetative cover were lost, with an average annual loss of 3,546 ha. The highest accumulated rate of habitat loss occurred in the provinces of Tambopata (1,895 ha per year and 15,156 ha accumulated between 2004 and 2011) and in Manu (1,005 ha per year and 8,038 ha accumulated between 2004 and 2011) (Figure 4).

These observations together support the recent study of Swenson et al (2011) which showed that mining in Madre de Dios contributes to deforestation faster than any other activity. The authors reported that roughly 7,000 ha of pristine forest and wetlands were cleared on two large mining sites between 2003 and 2009, with a dramatic increase in deforestation occurring during the last three years. Figure 1 shows the three main incipient mining areas and their impacts on forest cover, as detected by Terra-i. These three sites together accounted for a total area of 15,500 ha of mined area in August 2009.

According to the same study, habitat loss in this area is driven by the migration of poor population whose main source of income lies in resource extraction. Indeed, according to the annual report of 2011 of the Ministry of Energy and Mines, the region of Madre de Dios is the Peru’s third largest gold producer, and hosts 46% of Peru’s artisanal gold production.

Figure 4. Annual rate of habitat loss and accumulated loss, between 2004-2011, for the Municipalities of Madre Dios base on Terra-i data.

And what about of the government efforts?

The Peruvian Government has strengthened the legal framework for forest management through a series of new laws (such as the Forestry Law 27308 of 2002) and the establishment of new concessions to fulfill sustainable forest management requirements. Nevertheless, illegal mining continues to be a serious challenge. At the moment, the main strategies to reduce illegal mining refer to police forces action (fine and equipment seizures) and the facilitation of the mining legalization process. Additionally, the Peruvian Government is also working on a series of methods to improve the mining practices by minimizing the use of mercury and therefore reduce its negative impact on the environment.

Reducing Emissions from Deforestation and Forest Degradation (REDD) initiatives to fight against forest clearing and promote emissions reduction represent further actions to be undertaken in the short and medium term. For instance, the “Madre de Dios REDD Project” is aimed to reduce around 1 t of carbon emission per year in an area of 100,000 ha of forest on the Ecological Corridor of Vilcabamba-Amboró. Moreover, incentives to use non-timber forest resources can not only prevent deforestation and improve local inhabitant’s health, but also support the developing of alternative sources of income. For instance, Madre de Dios hosts 864,778 hectares of Brazil nut trees that provide employment for d income for 750 families, including various indigenous communities.

Are you interested in watching the evolution of deforestation in the mining region? Play the following video:

The article was authored by Alejandro Coca and Louis Reymondin, with the support of Andreea Nowak (CIAT / DAPA visiting researcher) and Rodomiro Ortiz (Faculty Professor, Genetics and Plant Breeding / Swedish University of Agricultural Sciences).


Food and Agriculture Organization (FAO). (2005; 2010). Global Forest Resources Assessments (FRA). http://www.fao.org/forestry/fra/en/

Fraser, B. 2011. In Peru, hope for carbon deal wash away with the soil. The Daily Climate, 14 February 2011. http://wwwp.dailyclimate.org/tdc-newsroom/2011/02/peru-gold-mining

Government of Peru. 2011. El Peru de los Bosques. http://cdam.minam.gob.pe/novedades/elperudelosbosques2011.pdf

Ministry of Energy and Mines. 2011. Annual report of the mining activities. http://www.minem.gob.pe/descripcion.php?idSector=1&idTitular=4771

Swenson, J.J., Carter C.E., Domec J.C. and C.I. Delgado. 2011. Gold mining in the Peruvian Amazon: global prices, deforestation, and mercury imports. PLoS One 6(4), e18875.

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