The miners have been lured by record prices on international gold markets in the last few years.
The BBC reports almost all operate outside the law, without government permits and with little concern for the environment.
Deforestation is not the only problem. Miners use mercury to process the gold dust, which then pollutes the rivers and the food chain.
Corruption and government incompetence have scuppered efforts In the past, to control illegal mining in Madre de Dios.
But regional president Jose Luis Aguirre says the administration of President Ollanta Humala, who was elected last year, is now acting.
New decrees issued in February set tougher penalties for illegal mining. More staff have also been sent to bolster the regional mining ministry
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