Indonesian court sentences foreign national behind 80-man illegal gold mining operation to 5 years’ jail, US$3.2 million fine

SINGAPORE: A foreigner who led an 80-man illegal gold mining operation in Indonesia’s West Kalimantan has been sentenced to five years’ jail and a 50 billion rupiah (US$3.2 million) fine for mining without a permit.

The Chinese national, identified only as YH by the Indonesian authorities, was arrested in May and will serve an additional six months in jail if he does not pay the fine, according to the Ministry of Energy and Mineral Resources.

Under Indonesian law, those convicted of mining without a permit may be jailed for up to five years and fined up to 100 billion rupiah.

News of illegal gold miners being convicted and sentenced in Indonesia is relatively rare compared to the number of reports on illegal mining accidents, the dangers of small-scale miners using mercury to extract gold, and some arrests made by the police.

According to the authorities, YH had 80 fellow Chinese nationals working for him in the illegal operation in Ketapang regency. Some of them did not have a visa to work in Indonesia.

He also sought help from local residents to provide housekeeping and catering services.

Investigators found evidence of gold ore mining activities at the site, which has a Mining Business Permit and is currently undergoing maintenance works, said Mr Sunindyo Suryo Herdadi, director of engineering and environment for minerals and coal at the Ministry of Energy and Mineral Resources.

The permit, however, belongs to two gold companies that do not have quota approvals for production from 2024 to 2026. Based on preliminary investigations, the two local companies do not have any connections with YH.

The state suffered an estimated loss of 1.02 trillion rupiah (US$65.6 million) as a result of the illegal operation, with the miners stealing 774.27 kg of gold and 937.7 kg of silver, news site Kompas.com reported.

The volume of gold ore excavated was about 2,687 m³, slightly more than the size of an Olympic-sized pool.

“The illegal underground mining (carried out by YH) involved blasting methods to process and extract the gold. After refining the gold underground, the bullion was then smuggled out of the tunnels and sold,” Mr Sunindyo said.

Sample tests showed the gold content was of high quality. Mercury – a substance hazardous to health but is used by many small-scale gold miners – was used to separate the gold from other minerals.

DEATHS AND CROSS-BORDER CRIME

Unlicensed mines are common across Indonesia, the region’s biggest gold producer. At least 300,000 small-scale miners are believed to be in the trade. 

There are over 2,741 unlicensed mining locations – also known as Pertambangan Tanpa Izin or PETI –  in the country, the energy ministry's directorate general of mineral and coal said in December last year.

Unlicensed mines pose environmental and safety threats, cause revenue losses to the state and could be linked to corruption, according to researchers and activists.

Deadly incidents have also occurred at illegal gold mines. In 2022, a cliff collapse in Mandailing Natal in North Sumatra killed 12 women. 

In July this year, at least 27 people died after a landslide triggered by torrential rain struck near an illegal gold mine in Sulawesi.

Last week, a landslide at an illegal gold mine in West Sumatra killed at least 15 people and buried dozens of others.

More reports have also surfaced of foreigners nabbed for mining illegally in Indonesia.

In 2021, six undocumented Chinese nationals were arrested in Papua for illegal gold mining, according to Antara news agency.

In August, media outlet Tempo reported the police were on the hunt for 15 Chinese citizens allegedly involved in a fire at an illegal mining camp in West Lombok.

In September, the Manokwari Immigration office deported three Chinese nationals for engaging in illegal gold mining activities in West Papua while on visitor visas, according to the Indonesian National Police.

The energy ministry said last month that dealing with illegal mining requires the effort of the government, community and law enforcers.