Remote hills in Indonesia are stripped and villages are struggling with poisoned soil, all because of a growing illegal gold trade that, according to researchers, is largely powered by Chinese syndicates.
A Washington Post Exposé Based on satellite images, trade data, public registers and interviews on three continents, these activities that are running by private Chinese investors go much beyond the reach of the local authorities, which often run without interference of the local police.
In the Lantung region in Indonesia, gold trader Heru Hiruddin expressed himself and the news told: “We don’t know where they are taking it. We just know that it doesn’t stay here.”
Villagers say that Cyanide drainage of nearby pits and cattle killed. Local population that creates my tools with hand tools are overshadowed by the scale of Chinese -served locations, where house employees with zinc roof with zinc roof that monitor the circumference.
Protests, residents say, have been ignored.
While the Indonesian authorities have increased enforcement by creating a special arms of law in the mineral ministry and the breaking of cyanide smuggling rings, prosecution remain rare and bribery has hinder cases.
In one case, a large by Chinese led me in Kalimantan with 80 employees, but all the defendants were acquitted in a decision that was later linked to judicial misconduct.
The research also showed that shadow networks extend from Southeast -Asia to South America and throughout Africa. Operators step into traditional and small -scale gold mining (ASGM) with industrial equipment, advanced geological data and cash, and in many cases they extract gold without permits and ignore environmental rules.
Experts say that the increase in illegal gold mining is linked to China’s long -term strategy to reduce dependence on the US dollar to protect themselves against possible sanctions and raw materials that it regards it as strategically vital.
A growing criminal coherence
The United Nations office on drugs and crime warned in May This organized crime is so deeply accepted in golden supply chains that trade is now a ‘serious global threat’. Criminal groups, including drug cartels, terrorist networks and rental soldiers, are increasingly involved, often in collaboration with Chinese-linked operators who have the means and connections to penetrate earlier unused deposits.
In contrast to traditional traditional miners, the post indicates that these syndicates work on an almost industrial scale, but without environmental or safety control. In many regions they shift from mercury to cyanide in gold processing, a more efficient method, but one that is even more dangerous for surrounding communities if they are not checked.
China has been the world’s best gold buyers for more than ten years, but analysts speculate that the actual size of his reserves remains a mystery and can be much higher than publicly reported.
Jan Nieuwenhuijs, A Gold Analyst at Money Metals, estimate that in 2024 aloneThe Chinese central bank secretly bought 570 tonnes – more than double her figure. The scale of buying, Nieuwenhuijs told the mail, changes the gold market because Beijing sees the metal as an “alternative to the dollar”.
Although Chinese officials insist that their import and export data of gold are ‘open and transparent’, researchers warn that confidentiality around the State holdings makes it easier for illegally diluted gold so as not to be detected.
Worldwide, the illegal gold sector is appreciated at more than US $ 30 billion a year, according to conservative estimates. A study from 2024 Due to Non -Profit Swissaid, gold smuggling from Africa found doubled between 2012 and 2022.
Once refined, illegal gold is hardly indistinguishable from legal ministered metal, making it attractive for large buyers.
A global pattern and requires coordinated action
As mentioned, the same dynamics plays far from Indonesia.
In Brazil, President Luiz Inácio Lula da Silva has made elimination of illegal mining from indigenous countries a central promise since they returned to the office in 2023. Raids by Environment Agency Ibama have focused on the Yanomami and Munduruku areas, where mining has caused serious deforestation, mercury infection and health crises.
New regulations now require electronic invoices for gold transactions in an attempt to reduce the laundering of illegal metal.
Yet the profit remains irresistible. The World Gold Council estimates That ASGM now accounts for around 20 percent of global gold production, an increase of around 4 percent in the nineties, when the price was almost US $ 250 per ounce. The Golden Prize has risen as high this year as US $ 3,500 and is currently priced at the level of US $ 3,350.
Dominic Raab, former Deputy Prime Minister of the UK and now head of Global Affairs for Appian Capital Advisory, told S&P Global That a high golden price is tempting for illegal operators. “If the price goes up … Criminal organizations have looked at diversification in gold. It is easy to melt. It is easy to smuggle. It is quite difficult to follow,” he said.
In November 2024, Raab worked with the World Gold Council to publish “Silence is gold”A report on how criminal gangs, armed groups and corrupt officials ASGM exploit to finance wars, terrorism and organized crime.
The report identifies three fundamental challenges: lack of transparency in business and compliance with the government with legal standards; mistakes of accountability; And incoherent enforcement over jurisdictions.
Subsequently, it outlines 24 practical actions for governments, international organizations, NGOs and the mining sector, ranging from persecution of perpetrators to supporting a coordinated G7 and G20 response.
However, not all ASGM is illegal, because some miners try to use safer, mercury -free techniques.
Because the gold price remains high, buyers such as China continue to feed the trade.
The challenge, according to market participants, is to channel ASGM to regulated, sustainable frameworks before criminal networks further anchor themselves.
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Publication of securities: I, Giann Liguid, has no direct investment interest in a company mentioned in this article.
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