Asia | Small-scale mining in Indonesia

Herding wildcats

Where an informal economy thrives, the forest withers

Apr 27th 2013|ASPAI

SEATED in the doorway of her wooden hut-on-stilts, Ibu Ipah does not look like a wealthy woman. But she sets aside her cooking pans to flash a golden nugget worth more than $1,000. For decades small-scale miners like her family have panned the river at Aspai, a tumbledown settlement near one of Indonesian Borneo’s most famous national parks, in search of bits of alluvial gold like hers. The landscape is changing, however, with the arrival of diesel dredging machines. Old-fashioned mining with newfangled tools is turning this remote corner of Kalimantan into a pocked and treeless desert.

A recent study by the International Institute for Environment and Development (IIED), a think-tank in London, suggests that Indonesia should not overlook its 110,000-odd wildcat miners. They account for only a small fraction of the $100 billion generated annually by mining, but they deserve attention, not least for environmental reasons. They tend to be forgotten by the government, which is distracted by its relations with high-revenue foreign-owned firms.

Small-scale mining should be credited as a legitimate part of the mining industry, says Sarah Best, a researcher at the IIED, if its pollution and noxious working conditions are to be improved. Indonesia needs to start “creating incentives for small-scale miners to make their operations legal”, so that they can get training and finance to make their operations safer and cleaner.

The law today gives elected district leaders the authority to issue “people’s mining licences” to locals who excavate no deeper than 25 metres (82 feet). The licence-holders are assessed for royalties and subject to environmental laws, which forbid the use of explosives and heavy machinery. However, harsh penalties for unlicensed mining, such as ten years’ imprisonment and fines of 10 billion rupiah ($1m), have not deterred the wildcatters.

The licensing regime is a mess for big and small miners alike: the ministry of mines has identified 1,460 overlapping concessions in Kalimantan alone. In practice, “people’s mining” areas are rarely set aside and, when they are, they are often in unprofitable places, says Bardolf Paul, the executive director of a foundation that works with the miners. This partly explains why so many of them continue to operate illegally.

At Aspai, a dozen or so dredging machines belch out thick exhaust. Crews of six plunge pipes deep into scummy ponds. Their sluice-boxes separate sediment from the gold flecks and disgorge it into muddy streams. Mercury tailings and other effluent then flow through a 416,000-hectare national park that is home to endangered orangutans and other protected wildlife.

With mineral prices still high, Indonesia’s wildcat miners will not be giving up in a hurry. The crews at Aspai say that they are lucky to extract 15 grams of gold a day between them. That is worth only $750—before the middlemen have taken their cut. But in a country where 40% of the population live on less than $2 a day, small-scale mining still holds great allure for people like Ibu Ipah.

This article appeared in the Asia section of the print edition under the headline "Herding wildcats"