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Jakarta Post

Illegal mining causing over Rp 80t in losses

  • Apriadi Gunawan

    The Jakarta Post

Berastagi, N. Sumatra   /   Tue, May 5, 2015   /  06:51 am

Illegal gold mining activities that have spread throughout the country in the past few years have reportedly incurred state losses of over Rp 80 trillion (about US$6.1 billion) annually.

Widespread gold mining activities have also caused pollution and environmental destruction.

Former deputy environment minister Masnellyarti Hilman said that based on data at the Energy and Mineral Resources Ministry in 2014, illegal gold mining was taking place in 27 provinces, 80 regencies and two cities.

'€œIllegal gold mining has taken place in nearly all provinces. Under our nose, our gold resources have been depleted. Worse, the country is deprived of the relevant tax income,'€ said Masnellyarti in a discussion in Karo regency, North Sumatra, over the weekend.

She said the volume of national gold production extracted legally was less than illegally mined gold.

According to data released by the Energy and Mineral Resources Ministry in 2012, the volume of national gold production was 66 tons annually, while the estimated amount of illegally mined gold could reach 130 tons annually.

Masnellyarti said if gold was valued at Rp 622,000 per gram, the earning from illegally mined gold was estimated to reach Rp 80.86 trillion.

'€œMore than Rp 80 trillion is lost every year due to illegal gold mining in the country. This is a substantial amount,'€ she added.

Masnellyarti said those gaining from illegal gold mining were financiers, while the miners remained poor and their health put at risk, adding that a miner earned an average of Rp 4 million monthly.

The impacts of illegal gold mining activities mainly cause environmental degradation, especially regarding the land, which becomes contaminated with mercury, with restoration activities being burdened on local administrations.

'€œGenerally, illegal miners carelessly leave the area they have exploited,'€ said Masnellyarti, urging the regional administrations to ban illegal gold mining so as not to be burdened by restoration costs.

She acknowledged that it was no easy task banning the activity as it involved thugs and security personnel.

Consequently, she proposed that regional administrations should provide technical assistance and permits to illegal miners who met the requirements, then ban the use of mercury in gold mining, as a ban would take effect in 2018, in line with the Minamata Convention.

'€œIt would be better for regional administrations to legalize this activity. Besides obtaining income from gold mining, the government will not be burdened by costs to restore former mines,'€ said Masnellyarti.

A mining expert at the Bandung Institute of Technology, Prof. Rudy Sayoga Gautama, said a mining inventory conducted by the ministry in 2013 indicated 10,809 permits had been issued by regional administrations since 2001.


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