Illegal Jambi gold mining inflicts heavy losses on state

Jon Afrizal, Jambi

Indonesia has suffered hundreds of millions of rupiah in losses due to illegal gold mining activities in several regencies in Jambi province that have continued since 1997.

No legal action has been taken to date by the local authorities to stop the mushrooming illegal mining, which has also had a negative impact on the environment, especially rivers where gold mining has taken place.

Villagers living near the riverbanks have complained of skin irritation and other diseases after using water from the rivers that may have been contaminated with mercury used in processing gold.

Based on data from the Jambi mining and energy office, there are at least five regencies where hundreds of illegal gold mining sites are found; Sarolangun, Bungo, Tebo, Muarojambi and Batanghari.

Each regency has between 50 to 100 gold mining sites, with a total area of operation estimated to be more than 600 hectares.

Azwar Effendi, the geological and mineral resources department head at Jambi's mining and energy office, acknowledged that many illegal gold miners are operating in the province.

But they cannot be evicted as certain security officials backed the illegal activities, he alleged.

Tebo Regental Legislative Council speaker Sugianto confirmed that raids had been launched on the illegal mines several times, but they were ineffective.

"The Tabo regent has warned the illegal miners to stop their operations along the rivers," he said.

According to Sugianto, the regental administration assisted by police had arrested several illegal miners but failed to lay charges against them due to what the authorities said were unclear legal procedures imposed on violators.

Azwar said illegal mining had cost the state hundreds of millions of rupiah in losses because its operators did not pay the annual royalty of Rp 15,000 (US$1.60) per hectare in addition to a production tax of 3.75 percent of sales.

Each mining site is able to produce four to 40 grams of gold per day, he added.

The gold mined from riverbed sand by villagers is of the secondary quality. One ton of sand usually contains between 0.2 to 0.3 gram of gold.

It is not viable for large companies to invest in this kind of gold exploration business, said Azwar.

"The local administration should therefore take the initiative to designate certain areas for legal mining sites and train traditional miners to improve their business," Azwar said.

Many illegal miners have been exploiting three major rivers in Tebo regency for the past two years, including the Batangtebo river where about 50 to 60 sites are found with at least seven people working on each of them.

Each mining site could yield between five and 10 grams of pure gold per day, which would then be sold to numerous gold shops in the town of Tebo.