Indonesians turn to illegal gold mining as coronavirus pandemic hits economy

The price of gold has soared, fuelling a boom in illegal panning in rivers near US company Freeport’s Grasberg mine and other places in Indonesia

Police arrested 400 illicit gold miners in a conservation area in Kalimantan, amid concerns the use of mercury can harm miners and the environment

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Two miners pan for gold in a river near Korowai, Papua province, Indonesia, despite the risk of arrest and health hazards. Photo: AFP

Published: 8:00am, 24 Sep 2020Updated: 3:41pm, 24 Sep 2020

With the coronavirus devastating jobs across the country, desperate Indonesians are flocking to illegal gold mines as the soaring price of the precious metal overrides the risk to their lives and the environment.

Spooked by the economic destruction wrought by the pandemic, consumers and investors around the world have been snapping up gold, which is seen as a hedge against volatility, sending its price to a record above US$2,000 an ounce last month.

The surge in demand has fuelled a boom in mineral-rich Indonesia’s illegal mining industry, with workers ignoring the threat of arrest, mercury poisoning or being caught in the middle of gun battles.

Father-of-two Mustafa is among the hundreds who play a daily game of cat-and-mouse with authorities in the restive Papua region as they pan for nuggets in a river near US-based Freeport’s sprawling Grasberg site – one of the world’s biggest gold mines.

On a good day, Mustafa collects a gram of gold by sifting through the mud with a fabric filter, which he can sell to a local trader for about 800,000 rupiah (US$55) – no small sum in one of Indonesia’s poorest regions.