Socioeconomic Impacts of Illegal Mining

There are strong financial incentives for the locals to conduct these illegal mining activi- ties since they have–at least so far–significantly supported local livelihoods and con- tributed to the local economies. For example, gurandils in Pongkor helped both locals and immigrants survive the 1998 economic crisis and transformed the area from quiet, shabby villages into lively, populated areas with permanent buildings and vehicle ownership.

A similar situation occurred in Bangka, where new, permanent houses flourished along the new road following an increase of illegal mining in 2001. In South Kalimantan, the Ban- jarese (the locals of the region) charter a Boeing 737 at least twice a year to take them to Jakarta, en route to their umrah pilgrimage to Mecca, Saudi Arabia.

There is no doubt that illegal mining has benefited some poor and rural people. By engaging in these activities, they can develop their capacity, realize their economic potential, and overcome the chal- lenges that arise from limited access to subsistence resources.

But the presence of illegal miners increases conflicts among people in the surrounding areas. In Pongkor, for example, gurandils have always been associated with community conflict and social unrest. They frequently fight over mining territories. On many occa- sions, the role large companies play in tackling illegal mining causes conflict.

Having been granted a concession by the state, some companies want to rid their mining sites of local miners. This often leads to violence as companies try to assert and maintain control over production, resulting in loss of land, livelihood, and above all, human life. Bringing in the military or police can complicate the situation. In a struggle between illegal miners and Freeport McMoran in Papua, for example, there have been indications that the military, while making a show of protecting the company from illegal gold mining activities, is actu- ally behind the illegal miners.(fly ash grinding process)

Alcohol abuse and prostitution have been associated with illegal mining. There are also instances of child labor. For example, some 10 percent of illegal miners in Kalimantan are under 17 years old. These children are more susceptible to health risks and accidents as well as physical and psychological problems than their adult counterparts.

Community leaders and local people are concerned about the social impacts of illegal mining. The problems associated with illegal mining in Indonesia lead some to consider legaliza- tion. It is often compared to prostitution: you cannot stop people from doing it, but you can make them do it safely.

Perhaps the authorities and mining companies in Indonesia could take Benguet’s Acupan Mining Partnership in the Philippines as an example. This project enables a large-scale operator and small-scale gold miners to be grouped as mining coop- eratives and work together legally.

Benguet Corporation acknowledges the existence of small-scale miners in its area of operation and assists them with safer and environmentally friendly operation methods, as well as agreeing to purchase their gold. In return, the small- scale mining community agrees to foster harmonious coexistence with the company, to protect the environment, and follow certain health and safety measures. The government also takes part by setting rules, regulations, and measures to accommodate the project, and oversees their implementation. This tripartite agreement is considered a success by many.
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