Sustainability of Rural Mining Activities At Risk Amid COVID-19 Pandemic

Indonesia, November 2020 -- Artisanal and Small-scale Gold Mining (ASGM) flourishes in small islands across Indonesia’s archipelago, providing the essential livelihood for roughly 1 million people in Indonesia (planetGOLD, 2020). ASGM fulfills a need of these rural workers and has been practiced by generations for hundreds of years. 

However, the ongoing COVID-19 pandemic situation has impacted the local economies of community miners, especially those operating in small islands, pushing them into a more vulnerable state. National Project Manager GOLD-ISMIA, Baiq Dewi Krisnayanti, said that the national travel restrictions have caused disturbances in labour disruptions and supply chain, resulting in the increase of mining operational costs

Although the international gold prices have risen since the pandemic, she added, it did not increase the margin for miners. Instead, their earnings are plummeting due to the increasing logistical complication with the supply chain. Based on GOLD-ISMIA observation in Pulau Obi, North Maluku, miners started using their savings, even reallocating their household budget, to cover the high operational cost.

“The whole pandemic situation has impacted on the sustainability of ASGM activities,” Ms. Dewi said, during a webinar “Challenges in the ASGM Sector in Small Islands in Indonesia” on Wednesday, November 4, 2020.

In addition, the national travel restriction and remoteness of these rural communities have presented another challenge that has strongly hurt community miners. Ms. Dewi explained, there has been a cash flow crisis in Pulau Obi. Many miners get paid 50 percent less, and the remaining payment to be paid waiting for the next cash in supply. Even when miners actually had savings in their bank accounts, they could not withdraw their money. 

Under the circumstance of pandemic COVID-19, the work to formalise community mining activities, which has been the pertaining issue of the ASGM sector, has become more challenging. To date, the majority of community miners do not have community mining permits (Izin Pertambangan Rakyat / IPR). This informality brings along environmental challenges as mercury usage is a common practice among community miners. 

Head of Center for Mineral Resources, Coal and Geothermal, Geological Agency from the Ministry of Energy and Mineral Resources of Republic Indonesia, Mr. Moehamad Awaluddin, explained that permits for community mining had been regulated by the revised mining law UU No.3/2020. The Law regulates requirements that need to be fulfilled by miners in order to obtain legal mining rights, including the prohibition against the use of mercury and specific areas where mining activities are permitted. “Small-scale mining activities are actually permitted, but with strict criterias,” Mr. Awaluddin said.

However, he acknowledged it would be difficult to implement the Law as it is quite costly. As of 2020, the government authority has only issued 16 legal permits, none of which are located on small islands. 

Expert from Khairun University, Ms. Nurany, said that the issue pertaining to ASGM's legal status had remained one of the biggest challenges that needs to be addressed. However, she added, it was not the best solution to close down their sites completely because, for many people, it had been the main source of income that passed across generations. 

Ms Nurany also highlighted the environmental challenge which has been a common issue arising in the ASGM sector. Based on her own observation on community miners operating on Pulau Obi, they were actually aware of the negative impact of mercury exposure to health. However, miners believed that the impact would not affect their health anytime soon. 

To achieve the agenda of sustaining the ASGM activities and protecting the environment, GOLD-ISMIA had supported the partnership between miner communities for formalization so they could operate within the legal framework. In addressing the environmental challenge, GOLD-ISMIA has also been running a project to help community miners access funding from financial institutions. With the funding, they could afford more environmentally-friendly mining equipment and therefore sustain the ASGM sector. 

In response to a COVID-19 outbreak, GOLD-ISMIA has also worked closely with the local governments in distributing Personal Protective Equipment (PPE) to protect the vulnerable ASGM communities in small islands.