Indonesia is the largest gold producer in Asia after China and has become a target of illicit gold-mining syndicates, investigators say. Photo / Muhammad Fadli, The Washington Post
Hilltop after hilltop in this remote part of Indonesia is being scalped of vegetation.
On the horizon, excavators lumber forward, gouging out rocks veined yellow. Nearby, milky chemicals collect in Olympic pool-sized trenches.
This is the work of Chinese mining syndicates flush with capital and connections, Indonesian investigators say. And virtually none of it is legal.
These syndicates bring their own geologic maps, excavators and leaching tanks. They operate without permits, unchecked by local police – the equivalent of what residents call a “mining mafia”, in control of the most lucrative resource in these hills - gold.
“We don’t know where they take it,” said a Lantung gold trader, Heru Hairuddin. “We only know it doesn’t stay here.”
As part of a strategic effort to reduce reliance on the US dollar, insulate itself from potential United States sanctions and build its own capacity to influence the international monetary system, China is procuring gold at a voracious pace.
This drive has fuelled and facilitated a surge in illicit gold mining across the Global South, inflicting a trail of environmental destruction from Indonesia to Ghana to French Guiana, a Washington Post investigation found.
The Post examination of China’s role in the booming trade in illicit gold is based on a review of satellite imagery, trade data, public records, and dozens of interviews with gold researchers, law enforcement and government officials across three continents.
In Indonesia, where the proliferation of illicit mining has been among the most widespread and least studied, the Post obtained internal government documents and visited half a dozen secluded gold-mining communities being transformed by Chinese-led operations.
Chinese workers at these locations declined to speak to the Post, but Chinese mining operators in Indonesia said in interviews that investment in the country’s gold sector is spiking. In videos aimed at investors on Chinese social media, Chinese miners advertise “free and easy” access to Indonesia’s vast gold deposits.
In May, the United Nations Office on Drugs and Crime (UNODC) warned that organised crime was embedding itself so deeply in gold supply chains that it poses a “serious global threat”.
As Chinese demand drives gold prices above US$3000 per ounce, drug cartels, terrorists, and mercenary groups are deepening their involvement in the sector, UNODC said.
Almost all these actors work in some capacity with Chinese mining concerns, which are present from “mine to market” and have the greatest ability to work in the most unexploited locations, according to those who study the gold sector.
Many illicit gold operations are being financed and operated directly by Chinese private investors who appear to be operating with little oversight or repercussion from Chinese authorities, investigators say.
This has drawn allegations from gold-rich countries that Beijing is permitting the ransacking of gold deposits abroad, enabling a rapidly mutating trade that UN officials warn is propping up a range of other criminal activities.
Chinese officials have pushed back against these allegations, including the Chinese Ambassador to Ghana, Tong Defa, who in June said it was a “significant injustice” to blame Beijing for the spread of illegal gold mining.
The Chinese Foreign Ministry and the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters did not respond to detailed questions from the Post. The Chinese Embassy in Washington said it was “not aware” of the allegations made by gold-rich countries about China’s role and declined to comment.
“Chinese networks have become deeply involved in the illicit gold trade,” said David Soud, a minerals analyst who has written reports on gold for the Organisation for Economic Co-operation and Development (OECD).
“Much of the gold they mine or otherwise acquire goes to China via highly opaque supply chains.”
This is routinely done without the payment of local taxes or royalties, officials and analysts say.
Illicit Chinese syndicates, according to Soud and other investigators, operate differently from both traditional, artisanal gold miners and industrial, legal mining companies, including those from China.
While artisanal miners use little to no machinery, illicit Chinese operators employ crushers, excavators and other tools to extract at a scale that rivals industrial mines.
Unlike industrial mines, analysts say, the syndicates operate without regard to environmental, health and safety regulations, degrading forests and rivers at rates not seen before in many communities.
In the sites where they operate, Chinese syndicates are also driving a transition from using mercury for processing to cyanide – a more effective but also more hazardous process when employed without strict controls, according to mining experts.
“This system has gotten much more complex and much more organised,” said Brad Brooks-Rubin, a former US State Department official who worked on mineral supply chains in the Biden Administration. “The Western policy world has largely missed what has happened.”
In a sign that the issue is just now emerging as a policy concern, the Trump Administration in March for the first time designated gold among the minerals vital to the US as part of an executive order to “reduce our reliance on foreign nations”.
In a hearing a few days later, the chairman of the House Foreign Affairs subcommittee on Africa, Representative Chris Smith (Republican-New Jersey), described China and its mining interests as the “greatest beneficiaries” of the illicit gold trade.
Beijing has rebuffed appeals from regulators in gold-rich countries to help crack down on Chinese-run mining syndicates and opted out of multilateral efforts to counter the underground trade, officials and advocates said in interviews.
According to a Post review of government statements, court records and news reports, authorities in at least 15 gold-rich countries have brought cases against Chinese nationals and companies over illicit gold mining since the start of 2024.
– In Ghana, Africa’s top gold-exporting country, officials say Chinese syndicates have laid waste to swathes of Ghana’s west and south, and are now moving to the country’s north. “The Chinese Government is doing nothing about it,” said Ghanaian lawmaker Tiah Abdul-Kabiru Mahama, calling the Chinese Communist Party “complicit” in the destruction.
Hundreds of Chinese nationals have been arrested just in recent months. Ghana has tried seeking the help of Chinese authorities, but to little avail, Lands and Natural Resources Minister Emmanuel Armah-Kofi Buah said in an interview. Miners who are deported are routinely able to find their way back into the country, Buah said, adding, “It has been tough”.
– In Indonesia, Asia’s biggest gold producer after China, officials at the Ministry of Energy and Mineral Resources say they receive reports almost daily of illegal gold mines across the country’s sprawling archipelago, the biggest of which are linked to Chinese nationals, based on preliminary investigations.
In one high-profile case last year, Indonesian authorities asked the Chinese Embassy to help identify its citizens and assist with the probe. “They were not co-operative,” said an Indonesian official. The Chinese suspects fled Indonesia, the official added.
- In French Guiana, an overseas department of France in South America, Chinese investors form a “crucial logistical chain” in an illicit gold market that the French military spends tens of millions of dollars annually to combat, said the Foundation for Strategic Research (FRS), a defence think-tank funded in part by the French Government, in a 2023 report.
“The involvement of Chinese players,” FRS said, “is part of a global context of resource capture and predation, encouraged or facilitated by the Chinese government.”
China has been among the world’s biggest buyers of gold for over a decade, according to data from the World Gold Council, a trade association. But it’s a mystery, analysts say, as to how much gold it actually has – and where it comes from.
The Chinese Communist Party is heavily involved in acquiring gold for the state, whether through the People’s Bank of China, brokers or via industrial policies that have encouraged retail buying and incentivised gold mining abroad, gold and financial analysts say.
In 2017, Song Xin, then president of the China Gold Association, said the Belt and Road Initiative, China’s US$1 trillion ($1.68t) global infrastructure programme, is “also a golden road”.
From 2000 to 2024, Chinese state-owned creditors inked 85 loan commitments for gold extraction and processing projects across the Global South, according to data provided to the Post by AidData, a research lab at William and Mary in Virginia.
It’s now easier for Chinese miners to find work outside China than at home, said Zeng Shanyue, a Chinese gold-mining investor based in Indonesia.
Many of those going abroad originate from the southern province of Guangxi, which has a long tradition of mining. But businessmen from elsewhere in China, like his province of Zhejiang, are also moving in. “Everyone,” Zeng said, “is mining”.
To China’s strategic thinkers, it is not enough.
“China’s gold reserves are still insufficient and should be increased further,” said Liu Ping, a senior CCP official, in March at the annual meeting of China’s top political advisory body. Gold is “a crucial tool” for the country’s national security, said Zhang Zhigang, another party official.
While many countries are not fully transparent with their gold holdings, there are exceptionally large discrepancies between what Chinese authorities say they have and independent assessments from trade groups and banks.
In a September 2024 research document, Goldman Sachs said its estimates of the Chinese central bank’s gold purchases have been in certain months as much as 60 tonnes higher than the central bank declared.
Over the course of 2024, said gold analyst Jan Nieuwenhuijs at Money Metals, the People’s Bank of China covertly bought 570 tonnes of gold, and it has now accumulated more than twice the gold it says it has.
The scale of China’s acquisitions is changing the gold market, Nieuwenhuijs told the Post. “And the reason is that they really see the gold as an alternative to the dollar,” he said.
The People’s Bank of China did not respond to requests for comment. In a statement, China’s General Administration of Customs said it follows “international conventions” on compiling and publishing information.
“China’s gold import and export data is open and transparent,” it said.
Given gold’s strategic value, it’s natural for China’s holdings to be “classified”, said Zhao Qingming, an adjunct professor at the School of Finance of the University of International Business and Economics in Beijing.
“No country openly discloses whether its gold reserves are acquired domestically or internationally, or how much is sourced from each channel,” Zhao said.
The problem, researchers say, is that this lack of transparency increasingly conceals large quantities of gold that was mined illegally.
Conservative estimates place the value of the illicit gold sector at more than US$30 billion or 400 tonnes a year. A study released in 2024 by the non-profit Swissaid found that gold smuggling out of Africa doubled between 2012 and 2022.
Individually, unsanctioned mines may be smaller than legal ones. But aggregated over a country, over multiple countries – “it’s a massive, massive amount”, said Pete Chirico, associate director of the US Geological Survey’s Florence Bascom Geoscience Centre, which provides scientific assessments of resource extraction to the US government.
Once smelted, illegal gold is virtually impossible to differentiate from legal gold – and equally as valuable to the world’s biggest buyer.
“If you have a strategic interest in gold, you don’t want to just rely on the industrial gold-mining sector,” Chirico said. “You’re trying to mop up gold wherever it is.”
Lalu Adimiyat, 40, looked out the window of a muddied Toyota SUV as it bumped along the pockmarked slopes of his village in eastern Indonesia. Stepping out into blustering winds, he caught the eye of a few local men peeking out from tented shafts. He nodded stiffly and turned away.
It wasn’t safe to stay long, he muttered.
Chinese gold-mining investors began arriving here on Lombok island, an hour’s boat ride from the holiday destination of Bali, in 2022, said Lalu, a community activist.
In his village of Sekotong, locals had mined small amounts of gold for years, scaling the hills on motorbikes and using hand tools to scoop out gold-mottled ores that they sold to traders in the valleys.
Indonesian authorities allowed this as long as it remained small-scale, providing permits to citizens for what is called in Indonesian “tambang rakyat”, or “people’s mining”.
When Chinese investors came, however, they came with excavators, crushers and pumps that stunned local miners, Lalu recalled.
The Chinese built their own processing facilities at the top of hills, installing sprinkler systems to douse ore with cyanide – a chemical that local miners had never used before. They brought in towering Chinese-made mills with rollers that spun 160 times a minute. Soon, Chinese investors were moving quantities of gold in a single day that would take locals months or even years to extract, Lalu said.
“We felt defeated,” he recalled.
After several clashes, hostilities boiled over in August 2024 when villagers set a dormitory for Chinese miners on fire.
National authorities arrived to find one of the biggest illegal gold mines ever uncovered in Indonesia – an operation that spread across the size of 184 American football fields, producing gold with an estimated market value of US$5.5 million per month.
“I never expected that,” remembered Dian Patria, 58, who inspected the site in October.
A plain-speaking, moustachioed bureaucrat in Indonesia’s anti-corruption commission, Dian said he has watched Chinese illicit networks spread across Indonesia, corrupting offices from village councils to national ministries, amid a broader expansion in Chinese investment.
In the country’s far-flung eastern provinces, which he oversees and where mineral deposits are concentrated, the most coveted prize has been gold.
“They are robbing us,” Dian lamented from his office in Jakarta. “Openly.”
In previous decades, when American companies such as Newmont dominated gold mining in Indonesia, authorities could rely partly on US and international anti-corruption regulations, such as the OECD Anti-Bribery Convention, to stave off excessive graft.
Not so with Chinese operators, who face few barriers to engaging in corruption abroad, Dian said.
Indonesia has stepped up efforts to find and prosecute illegal mining syndicates, earlier this year opening a law enforcement arm within its minerals ministry and increasing enforcement against cyanide smuggling rings.
The bribing of officials, however, means that even when regulators believe they have found damning evidence, their superiors may not be inclined to prosecute, Dian said.
Indonesian authorities have reported major illicit gold operations run by Chinese networks in at least four provinces over the past year. None have led to convictions.
In one case in Kalimantan, the Indonesian part of the island of Borneo, authorities found a mine that stretched over 1.5km and employed as many as 80 people. Chinese nationals were brought to trial but then abruptly acquitted – a decision that the Indonesian Judicial Commission later said was marred by ethical breaches and misconduct by judges.
In June, one of the Chinese defendants still in Indonesia was retried and given a sentence of three years in prison and a fine of US$1.8m.
Haruki Agustina, director of climate change mitigation at the Indonesian Environment Ministry, said she thought the punishment was insufficient given the mine’s damage to the environment, particularly with regard to the unregulated use of cyanide. “Way, way too low,” she said in an interview.
On Lombok, internal Indonesian government documents obtained by the Post say the illegal mine in Sekotong encroached into protected forest area, and operations were carried out by three companies – two led by Chinese nationals and one by Indonesians – none of which had the requisite permits.
In addition, the documents say, there are dozens more illicit mines on Lombok and its neighbouring islands that the Government is aware of.
The Sekotong investigation, which was handed over to police last year, has stalled, said a senior official at the Ministry of Energy and Mineral Resources, adding that the reasons have not been shared with the ministry. The police did not respond to requests for comment.
When Post reporters visited Sekotong in May, the police lines set up last year had been torn down. Trucks brimming with gold ore trundled along cliff edges, and the mines appeared operational. Lalu sucked his teeth as he raised his phone to take a video.
“No, no, no accountability,” he said.
In January, hundreds of people in the Democratic Republic of Congo demonstrated against what they called the “plundering” of the country’s gold by Chinese operators.
Asked about the demonstrations, Guo Jiakun, a spokesperson for China’s Foreign Ministry, said, “The Chinese Government always asks Chinese citizens and companies overseas to strictly observe local laws and regulations.”
Officials in gold-rich countries, however, say Beijing has done little to enforce that sentiment.
Chinese authorities have been unco-operative in efforts to identify and deter Chinese nationals responsible for illicit gold mining, according to international investigators and officials in Ghana and Indonesia.
Chinese authorities have also withheld data that could help quantify and track illicit gold flows, and are noticeably absent from multilateral discussions on the topic, researchers say.
In May, for example, at the 2025 OECD conference on responsible mineral supply chains in Paris – widely seen as the most important annual forum on the topic – a small Chinese delegation spoke about industrial mining but did not participate in discussions on illicit flows, attendees said.
In these conversations, “China is the missing elephant in the room”, said Guillaume de Brier, a researcher at the International Peace Information Service, a Belgium-based institute focused on mining in the African Great Lakes region.
“We talk about them,” he said. “They are not there.”
Artisanal mining in the village of Lantung dates back decades, locals say. But large-scale mining only began three years ago, when a middle-aged Chinese man known to villagers as “Mr Xi” began striking deals with smallholders to dig on their land. He promised compensation that did not materialise, villagers said. But attempts to protest have had little effect.
Runoff from the gaping pits on the mountaintops is killing crops. Every week, it seems, cattle downstream of the mine’s cyanide pools drop dead, locals say.
“Everything you see here, that hill and that hill and that one. … Everything you see that is stripped land is the Chinese,” said Sabuddin, a local villager.
Wearing a long-sleeved shirt that hung loose on his scrawny frame, Sabuddin, 49, who like many Indonesians goes by only one name, stood perched on a jagged bluff.
He said he did “rakyat” mining, working with a hammer and pickax. He dug sometimes in areas like this one, which Chinese operators had excavated and then abandoned, Sabuddin said. But he had never mined for the Chinese.
“They work illegally,” he explained. “I don’t want to be involved in all that.”
Yet, looking across the jungles he’d trekked through as a boy, he sometimes felt a sense of awe at the scale of the Chinese operation, he said.
He pointed out a building with zinc roofs on the opposing crag – a dormitory for workers who guard the illicit mine. Even when night falls, the lights in those buildings don’t turn off, he said. The crushers keep whirring; the excavators keep inching forward.
Locals couldn’t run an operation like this, Sabuddin said.
“No,” he continued. “Only the Chinese.”