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Impacts of gold mine on local community

SiaR - February 5, 1999

[The following is a translation by Down to Earth of a report from Musirawas (South Sumatra) by local journalist, Taufik Wijaya. It was dated 31st Dec 1998, but received via SiaR 5th Feb 1999. Some technical details need to be checked, as they differ from information previously provided by Indonesian and Australian colleagues (see below). But in general the account of the negative impacts this gold/silver mine is having on the local community is consistent with others received since 1997.]

The normally clear River Tiku turned dark brown on December 16th 1998 and hundreds of dead, rotting fish floated in it. "It's not just the fish! My child was killed by that water", said Sapri, a local resident.

Since 1996 PT Barisan Tropical Mining (PT BTM) has been exploring for gold and silver at Bukit Tambang, near Muara Rupit in the Musirawas district of South Sumatra, local farmers who live along the river have not been able to use the water. These are the Sukamenang and Muaratiku communities who live in the seven villages of Sungaijambu, Lubuk Pelubang, Sungaiberingin, Lubuk Pah, Napal Pejongot, Tanjungbengkuang and Tanjungharapan.

In addition to the pollution, the presence of PT BTM has made life worse for these 15,455 people by reducing local incomes. When the company bought their land, they lost their rubber plantations which generated a daily income of Rp30,000 per hectare (approx US$3). The productivity of their remaining plantations has fallen due to local temperature changes which (they believe) are a direct result of the mining operations.

The community has also lost its income from wild honey. The wild bees have deserted forests because of the lights of the mine at night. Also, trees which have been productive for years, like the durian, are failing to fruit normally: the buds or flowers are shaken off by dynamite explosions.

Since 1996, farmers who have traditionally panned for gold in the river can no longer do so – according to Sapri – because the water causes skin irritations and sores which do not easily heal.

Nurlela, Sapri's eldest daughter, died in August 1998 after bathing in the river. "Before she died, she said she itched all over and then her body turned blue", said Sapri who wants the mine closed down. Unfortunately, Sapri did not take his daughter to the doctors to prove whether it was really the polluted water that killed her.

On hearing about the child's death, local administrator Radjab Semendawai said his office would investigate. On the other hand, Dr Hilda Zulkifli, from Sriwijaya University in Palembang who heads the team which carried out quarterly environmental impact assessments for PT BTM, doubts that Nurlela's death was due to toxic wastes. "There should be an autopsy to prove the charge. The child's death must not be taken as proof that PT BTM has polluted the environment", she said when contacted on December 31st.

The mining operations have also caused erosion at Bukit Tembang. "Lots of trees along the banks of the R. Tiku have fallen down even though there was no wind or rain, said Sapri. Wildlife has fled the area. When operations started up, monkeys went crazy and attacked people and tigers been seen several times in the villages which is unheard of. The mine has upset normal life in these seven villages. "The children here don't dare to play in the river since my daughter died", added Sapri. The mining operation covering 11,709 hectares is run by Australian company Laverton Gold (1).

What have the local community got out of these mining operations? After protesting to the company, demonstrating several times at the local government office and forcing a PT BTM employee – Gevin Lee (sic) – to swallow some of the polluted water, the villagers have only received a well for each village and a few water storage vessels. "We still have to fetch water every day. The company has done nothing for us. The river PT BTM is polluting is worth far more than the seven wells it has constructed," said Pandit Jawalnehru from Sukamenang.

Through the village administration, the company offers work to local farmers, planting grass and trees to reclaim land. But the pay is far removed from what they earned as traditional rubber farmers: only Rp5,000 per day – at least one sixth of their former income.

However, the administrator for Musirawas wants to open up more land for mining. "In order to support and increase living standards of local farmers – apart from reclamation work – we are in the process of opening up a new mining area so the farmers can share in the benefits," Mr Semendawai told the interviewer.

In 1983 one of Setiawan Djody's (2) subsidiaries in PT Setdco Ganesha joined up with expatriate staff from Australian mining company Rio Tinto (3) to form PT Barisan Tropical Mining in order to exploit Bukit Tembang. Without any consultation with the local community, they immediately moved in and started exploring and even small-scale exploitation. Later, the two companies worked with the local government to procure local farmers' land.

The farmers refused at first but, after the military intervened and spread the word that most of the land they farmed was state land, they realised opposition was pointless. The military are said to have used various types of threat. For example, if farmers did not sell their land to PT BTM, they would be imprisoned for obstructing development.

In 1996, the two companies sold PT BTM shares to two foreign investors who then set up the companies PT Rawas Limited Singapura and PT Jamtiku Limited Hong Kong with 40% holdings each. The remaining 20% was divided between Djody and his Australian colleagues Laverton Gold. Their investment was worth US$ 15 million (4).

Shortly after this they began the exploitation of the forests and land which lie close to Kerinci Seblat National Park and the ancestral lands of the Anak Dalam (Kubu) indigenous people. The target for the first 5 years (1996-2001) is 6.5 tonnes on gold and 74 tonnes of silver.

The damage to the local farmers' economy and the threat to their environment from mining waste does not seem to concern the company or local officials. Gevin (Gavin?) Lee, from PT BTM's environmental department, said the waste disposal system of using a tailings dam is right for Indonesia. "This system is appropriate for use in Indonesia because of the high rainfall, whereas in Australia depends on an evaporation system", he said when interviewed at the mine. The gold and silver mine is located on top of a hill and is only accessible via a 20km hilly road with two security checkpoints.

Lee explained that the mining wastes such as lime, cyanide, hydrochloric acid, sulphuric acid, lead nitrate and borax would settle out in the tailings dam. The liquid waste discharged from there into the R.Tiku would no longer contain those materials and "is no longer dangerous," he said.

However, Lee admitted that the company had discharged mining waste straight into the river while they were constructing a new tailings dam in September 1998. "Since last October we have gone back to using the tailings dam," he said.

The local administrator, Semendawai, supported Lee's statement that PT BTM did not pollute the river. Semendawai was the focus of local protests about corruption, collusion and nepotism a while back. At a presentation on November 24th 1998 when he stocked the River Ripit with young carp, Semendawai told local farmers and community leaders that this proved the company was not polluting the river.

Some of his audience were amused by this statement since the R. Rupit is 60km from the tailings disposal site. "Let him try stocking our river," said Jawalnehru.

As for the dead fish the farmers found, Hilda announced that investigations had shown they were not killed by chemicals in the mining waste. "We found that some fish had died from potassium (cyanide?) poisoning at concentrations of 144.38mg. It is impossible that this came from the mine. Local people often use it for fishing," she said.

Whether or not the company's explanation is true, the Indonesian environmental organisation WALHI issued a statement on December 19th 1998, based on the negative impacts which the local community had suffered since the mining operations began. This included three demands that: the government should stop PT BTM's operating licence; the company should compensate the community for their losses and for the pollution; the company should reopen negotiations with the community if it wanted to resume operations (5).


  1. The Register of Australian Mining 1997/8 reports that in March 1997 Continental Goldfields planned to merge with stablemate Laverton to form a new international gold mining company Transcontinental Resources NL.
  2. Setiawan Djodi is a well-known Indonesian artist and entrepreneur who was Tommy Suharto's business partner in buying Italian car makers Lamborghini and a cement factory in East Timor.
  3. The Australian mining company CRA was subsumed within mining giant UK-based Rio Tinto in 1997.
  4. This information differs from that provided by Indonesian mining campaigners in early 1997 which was as follows: CRA Australia (Laverton Gold NL) 90% PT SETDCO Ganesha (Setiawan Djodi Co 10% Concession granted 1986. Operations started 1997. Expansion in 5 year phases. Production in 1st phase = 6.4 tonnes. Company previously called PT Rio Tinto who did the exploration work. Location: 95,000ha gold mining concession in the extreme west of the province of South Sumatra, bordering on Bengkulu province. The Register of Australian Mining 1997/8 also states that Laverton Gold "had 100% of the Rawas gold project in South Sumatra" – which may be the same development.
  5. Presumably over land rights and compensation.