10 Indonesian Mines Producing Gold

Indonesian Mines Producing Gold: Balancing Wealth and Responsibility

Indonesia has a long history of mining and is home to some of the largest gold and copper mining operations in the world. These projects play a major economic role but also face significant responsibilities in terms of their social and environmental impacts. In this blog post, we examine 10 Indonesian mines mines to understand both their contributions and evolving responsibilities.

We profile underground and open-pit mines located across the Indonesian archipelago, from the Grasberg Block Cave in remote Papua to the Martabe project in North Sumatra. For each site, we outline key details about production, infrastructure requirements, ownership history and economic and social roles. We also discuss the complex challenges of managing large-scale industrial operations in frontier regions, from addressing pollution to ensuring benefits are shared.

By examining these diverse yet interrelated examples, our aim is to provide insights into both the opportunities and obligations associated with mineral-led development across Indonesia.

1. Grasberg Block Cave Mine

The Grasberg Block Cave Mine is located in the province of Papua in eastern Indonesia. It is one of the largest gold mines and second largest copper mine in the world. Mining at Grasberg first began in the 1970s and it is now owned and operated by PT Freeport Indonesia, a subsidiary of the American company Freeport-McMoRan.

The mine is located in the rugged mountains near Puncak Jaya, the highest point in Papua. Mining occurs via a massive block caving method where large underground areas of ore are undercut causing the ground above to collapse in a controlled manner.

This allows for large volumes of lower grade ore to be extracted economically. At full production, Grasberg can mine around 200,000 tonnes of ore per day via this block caving method.

The ore contains abundant gold as well as significant quantities of copper. Over the decades of mining operations, Grasberg has produced tens of millions of ounces of gold and tens of billions of pounds of copper.

Estimates indicate there are still large reserves that will support mining operations for many decades to come. However the ore grade is declining over time which is typical as the highest quality areas are mined out first.

Accessing and operating such a large underground mine in remote jungle terrain presents major logistical and technological challenges. Freeport had to build extensive infrastructure including roads, a deep sea port, airport, pipelines, and accommodations for thousands of workers.

Electricity is generated onsite at a power plant to meet the massive energy demands of the mining operations which require huge engines, conveyors, crushers, and refining equipment. Ventilation and ground support are also critical aspects of managing worker safety in the deep underground excavations.

The mining operations and associated infrastructure make Grasberg one of the largest private sector development projects in Indonesia. In its heyday over the 2010s it employed around 30,000 people, most of them local Papuans.

As a result, the mine has played an important economic role for the province and broader Indonesian economy by creating jobs and generating tax revenue. However, it has also faced social and environmental challenges related to its massive scale and remote highlands location.

Some of the key social and environmental issues have included pollution from mining waste, transmission of diseases, pressures on local cultures, as well as conflicts over revenue sharing and involvement of the Papuan people in the mine’s management.

After years of negotiations, in 2021 Freeport transitioned to majority Indonesian ownership as part of the mine’s contract renewal. How this new ownership structure addresses past issues and benefits local communities will be important for the mine’s long term sustainability.

2. Batu Hijau Mine

The Batu Hijau Mine is an open-pit copper and gold mine located on the Indonesian island of Sumbawa in West Nusa Tenggara province. Discovered in 1981, it is one of the largest mines in Indonesia owned and operated by PT Amman Mineral Internasional, a joint venture between PT Indonesia Asahan Aluminium and PT Newmont Nusa Tenggara.

Mining at Batu Hijau utilizes conventional open pit methods. The ore body lies close to the surface and is extracted using excavators, trucks, and other heavy equipment. Low-grade ore and waste rock are transported to adjacent storage areas while higher grade ore goes to an on-site processing plant. The processing plant utilizes crushing, grinding, flotation, and cyanidation techniques to extract copper and gold from the ore.

From the start of commercial production in 2000 to present day, Batu Hijau has produced millions of ounces of gold and over 10 billion pounds of copper. Its large reserves ensure mining will continue throughout the 2020s. However, falling ore grades will likely require higher production volumes over time to maintain profitability.

As with other remote any other Indonesian mine, developing infrastructure was a huge challenge given the locations rugged terrain and lack of existing roads, ports and power grid. A 180km slurry pipeline was built to transport copper concentrate to the main shipping port. Extensive haul roads, a conveyor system, worker camp and 165MW coal power station were also constructed.

Batu Hijau provides over 8,000 direct jobs as the largest single employer in West Nusa Tenggara. As well as jobs and investment, it generates tax revenue for the province and country.

However, it also faces pressures related to pollution, health, water scarcity, transmigration and impacts on local livelihoods. The company works with NGO partners on various community initiatives to help address these challenges.

Going forward, ensuring these social programs effectively benefit nearby villages will be key to maintaining the mine’s social license to operate. Minimizing environmental risks from waste storage and eventual site closure will also be important as mining nears completion in coming decades.

3. Deep Mill Level Zone Mine

Located near Timika in the province of Papua, Indonesia, the Deep Mill Level Zone (DMLZ) Mine is an underground gold and copper mine owned by PT Freeport Indonesia, a subsidiary of American mining giant Freeport-McMoRan.

Mining at DMLZ utilizes block caving methods at depths reaching over 1,500 meters below the surface. This technique involves undercutting an ore body from below, causing the ground above to collapse under its own weight in a controlled manner. This allows for high volume, low-cost extraction of the Deep Mill Level Zone’s copper and gold deposits.

Production at DMLZ ramped up in the late 1990s after the block caving method was implemented. At its peak, DMLZ contributed over half of Freeport’s total copper and gold production from its Papuan mines. However, output has declined in recent years as the best ore zones are depleted.

As with Freeport’s massive Grasberg mine nearby, developing infrastructure for DMLZ in the remote Papuan highlands was extremely challenging. Significant investments were required for power, ventilation, dewatering systems, haul roads and materials handling to support the underground workings. Safety also requires constant attention given the extreme depths and hazardous mining conditions.

Providing well-paying jobs has been one way DMLZ benefits the local region, employing over 10,000 Papuans at its height. However, the social and environmental impacts of large-scale mining are complex. Issues faced include pollution from extensive tailings storage, waste rock piles, and smelting emissions. Transmission of diseases from migrant workers to locals is also a concern.

As reserves decrease, DMLZ’s future roles in both Papuan development and Freeport’s overall operations are unclear. A just transition for workers and sustainable reuse of the site will require planning. Ongoing community engagement and initiatives aimed at public health, education and local empowerment will also shape DMLZ’s legacy.

4. Martabe Gold and Silver Mine

The Martabe Gold and Silver Mine is an open-pit mining project located in North Sumatra, Indonesia. It is owned and operated by PT United Tractors Tbk, one of Indonesia’s largest heavy equipment and mining companies.

Mining at Martabe utilizes conventional open pit methods to extract gold and silver-bearing ore from three main deposits – Ramba, Way Linggo and Way Seputih. Production ramped up after the project facilities were completed in 2009. Processing involves crushing, grinding, carbon-in-pulp cyanidation and recovery via electrowinning to produce gold and silver doré bullion on site.

At its peak in recent years, Martabe was producing over 300,000 ounces of gold annually from its low-grade but high-tonnage ores. With estimated remaining reserves to support operations into the late 2020s, it is one of United Tractors’ core assets.

Given its remote location in the mountainous forests of North Sumatra, significant infrastructure investments were required. This included roads, a tailings storage facility, coal-fired power plant and other ancillary facilities. Maintaining environmental standards across these large-scale mining and support operations presents complex challenges.

Martabe plays an important economic role, employing over 2,000 Indonesians as the premier employer in the regency. It also contributes tax revenue and supports local businesses. However, mining on such a scale also brings social and environmental pressures. These include impacts to water resources, risks of contamination, ecosystem disturbance and involuntary resettlement of communities.

Continually improving social programs, environmental management and transparency will be important for Martabe to have a constructive long-term legacy. Ensuring a just transition and sustainable post-mining land use is also critical given the scale of disturbance. With care and community partnership, mining projects have the potential to benefit remote regions for many years after resources are depleted.

5. Toka Tindung Gold Project

The Toka Tindung Gold Project is an open-pit gold mine located in the Bogani Nani Wartabone National Park region of North Sulawesi, Indonesia. It is owned and operated by PT Agincourt Resources, a subsidiary of Rajawali Group, an Indonesian conglomerate.

Mining at Toka Tindung utilizes conventional open pit methods to extract gold-bearing ores from three main deposits – Waukatore, Pebularan and Busungkol. Commercial production commenced in 2012 after construction of the processing facilities. Ore is heap leached on impermeable pads with a cyanide solution to dissolve the contained gold. It is then recovered through carbon adsorption and smelting.

At full capacity, Toka Tindung can process 4.5 million tonnes of ore annually to produce over 100,000 ounces of gold. With mineral reserves projected to last over a decade, it plays an important long-term economic role for North Sulawesi.

Developing infrastructure in the remote, mountainous terrain posed difficulties. Extensive civil works were required to construct the haul roads, tailings storage, waste dumps and other auxiliary facilities. Reliable power is supplied via an on-site coal power station and diesel generators.

The project brings tangible benefits through employment, procurement opportunities, skills training, and community development programs. At its peak, over 1,000 people were directly employed. However, the social and environmental impacts of mining also require diligent management. These include risks to water sources, flora/fauna habitats and involuntary resettlements. Air and noise pollution must be carefully monitored and mitigated.

With committed reclamation, post-mining land use, and ongoing social investment, Toka Tindung aims to benefit host communities for many years after mine closure scheduled in the 2030s. Ensuring a just transition for workers and stakeholders will also be a key test of the project’s long term sustainability and legacy in North Sulawesi.

6. Kencana Gold Mine

The Kencana Gold Mine is an operating gold mine located in the Tanggamus Regency of Lampung Province, Sumatra, Indonesia. It is owned and operated by PT Kencana Graha Global, an Indonesian mining company.

Kencana utilizes open pit mining methods to extract gold-bearing ore from two main deposits – the Main Zone and Barisan Zone. Mining began in 2006 after site construction and facilities development. Processing involves crushing, grinding, carbon-in-leach circuits and electrowinning to produce gold doré bars on site.

At full capacity, Kencana can process around 4 million tonnes of ore per year to yield approximately 75,000 ounces of gold annually, though production has fluctuated based on ore grades and cut-off limits. With current proven reserves expected to last into the late 2020s, it plays an important long-term economic role in Lampung Province.

Given its remote highlands location, development required extensive infrastructure including haul roads, stockpiles, a tailings storage facility and on-site coal power plant. Maintaining environmental management systems across these industrial operations presents continual challenges.

Kencana provides around 800 direct jobs as a major private sector employer. It contributes significant tax revenue and supports growth of local businesses. However, large-scale mining also brings social and environmental pressures that require responsible mitigation. These include water resource protections, biodiversity management, and supporting livelihood transitions in resettled communities.

As the operation approaches closure, ensuring a just transition for workers and stakeholders will be important, as well as committed reclamation, post-mining land use planning and ongoing social investment to maximize Kencana Mine’s long-term positive legacy for Lampung Province. With community partnership, mining projects have potential to benefit host regions long after resources are depleted.

7. Tujuh Bukit Oxide Project

The Tujuh Bukit Oxide Gold Project is an open-pit gold mine located in the Batu Licin region of East Java province, Indonesia. It is majority owned and operated by PT Agincourt Resources, a subsidiary of Rajawali Group.

Mining utilizes conventional open pit methods to extract gold-bearing oxides from seven main deposits within the Tujuh Bukit lease area – Cikeletep, Tibu Seribu, Paringin, Walang, Cibodas, Cibeureum and Batu Pasir. Production commenced in 2019 after the oxide processing plant and infrastructure were completed. Run of mine ore is heap leached on impermeable pads using a sodium cyanide solution to extract the contained gold.

At full capacity, Tujuh Bukit can process 3 million tonnes of ore annually to produce approximately 80,000-100,000 ounces of gold in doré bars. With a large mineral resource estimated to support at least 10 years of mining, it is envisaged as one of the largest Indonesian gold mines.

Given its remote location in rural East Java, developing supporting infrastructure was challenging. This included haul roads, a tailings storage facility, power generation, Site accommodations and waste rock stacks. The scope of these industrial operations also brings environmental management responsibilities.

The project provides substantial economic benefits through jobs, skills development, procurement opportunities and tax revenue. At peak construction over 1,500 workers were employed.

However, large-scale mining also carries social and environmental risks that must be addressed proactively such as water management, biodiversity protections, and supporting livelihood transitions in resettled communities.

As the operation moves towards closure after a decade or more of production, ensuring sound planning for rehabilitation, post-mining land use, and continued community investment will be important markers of Tujuh Bukit’s long term sustainability and positive legacy in East Java. Responsible stakeholder partnership throughout the project lifecycle will also aid in overall success.

8. Pongkor Mine

The Pongkor Gold Mine is an underground gold mining project located near Batu Karas Regency in West Java Province, Indonesia. It has been operating since 1989 and is majority owned by PT Aneka Tambang, an Indonesian state-owned mineral and mining company.

Mining at Pongkor utilizes both cut-and-fill and sub-level stoping underground extraction methods at depths reaching 370 meters below surface. This allows for economical bulk mining of the deposit’s gold-bearing quartz veins. Ore is processed on site using conventional methods including crushing, grinding, carbon-adsorption, elution and electrowinning to produce gold doré bars.

At peak production in the early 2000s, Pongkor was one of Indonesia’s largest gold mines, producing over 150,000 ounces of gold annually. While grades have declined, reserves are still expected to support mining operations into the 2030s.

Developing the necessary infrastructure to support an industrial-scale underground mine in a remote jungle region posed major challenges. This included construction of extensive underground workings, tunnels, ventilation systems, power supply as well as workers accommodation and processing facilities. Maintaining environmental and safety standards across these complex operations also requires continuous efforts.

The mine provides significant benefits through local employment, economic activity, skills development and government revenue. At its height, over 2,000 jobs were directly supported. However, large-scale mining also brings social and environmental impacts that must be addressed proactively such as pollution prevention, biodiversity management and community health.

Going forward, as resources are depleted, ensuring a just transition for workers and sustainable long-term development of the Pongkor site will be an important part of the mine’s legacy. With responsible planning and stakeholder engagement, operations like this have the opportunity to benefit surrounding regions for generations after closure.

9. Gosowong Mine

The Gosowong Gold Mine is an underground gold mining project located on the island of Halmahera in the North Maluku province of eastern Indonesia. It has been in operation since 1998 and is currently owned by PT Nusa Halmahera Minerals, a subsidiary of PT Amman Mineral Nusa Tenggara.

Gosowong utilizes mechanized cut-and-fill and sub-level open stoping methods to extract gold-bearing quartz veins from six ore zones down to depths of around 500 meters below surface. Ore is processed via conventional methods including crushing, grinding, carbon-in-leach circuits and electrowinning to produce gold doré bars.

At its peak in the early 2000s, Gosowong was producing over 200,000 ounces of gold annually, making it one of Indonesia’s top gold mines. While grades have declined, current proven reserves are estimated to support mining into the late 2020s.

Developing infrastructure to support large-scale underground mining in remote Halmahera’s mountainous terrain involved major investments. This included extensive underground development, a processing plant, tailings storage, haul roads, power and accommodations for over 1,000 workers. Maintaining environmental and social performance across these complex industrial operations also requires ongoing effort.

The economic benefits Gosowong provides through jobs, procurement, skills training and tax revenue are important for North Maluku. However, mining on this scale also brings social and environmental impacts that must be addressed proactively such as water management, waste handling, biodiversity protections and community health monitoring.

As the lowest cost quartz vein gold operation in Indonesia, Gosowong continues working to improve its sustainability practices. Ensuring a just transition for workers and stakeholders during mine closure will also be important. With responsible planning and ongoing engagement, the mine aims to benefit surrounding communities long after resources are depleted.

10. Deep Ore Zone Underground Mine

The Deep Ore Zone (DOZ) underground gold and copper mine is located near the large Grasberg mining complex in Papua province, Indonesia. It has been in operation since the mid-2000s and is majority owned by state-owned mining company PT Indonesia Asahan Aluminium (Inalum).

Mining at DOZ utilizes sub-level retreat and longhole stoping methods at depths reaching 1,200 meters below surface. This allows for bulk extraction of gold-copper ore from steeply dipping porphyry deposits. Ore is processed at the nearby Grasberg processing facilities which utilize crushing, grinding, froth flotation and electrowinning techniques to produce copper concentrate and gold-silver Doré bars.

At peak production in the late 2010s, DOZ was contributing over 30 million pounds of copper and 100,000 ounces of gold annually to Inalum’s output from the Grasberg region. While grades have declined, reserves are estimated to support mining into the 2030s.

Developing extensive underground infrastructure and maintaining production from extreme depths poses major technical and safety challenges. This includes excavating declines, tunnels, vent raises and materials handling systems. Substantial electrical power, ventilation, dewatering and ground support are also required.

The economic and social benefits of large-scale employment, skills development, procurement and government revenue provided by DOZ are crucially important for Papua. However, mining on this scale also brings responsibilities to manage impacts to water, biodiversity and community health.

Looking ahead, ensuring mine closure and rehabilitation planning begins early will be vital given the scale of disturbance. A just transition for local communities and workers must also be supported. With proactive stakeholder engagement throughout the lifecycle, DOZ aims to leave a positive long-term legacy.

Indonesian Gold Mines Conclusion

In summary, the 10 gold and copper mining projects profiled demonstrate both the enormous economic importance and complex responsibilities of Indonesia’s mineral industry. They represent some of the country’s largest underground and open-pit operations, producing significant gold, silver and copper outputs that contribute substantial value to local and national economies through employment, skills development, procurement, taxation and infrastructure development.

Mining on such an industrial scale deep within remote, mountainous regions has allowed for new cities and livelihoods to emerge. However, it has also introduced complex social and environmental impacts that require diligent long-term management, from pollution prevention to protecting ecosystems, cultural heritage and ensuring communities’ well-being.

As reserves decline at many of these sites, planning for a just transition of workers and post-mining land use becomes increasingly vital to benefit surrounding regions sustainably long after mining ends. Early engagement with stakeholders throughout projects’ lifecycles will also be important to transparently address concerns, maximize benefits and build lasting legacies.

With committed rehabilitation, environmental stewardship and investment in long-term community development, these mines have potential to seed new industries and opportunities for generations to come. Responsible planning and partnership will determine the degree to which their disturbance ultimately gives way to regeneration and enduring prosperity across Indonesia’s remote regions long reliant on mineral wealth.