Beijing is making astonishingly rapid purchases of gold in an attempt to reduce its reliance on the US dollar, fend off American sanctions, and incorporate gold into its financial currency strategy. This surge in demand has led to some Chinese entities accelerating illegal gold mining globally, earning them the moniker “mining mafia.” Countries like Indonesia, Ghana, and French Guiana have been deeply affected by this trend. The tacit approval of overseas gold mining by the Chinese Communist Party has fueled criminal activities.
According to data from the World Gold Council, China has been one of the largest global gold buyers for over a decade. However, it remains a mystery how much gold China actually holds and where it sources it from, as reported by The Washington Post.
A research document by Goldman Sachs in September 2024 indicated that the amount of gold purchases by the People’s Bank of China (the central bank of the CCP) exceeded official figures by as much as 60 metric tons in certain months.
Jan Nieuwenhuijs, a gold analyst at Money Metals, estimated that the People’s Bank of China secretly purchased 570 metric tons of gold in 2024, with the total amount held now possibly reaching 5,065 metric tons, double the official claims.
This opaque demand has contributed to a growing prevalence of global gold smuggling and illegal mining. The Washington Post reported instances in Indonesia where Chinese mining groups exploit gold resources with geological maps, excavators, and leaching tanks without permits, evading local law enforcement and regulations.
These groups, referred to as “mining mafia” by locals, control the most lucrative resource in the mountainous regions: gold.
The Washington Post’s conservative estimates suggest that the illegal gold market exceeds $30 billion annually, with around 400 metric tons smuggled. A study conducted by the non-profit organization Swissaid in 2024 revealed that gold smuggling in Africa doubled between 2012 and 2022.
In May of this year, the United Nations Office on Drugs and Crime (UNODC) warned that the gold supply chain is increasingly embroiled in organized crime, posing a “serious global threat.” With gold prices surpassing $3,300 per ounce, drug cartels, terrorists, and mercenary groups are becoming more involved in gold mining and smuggling.
UNODC pointed out that nearly all of these forces are collaborating with Chinese mining companies, with Chinese individuals engaging comprehensively from mining sites to markets and penetrating undeveloped regions.
Investigations have shown that many illegal gold mines are directly funded and operated by Chinese private investors, with little to no oversight or enforcement by Chinese authorities. This has prompted accusations from gold-rich nations that Beijing tacitly allows overseas gold plundering, fostering criminal activities.
David Soud, a gold analyst at the Organisation for Economic Co-operation and Development (OECD), highlighted that Chinese individuals engage in illegal gold mining and smuggling, with gold flowing to China through highly opaque supply chains. These activities often evade taxes and royalties.
Soud and other investigators noted that the operations of Chinese illegal groups differ from traditional artisanal or legal large-scale mining. While artisanal miners use minimal machinery, illegal Chinese mining employs crushers, excavators, and other tools at an industrial scale. Contrary to legitimate mining, they disregard environmental, health, and safety regulations, rapidly damaging forest and river ecosystems.
Furthermore, these conglomerates gradually transition from using mercury to cyanide in processing, which is more efficient but poses greater environmental hazards.
To date, Beijing has refused requests from gold resource nations to combat crime and has not engaged in multinational cooperation efforts.
The Washington Post’s findings reveal that since 2024, at least 15 gold-producing countries have filed lawsuits against Chinese citizens or companies for illegal gold mining.
International investigators and officials from Ghana and Indonesia have stated that Beijing has failed to cooperate with gold-producing countries in combating crime, has withheld quantifiable data for tracking illegal gold flows, and has been absent from discussions on mining issues.
For instance, at the OECD Responsible Mineral Supply Chains conference in Paris in May, where discussions on illicit gold flows took place, a small Chinese delegation focused solely on industrial mining and did not engage in discussions on illegal gold flows.
Guillaume de Brier, a researcher at the International Peace Information Service in Belgium, remarked that in these discussions, “We talk about China, but they’re not there. China (the CCP) is the elephant in the room that has disappeared.”
In Ghana, Africa’s largest gold exporter, officials have indicated that Chinese groups engage in illegal gold mining, devastating vast swathes of land in the west and south of the country, with their activities now shifting to the north. Ghanaian MP Tiah Abdul-Kabiru Mahama accused the Chinese government of complicity.
In recent months, Ghana has arrested hundreds of Chinese nationals, but many of them often return even after deportation. Minister of Resources Emmanuel Armah-Kofi Buah described dealing with this situation as “truly challenging.”
In the Democratic Republic of the Congo in Central Africa, hundreds of people staged protests in January against illegal Chinese gold mining in the eastern part of the country, where gold resources are being plundered.
In South Kivu province, Governor Jean-Jacques Purusi announced the arrest of three Chinese individuals in January found with gold bars and large sums of cash. Subsequently, the three were sentenced to seven years in prison, fined hundreds of thousands of dollars for illegal mining, and convicted of fraud, money laundering, and looting.
In villages like Lantung and Lombok in Indonesia, Chinese illegal mining groups have been using heavy machinery and cyanide for gold processing since 2022 to ramp up production immediately, leading to severe environmental pollution such as deforestation, river contamination, and livestock poisoning.
One illegal mining site spans the area of 184 American football fields and generates up to $5.5 million in gold value per month. Local residents and anti-corruption officials describe regulatory bodies as virtually non-existent, allowing illegal groups to evade legal consequences even if arrested or prosecuted.
In Indonesia, the Ministry of Energy and Mineral Resources receives reports almost daily of illegal gold mining, with the largest-scale operations often run by Chinese individuals. In a notable illegal mining case last year, the Indonesian government sought assistance from the Chinese Embassy to identify implicated citizens, but “they (the embassy) did not cooperate,” according to an unnamed official. The involved Chinese individuals subsequently fled Indonesia.
In French Guiana in South America, Chinese investors constitute a “key logistical link” in the illegal gold market. To combat this illicit issue, the French military spends millions of dollars annually.
A report by the French Foundation for Strategic Research (FRS) in 2023 highlighted that illegal mining by Chinese investors is part of the “global resource plunder by the Chinese government,” which either encourages or assists in these activities.