An illegal gold-mining operation on Sangihe Island, North Sulawesi, involving mainland Chinese operators and more than 50 excavators has restarted operations and expanding, even as the legal operator, PT Tambang Mas Sangihe (TMS), remains unable to begin operations after more than a year of waiting for final approval from the Ministry of Energy and Mineral Resources (ESDM).
The contrast is extraordinary: an illegal mining operation is operating openly on Sangihe on an industrial scale, while the company holding the legal right to develop the resource remains waiting for the government to authorize its operations.
Evidence reviewed during government enforcement activities shows the scale of the illegal operation, including the use of more than 50 excavators and extensive areas of environmental destruction. Mining waste containing cyanide has also been discharged into coastal waters, damaging mangrove and coastal areas.
In the last six months, the illegal operation has already stolen an estimated IDR 200 billion in gold from state resources and left the people with nothing but an environmental catastrophe. In September 2026 alone, 7 foreign Chinese nationals were arrested at Sam Ratulangi International Airport in Manado, North Sulawesi for attempting to smuggle 23 kg of illegally mined gold (IDR 57.5 billion) from North Sulawesi to Hong Kong.
Chinese foreign miners smuggle the gold out of Indonesia, and leave the Indonesian state without the revenues, taxes, employment and other economic benefits that would result from a legally regulated mining operation.
Despite repeated reports and government inspections, the illegal mining has continued openly on Sangihe.
According to information from Sangihe residents, the day before ESDM’s Directorate General of Law Enforcement (Gakkum) arrived to inspect the area, excavators that had been operating openly for months were removed from the site and hidden in surrounding vegetation. Within days of the enforcement team’s departure, residents reported that the number of excavators had doubled. The illegal miners were obviously warned of Gakkum’s arrival and apparently have no fear of their return. There have been no arrests despite the scale of the operation over many years.
TMS says it has spent more than IDR 30 billion in 2025 complying with the government’s requirements to get the Operation Production Permit reissued and will spend up to 1 trillion more to state operations legally. TMS has completed all requirements requested by ESDM and yet while they wait for approval, mainland Chinese illegal miners are operating openly on an industrial scale and stealing Indonesia’s natural resources
Insincere Promises, Strong Words But No Real Enforcement
The situation raises an uncomfortable question for the Minister of ESDM Bahlil Lahadalia: why is an illegal mining operation able to steal 200 billion of rupiah worth of Indonesia’s natural resources while a company that has fulfilled the government’s requirements unable to start operations?
There have repeated announcements and proclamations to end illegal mining but never any arrests. Sangihe residents say it’s open secret that police and other authorities accept bribes from Chinese investors to take no action.
On May 18th, 2026, the Chief Prosecutor of North Sulawesi Jacob Hendrik Pattipeilohy visited Sangihe Island and promised to end all illegal mining and declared the area a special enforcement zone. Less than one month later, the illegal mining operations were again in operation.
On September 11, 2026, Bahlil stated that ESDM could take action to shut down on illegal mining on Sangihe. However, the illegal mining operations are still openly operating, and no enforcement action has yet occurred.
Enforcement is not the solution. The only solution is for TMS to begin operations. Illegal mining operations cannot exist when a legal entity is in operation.
When approached for comment on September 16, 2026, Bahlil said TMS’s approval was “under discussion” but provided no further explanation before walking off.
Every day that illegal mining continues, more state resources are stolen, while environmental damage accumulates and the government loses the opportunity to bring the activity under formal supervision.
The delay in issuing approval to TMS to begin operations also increases the legal liability to ESDM and risk the State being accused of functional expropriation. The consequences of such an accusation would do tremendous damage to the international reputation of Indonesia as an attractive jurisdiction for foreign investment.
Mining Experts Call for Criminal Investigations
The issue has now drawn criticism from mining experts, who say illegal mining should not be allowed to continue and have called for a criminal investigations to determine State Losses.
Mining observer Rizal Kasli, an Advisory Board member of the Indonesian Mining Experts Association (PERHAPI), said TMS should be given the opportunity to conduct mining activities under government supervision.
The central government has the authority to deal with illegal mining activities and Rizal questioned why President Prabowo Subianto’s orders to end all illegal mining activities were not being carried out.
“The company should indeed be given an opportunity to operate properly and be supervised in implementing good mining practices so that it can provide benefits to the surrounding community and the state. Enforcement has been ineffective and so allowing TMS to operate is the only way to permanently end illegal mining on Sangihe,” said Rizal on Wednesday, Sept. 23, 2026.
He further questioned how these illegal operations appear to be able to exploit Indonesia’s mineral resources freely, and called for criminal investigations to determine State losses.
“There must be parties cooperating with them and protecting their illegal activities. These people must hold positions of influence and they should be investigated by the Corruption Eradication Commission or Attorney General’s Office. The illegal miners and their protectors should face criminal charges for losses to the State,” he said.
According to Rizal, the state, as the owner of mineral resources, must benefit from mining activities, particularly through state revenues, environmental protection, occupational health and safety, and improvements to the regional economy.
Ministry of Energy and Mineral Resources Must Act
Deputy Chairman of the Indonesian Mining Experts Association (PERHAPI) Resvani has also called for criminal investigation and has urged the Directorate General of Law Enforcement (Gakkum) at the Ministry of Energy and Mineral Resources (ESDM) to follow up on PT Tambang Mas Sangihe’s report concerning illegal mining activities within its concession area.
Resvani said illegal mining cannot be justified. According to him, law enforcement against illegal mining must be carried out seriously and firmly because such activities involve mineral resources and reserves that belong to the state.
Resvani said licensed mining companies do have an obligation to safeguard their mining areas. However, this obligation does not mean that companies have the authority of law enforcement agencies to directly confront illegal mining activities.
“What licensed mining companies can do if there is illegal mining within their mining area is to report it to the relevant law enforcement authorities,” he said.
Resvani also said the establishment of the Directorate General of Law Enforcement at the Ministry of Energy and Mineral Resources provides an enforcement mechanism that can be used to handle reports concerning illegal mining activities.
Therefore, he said, PT TMS’s report concerning illegal mining activities within its concession area should be submitted to the relevant authorities for follow-up.
Resvani also said the government has demonstrated a firm stance against illegal mining activities in other locations. For unknown reasons, the illegal miners on Sangihe have not been subject to any arrest.
According to him, President Prabowo Subianto has expressed opposition to illegal mining practices and the government has taken action against a number of illegal mining operations – just not on Sangihe.
TMS: Enforcement Alone Has Failed
TMS President Director Terrence Filbert said the company has repeatedly reported the illegal mining and has cooperated with government authorities, but the continued return of the miners demonstrates that temporary enforcement measures have not solved the problem. The easiest way to end illegal mining and allow the people of Indonesia to benefit is for ESDM to approve TMS Production Operations.
“We have spent more than IDR 30 billion in 2025 complying with the government’s instructions to get our Approval for Production Operations reissued and will spend up to a trillion more preparing to operate legally. It’s incredibly frustrating that while we wait for our approval, illegal miners from mainland China are operating openly on an industrial scale and stealing Indonesia’s natural resources,” Filbert said.
“We want to operate legally, transparently and under strict government supervision—paying taxes and royalties, creating jobs, protecting the environment and ensuring that Sangihe’s mineral resources benefit Indonesia and the local community,” he said.
“I’m obviously very happy that Minister Bahlil has indicated that ESDM would take action to shut down illegal mining operations. Temporary closures have not worked because the miners simply return after enforcement teams leave. The only solution to permanently end illegal mining is for ESDM to grant TMS the approvals to begin operations”
“Every day this situation continues, more gold is extracted illegally, environmental damage increases and the loss to the state increases.” Mr Filbert concluded.
