Indonesia is one of the largest gold-producing countries in the world and possesses reserves of diverse natural resources. Precious metals are among the raw commodities of this country. Gold is used as an investment asset, as a material for creating beautiful jewelry, and as a means of currency exchange. There is an opinion that precious metals are among the safest investments today because they have low inflationary risk, protecting financial assets.
Where were the first gold deposits and how does Indonesia use its own natural resources?
History of the discovery of gold mines
Gold mining in Indonesia began with the arrival of Chinese immigrants over a thousand years ago. During the Dutch colonial period from 1600 to 1942, gold mining in Indonesia was very limited.
Additionally, gold ore reserves were discovered in the South Banten region, particularly in the Chikotok mine owned by PT Antam (Aneka Tambang). The Lebong Tandai mine in Bengkulu was also established around 1906-1910, followed by the opening of other mines such as Simau (1910), Mangani (1913), Salida (1914), Lebong Simpang (1921), and Tambang Savah (1923). Other mines opened after the 1930s, including the Belimbing area, Gunung Arum in 1935, and the Bulangsi and Muara Sipongi areas in 1936, as well as Mimika in Papua. However, most gold mines were closed during World War II. After the war, only a few mines were reopened.
Gold production did not show significant growth until the 1980s. The total production volume recorded in 1985 was only about 2.6 tons.
Which gold mines continue to develop?
Gold discovery due to geologist's irritation
The gold mining industry in Indonesia began to develop during the Dutch colonial period. In 1850, geological surveys were conducted, and the extraction of mineral resources expanded to all corners of the archipelago. The province of Mimika in Papua, particularly rich in gold and managed by PT Freeport Indonesia, is of particular interest. A Dutch geologist and photographer discovered a gold and copper mine in this region.
It all started with the irritation of this geologist, Jean-Jacques Dozy. He heard that the Japanese wanted to climb Mount Carstensz in Western Papua, and this posed a threat that Japan might take over the territory and expand its colony. Therefore, Jean-Jacques and his colleagues hurried to be the first to ascend the mountain. Before that, they conducted a reconnaissance flight on an old Sikorsky seaplane, performing aerial photography. Then, the three of them climbed to the peak of Carstensz. They were accompanied by 38 people from the island of Kalimantan. However, only the strong survived because the ascent to the mountain was indeed challenging.
The trio, consisting of Dozy and his colleagues, reached the summit they had seen during the aerial photography, with an elevation of 4,000 meters. It was there that Dozy discovered the geological exposure of Ertsberg with layers of gold-bearing rock formations. The news reached Forbes Wilson, a reconnaissance manager at Freeport Minerals Company, who was inspired to embark on an expedition with a colleague in 1960.
The Freeport team initiated negotiations for the implementation of a mining contract in Ertsberg, and in 1967, a contract for the work was signed. As a result, Freeport became the sole company designated for the development of the 10-square-kilometer Ertsberg area.
Currently, in Papua, approximately 240 kilograms of gold are extracted daily, and the entire country boasts a total gold reserve of 1.76 million tons, sufficient for Indonesia's development for a couple of hundred years. The Tujuh Bukit gold mine, also known as Tumpang Pitu, located in Banyuwangi, East Java, and managed by PT Bumi Suksesindo (BSI), has been in operation since 2016. Estimates suggest that this mine holds 28 million ounces of gold, or around 80 tons.
By the way, if there is a desire to immerse oneself in the atmosphere of the past and feel the spirit of geologists and the courage of gold prospectors, one can watch the movie "Gold."
The process of turning rock ore into pure gold
The process begins with the exploration of gold ore, which includes impurities and minerals, followed by a series of technological operations:
1. Crushing of raw material
2. Separation into various fractions
3. Chemical treatment, including plucking out impurities and purifying foreign substances.
4. Heat treatment, which allows you to separate precious metals from other components.
There is a method that helps separate as much gold as possible by mixing gold ore with sand in a container, allowing the gold to settle on its own. However, this process is often time-consuming. Additionally, some individuals use mercury in the process of refining precious metals, which is hazardous to human health.
In the past, the process occurred through traditional, manual methods. Such techniques reduced the reliance on specialized machinery, leading to cost savings in the mining process. However, more frequently, heavy machinery and modern equipment are employed. There are short documentary videos on YouTube showcasing gold mining, for example, in Papua. Here are a couple of them: Freeport Indonesia, Gold Production Process.
Selling, buying and price of gold in Indonesia
One of the reliable state-owned enterprises for selling or buying gold is Pegadaian, also known as Lombard. It has a branch network that is evenly distributed throughout all regions of Indonesia.
There is also a Pegadaian branch on Bali. For detailed information, you can contact them at +62361880498.
Another option is Antam, where gold can be purchased directly. Due to high demand, there are sometimes up to 150 people in line per day. To maintain order, a system has been established: individuals need to register in advance and obtain a queue number at the security post.
As of December 20, 2023, the price for 0.5 grams of Antam gold, as determined by Pegadaian, was 625,000 Indonesian Rupiahs. Meanwhile, the current price for 0.5 grams of 24-carat gold from UBS is 596,000 Rupiahs (38 USD). In the country, there are numerous shops specializing in the sale of gold and other precious items.
Today, approximate prices for gold with tax:
0.5 g – 614,000 rupees,
1 g – 1,128,000 rupees,
3 g – 3,268,000 rupees,
10 g – 10,771,863 rupees.
Gold is exported to Singapore, Switzerland, Hong Kong, Australia, Thailand, South Korea, China. Also in the USA, United Arab Emirates, Japan, Mexico.
In addition to traditional gold, Indonesia also has rose gold, which has been gaining popularity recently. If you look at the color, the jewelry has a slightly reddish-gold hue. Why is that?
Pure gold is blended with one of the metals such as silver, copper, nickel, bronze, or zinc to give the jewelry a new shade and enhance its durability. Typically, the composition of the mixture is 75% pure gold and 25% bronze (this is the most common purity for high-quality expensive jewelry and is denoted as 18 karats, 750 fineness). There is a slightly lower gold content of 58.5%, with the rest being other metals, denoted as 14 karats, 585 fineness.
The higher the percentage of copper or bronze in the jewelry, the redder its color. In some items, the predominant color is red, while most exhibit a pure gold hue, and some have a slight pinkish tint.
In Indonesia, it is called "Rose Gold" and is used not only in the production of jewelry but also in watches, bags, footwear accessories, smartphones, and clothing. The prices are generally affordable.
Nevertheless, rose gold has its drawbacks, such as allergic reactions caused by the presence of copper. Therefore, for some individuals with sensitive skin, this type of gold may not be the best choice. Additionally, the alloying of metals with gold in some cases can result in a change of color. When making a choice, personal preferences, durability, and the reputation of the seller are important considerations.
Five Popular Gold Shops in Bali
Bali is a densely populated island where the local population is very interested in acquiring precious jewelry. Of course, temporary visitors to the country, such as tourists, are also eager to treat themselves and their loved ones to beautiful ornaments.
The Palace National Jeweler - the staff at this store is very friendly and patiently explains the types of available jewelry. The precious metals in this place are incredibly beautiful and come at an affordable cost with a complete collection. All prices are listed on the website.
Working hours: 10:00 AM – 10:00 PM.
Official website: Palace Jeweler
Melati Gold Shop - a great place for buying and selling precious metals. The offered affordable price per gram is quite competitive.
Working hours: 10:00 AM – 9:00 PM.
Toko Emas Kohinoor offers constantly updated models of jewelry. Excellent service and respectful attitude towards customers.
Working hours: 9:00 AM – 9:00 PM.
Official website: Gallery Kohinoor
Toko Perhiasan Emas Rosiana offers products of sufficient quality, which is why there are always many customers. The prices are in line with international standards.
Working hours: 8:00 AM – 4:00 PM.
Toko Emas Dewata Ayu is the perfect gold shop for those with limited finances who still want to own beautiful pieces. The collection of gold jewelry here includes numerous models.
Working hours: 7:30 AM – 7:30 PM.
Jewelry collection on Instagram: Dewataayugoldshop
WhatsApp consultation phones: +6281236808277, +6281237384984, +6281337747737.
Street of jewelry shops in Denpasar
A number of "gold" shops are located practically on the same street in Denpasar or close to each other. Here is a whole scattering of jewelry stores:
Unusually, there are street gold traders right on the sidewalk near the roads, displaying their products in small glass cases. They offer convenient ways for selling or buying jewelry.
Here, you can negotiate with each other until reaching the desired price. Sometimes, the price ends up being better than what's available in the market. The earnings of such sellers may not be stable, but luck can play a role, and the amount earned can be more than satisfactory.
Use of gold in Indonesian culture
In the past, gold jewelry was used in the cultural practices of the Baduy community in Banten, not far from Jakarta, and in the Batak Karo community on the island of Sumatra. Gold ornaments during local wedding celebrations are like an added cultural layer to the existing traditions. In this way, local residents aim to showcase their excellent social and economic status. Gold adorns the hair, neck, and hands. Residents try to emulate the wealthy kings of the past and demonstrate that their family enjoys a similar high quality of life.
Local Batak residents have their own language, unique traditional houses adorned with gold and musical instruments, setting them apart from other Indonesians. The question arises: was gold truly used in the times of kings, as believed by the Batak Karo tribe? Did they draw inspiration from these views to create their "golden" culture?
The meaning of gold during the time of rajas (kings)
Since Hindu-Buddhist times, rulers and nobles of Java enjoyed seeking and collecting gold, giving rise to a tradition of gold accumulation. At one point, this precious metal was sold in the market at a very low price. Despite this, the value of this gold never diminished.
Rulers and nobility in Central Java, particularly in the village of Wonoboyo, used it as a symbol of power. Many items and modes of transportation in their collections were made from precious stones: tableware, royal chariots, palanquins (covered litters), and much more. This clearly demonstrated differences in status, grandeur, and luxury. There is a suggestion that one type of tableware could contain up to 50 kg of gold!
There were even golden necklaces for domestic animals—elephants or horses—that they wore during royal processions.
It has been proven that the treasures of Wonoboyo date back to the royal times, confirmed by the figures on two bowls depicting characters from the Ramayana, an early Javanese period, found in other locations.
Archaeological research has shown that the gold in the Wonoboyo province dates from the late 9th century to the mid-10th century.
In 1990, a Chinese envoy discovered thousands of gold items in the fields of the Wonoboyo village, Klaten province, Central Java. Approximately 7,000 gold and silver coins, various ornaments, vessels, and other items are stored here. The Wonoboyo treasure collection is known as the largest treasury of gold items in Indonesia.
Luck and a gold find
In the 1990s, six Indonesians found golden items and coins in a rice field. The government awarded a prize of 500 million rupiahs to the landowner and the six discoverers. Each of the six received a share of 38 million rupiahs, while the owner of the rice field received 239 million rupiahs. It was a grand event that was talked about for a long time. There is a short film about Woloboyo on YouTube: Harta Karun Emas Wonoboyo.
Interestingly, not only objects and artifacts were made of gold in past centuries, but also the external structures and walls inside the Royal Palace (Istana Kerajaan Majapahit) were filled with wrought gold. From 1293 to 1527, 13 kings ruled in this kingdom. Moreover, the Palace of the Majapahit Kingdom is adorned with other precious stones, and the roof is made of pure gold.
Historical records state that nothing could compare to the splendor and beauty of the Majapahit Kingdom's palace at that time. Even the details of wall carvings and columns using gold were impossible to imitate. Information about the discoveries of the old Majapahit Palace and other interesting details can be found here.
In general, Indonesia is full of mysteries, rich in natural resources, and beneath its surface, it not only holds gold reserves but also other significant metals, minerals, and rocks. The list of mined products includes silver, diamonds, platinum, phosphate, coal, natural gas, crude oil, copper, marble, aluminum, tin, and more.