BUSINESS STRATEGY EFFECTIVENESS OF A PILOT PROJECT FOR COOPERATIVES OF ILLEGAL GOLD MINERS: A CASE STUDY OF ANTAM PONGKOR GOLD MINE

• Main Author: Imam Prasetyo, Sodiek
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/84046
• Institution: Institut Teknologi Bandung

This research explores the effectiveness of the business strategy of a pilot project designed to co-operate with illegal gold miners, focusing on the case of Antam's Pongkor Gold Mine in West Java. The context for this research lies in the significant challenges faced by the mining industry due to illegal gold mining activities, which pose environmental, economic and social risks. The research aims to provide a comprehensive evaluation of the co-operative model as a strategic solution to address these challenges. PT Aneka Tambang Tbk (Antam) is a leading mineral and metal mining company in Indonesia, established through the merger of several state-owned enterprises. Gold, silver and precious metals are key contributors to Antam's revenue, accounting for the majority of the company's earnings in recent years. The Pongkor Gold Mine, Antam's only operating gold mine, has been severely impacted by illegal gold mining activities, known as PETI (Unlicensed Gold Miners). This activity not only disrupts operations, but also results in considerable economic losses and environmental degradation. The main objective of this research is to assess the effectiveness of a pilot project that integrates illegal miners into a formal cooperation framework. The project aimed to reduce the negative impacts of illegal mining while providing socio-economic benefits to local communities. The specific research objectives were to identify the key stakeholders involved in the cooperative model, evaluate the economic contribution of the cooperative model to Antam and local communities, assess the effectiveness of the cooperative model in reducing environmental impacts, and analyse the impact of the cooperative model on the relationship between Antam, local communities and stakeholders. This study aimed to assess the economic, environmental and social impacts of integrating illegal miners into a formal co-operative framework. Quantitative data was collected through a structured questionnaire distributed to key stakeholders, including Pongkor employees, local community members, and co-operative members. In addition, qualitative insights were gained through semi-structured interviews with different levels of Pongkor management. This analysis focuses on the economic, environmental, and social dimensions of the pilot project, using ii theoretical frameworks such as sustainable mining practices, co-operative theory, and stakeholder theory. The results show that the co-operative model has significant potential to address the challenges of illegal mining. Key findings include that the co-operative model successfully engaged a wide range of stakeholders, including government agencies, Antam management, and local communities. This collaborative approach facilitated the formalisation of illegal miners into a legal and regulated framework. The co-operative model contributes to economic growth by providing stable income and employment opportunities for former illegal miners. It also reduces operational disruptions and resource theft, resulting in financial benefits for Antam. The co-operative model implements sustainable mining practices, thereby reducing environmental degradation. The use of safer mining techniques and proper waste management practices minimise adverse impacts on the ecosystem. The project improves relations between Antam and local communities by addressing social tensions and promoting social responsibility. The co-operative model empowers miners, improves their livelihoods, and fosters community development. The co-operative model demonstrated its effectiveness as a strategic solution to integrate illegal miners into the formal economy while promoting sustainable mining practices. The findings suggest that the model can significantly contribute to the economic, environmental and social sustainability of mining operations. The research underlines the importance of stakeholder engagement, sustainable practices, and inclusive economic development in addressing the challenges of illegal mining. The research recommends the following actions to improve the effectiveness of the cooperation model: strengthening regulatory support, sustainable stakeholder engagement, and scaling up the model. Governments should provide a strong regulatory framework to support the formalisation of illegal mining activities and ensure adherence to sustainable practices. Continuous dialogue and collaboration among stakeholders is essential to address emerging challenges and adapt the cooperation model to changing conditions. Successful aspects of this pilot project should be replicated in other mining areas facing similar challenges, with adjustments to the local context. This research contributes to the broader academic discourse on sustainable mining practices and offers practical insights for policymakers, mining companies and communities in managing the complexities of illegal mining.