China's illicit gold push reshapes global mining, fuels environmental destruction: report

Global Watch | 2025-08-27

China's massive gold appetite -- part of a strategy to reduce reliance on the US dollar, guard against sanctions and boost monetary influence -- is fueling a surge in illicit mining across the Global South, according to a report by The Washington Post.

The investigation, drawing on satellite imagery, trade data, government records and field visits, found widespread environmental destruction from Indonesia to Ghana to French Guiana tied to these operations.

The Post said it "obtained internal government documents and visited a half-dozen secluded gold-mining communities being transformed by Chinese-led operations."

According to the report, Chinese mining investors in Indonesia advertise "free and easy" access to gold deposits on Chinese social media. UN officials warn organized crime now permeates the global gold trade, with cartels, terrorist groups and mercenaries benefiting from the $3,000-per-ounce price -- often in cooperation with Chinese concerns operating from "mine to market."

Investigators say most illicit operations are privately financed by Chinese nationals working with little oversight from Beijing, The Post said, adding that gold-rich nations accuse China of enabling resource theft and ignoring requests to help crack down on syndicates.

Opaque gold reserves

In Ghana, hundreds of Chinese nationals have been arrested, but many return quickly, the report found. At the same time, Indonesia is reporting near-daily discoveries of illegal mines linked to Chinese operators and French defense analysts say Chinese investors form a "crucial logistical chain" in South America's illegal gold networks, The Post said.

China, one of the world's top gold buyers for over a decade, keeps opaque reserves. According to the report, analysts suspect the People's Bank of China acquires far more than it declares and Goldman Sachs estimates some monthly purchases are underreported by as much as 60 tonnes.

The People's Bank of China did not respond to requests for comment, according to The Post.

Illicit Chinese operations differ from local artisanal mining, which relies on hand tools and from regulated industrial mining. Syndicates bring heavy machinery, operate without environmental safeguards, and increasingly use cyanide instead of mercury -- boosting yields but worsening contamination, The Post said.

In 2024, Indonesian authorities uncovered an illegal mine on Lombok island spanning the equivalent of 184 football fields and producing an estimated $5.5 million in gold monthly, the investigation found.

Corruption is a major barrier to enforcement. According to The Post report, Indonesian officials admit prosecutions often stall, and even when Chinese nationals face trial, acquittals or light sentences are common. In one case, a mile-long illegal mine employing 80 people resulted in convictions being overturned due to judicial misconduct, it said.

Beijing publicly insists its citizens abroad follow local laws, but officials in gold-producing countries say cooperation is rare, according to the newspaper. Chinese representatives avoid multilateral discussions on illicit flows, such as the OECD's 2025 forum in Paris, the report added.