27 October – When Bali-based jewelry manufacturer, Garden of the Sun, purchased over 750 grams of mercury-free gold bullion directly from artisanal miners in Tatelu village in North Sulawesi Province, a breakthrough to create a fair price mechanism was set in motion.

For the first time, artisanal miners in Tatelu were able to conduct a direct transaction with a buyer in the formal gold market, rather than dealing with an intermediary traders known as Daeng.

As a result of the business transaction with the jeweler in Bali, not only did the miners receive higher than usual Daeng prices, but they also gained new knowledge and skills in formal gold market trading, which included quality checks from an official laboratory.

The business transaction was made possible by UNDP’s GOLD-ISMIA Project which has established direct links between gold companies and jewelers with artisanal miners, thereby shortening the value chain of gold mined by artisanal miners, including those in Tatelu Village. Establishing a mechanism for fair pricing is another key goal of the Project, aside from eliminating the use of toxic mercury among Indonesian artisanal miners.

Local miners in Tatelu have relied on Daeng for decades to sell their gold bullion through an informal market "We don't have a choice, but to sell our gold to Daeng, in the cash and carry sales system. This is because we are in desperate need of funds to allow us to improve our capital turnover for further processing," said Head of the Koperasi Batu Emas, a mining cooperative in Tatelu, Henry Walukouw who is well aware that non-transparency in price decisions may result in gross undervalued sales.

The initiative to link traders directly with artisanal miners has also piqued the interest of socially conscious businesses, including Bali-based Garden of the Sun (GoTS), a jewelry manufacturer committed to supporting ASGM miners by upholding responsible mining processes and focusing on social and environmental aspects.

GOLD-ISMIA facilitates communications between the Batu Emas Cooperative and GoTS and facilitated a process whereby GoTS agreed to pay at a higher price than a local market. The full payment and the specific amounts will be adjusted based on the final grade informed by laboratory test results of the purchased gold.

Despite the restrictions on mobility caused by the COVID-19 pandemic, the two parties were able to reach an agreement after a series of virtual negotiations that helped establish mutual trust. Building trust was necessary because the Tatelu miners needed to send gold bullion to Bali, which was about 1,500 kilometers away, via courier.

In facilitating the business transaction, the Project also put a priority on women miners who often face constraints in accessing essential productive resources, knowledge, technology, market information and financial assets. Therefore, aside from facilitating to formal market, GOLD-ISMIA Project also has assisted a women’s mining group in Tatelu to strengthen their self-esteem and leadership capacity, thus ensuring their control over fundamental productive assets and later establishing connection to get a better markets and benefits from selling mercury-free gold at premium price.

Paulin, a mining cooperative member in Tatelu who took part in the gender training said that GOLD-ISMIA project has involved women miners to learn about the equality in the workplace, organization and family.

Empowering and enabling men and women miners to participate more effectively in formal market also translates into improved well-being for their families, thereby building human capital for future generations.

Returning to Tatelu village, the sale of gold ounces may be a milestone for the miners as they enter the formal gold market, but the GOLD-ISMIA Project still has some work to do with six other locations in Indonesia, awaiting similar intervention.

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Written by Stephanie Natalia Mapaliey, Dzul Afifah Arifin.

Reviewed by Jatu Arum Sari, Harti Ningsih and Baiq Dewi Krisnayanti.

Edited by Tomi Soetjipto and Ranjit Jose