China’s hunger for gold — driven by both economic strategy and geopolitical calculation — is fueling a vast underground mining network that stretches across three continents. A Washington Post investigation has uncovered how Chinese-led “mining mafias” are transforming landscapes, corrupting officials, and embedding themselves in some of the most remote and resource-rich corners of the Global South.

From Remote Hills to Global Markets

In Indonesia’s Lantung village, vast stretches of forested hills have been stripped bare. Excavators gouge the earth, revealing gold-rich rock, while Olympic-sized pools brim with toxic leaching chemicals. These sites, run by Chinese syndicates, operate entirely outside the law, with no permits or regulatory oversight. Local residents describe them as a “mining mafia,” controlling access to the country’s most lucrative gold deposits.

Heru Hairuddin, a gold trader in Lantung, summed it up bluntly: “We don’t know where they take it. We only know it doesn’t stay here.”

Chinese-run mines have appeared in at least four Indonesian provinces in the past year. On Lombok island, one massive operation spanned an area the size of 184 football fields, producing $5.5 million in gold per month. The miners’ methods — heavy machinery, cyanide leaching, industrial-scale crushing — dwarf the capabilities of traditional “people’s mining” operations and inflict unprecedented environmental damage.

Strategic Gold Hoarding and Opaque Supply Chains

Beijing’s gold strategy is part of a broader effort to reduce reliance on the U.S. dollar, shield the economy from potential sanctions, and strengthen China’s influence over the global monetary system. The People’s Bank of China is believed to be purchasing far more gold than it publicly reports. Goldman Sachs research suggests monthly acquisitions have sometimes been 60 tonnes higher than official figures. Over 2024 alone, independent analysts estimate China covertly bought 570 tonnes — more than double its declared reserves.

David Soud, a minerals analyst for the OECD, explained: “Much of the gold they mine or otherwise acquire goes to China via highly opaque supply chains,” often without paying local taxes or royalties. Once smelted, illegal gold becomes indistinguishable from legally mined gold, blending seamlessly into global markets.

Criminal Nexus and Environmental Fallout

The United Nations Office on Drugs and Crime warns that organized crime groups — including drug cartels, armed militias, and mercenary outfits — are embedding themselves in the gold supply chain, often in partnership with Chinese mining concerns. These actors thrive in areas where governance is weak and enforcement minimal, allowing them to expand into untouched gold fields.

The consequences are severe. In Ghana, Africa’s top gold exporter, swaths of farmland and forest have been destroyed. In Indonesia, cyanide-laced runoff has killed crops and livestock downstream from mining sites. In French Guiana, Chinese investors form a “crucial logistical chain” for gold smugglers, costing France tens of millions annually in military enforcement efforts.

Local resentment has boiled over in some regions. In 2024, villagers in Lombok burned down a dormitory for Chinese miners after repeated disputes over land use and broken promises of compensation. Yet even after such confrontations, operations often resume within weeks, shielded by corruption and weak judicial outcomes.

Global Governance Gaps and Beijing’s Denial

Officials from Ghana to Indonesia accuse Beijing of failing to rein in its nationals abroad, ignoring requests for cooperation, and withholding data that could help track illicit flows. At the 2025 OECD conference on responsible mineral supply chains in Paris — the world’s most important annual forum on the topic — Chinese delegates avoided discussions on illicit mining altogether.

“In these conversations, China is the missing elephant in the room,” said Guillaume de Brier of the International Peace Information Service.

Despite mounting evidence, the Chinese government insists it tells its citizens to obey local laws and denies facilitating illegal mining. The Chinese Embassy in Washington stated it was “not aware” of the allegations.

A Global Environmental and Economic Threat

Illicit gold mining is now a multibillion-dollar industry, valued at more than $30 billion annually and producing at least 400 tonnes of gold per year, according to conservative estimates. The rapid industrialization of this underground sector is reshaping rural economies, destabilizing communities, and undermining environmental protections.

Pete Chirico of the U.S. Geological Survey explained the scale: “Individually, unsanctioned mines may be smaller than legal ones. But aggregated over a country, over multiple countries — it’s a massive, massive amount.”

For the communities caught in the crosshairs, the problem is existential. “Everything you see here, that hill and that hill and that one … stripped land — it’s the Chinese,” said Sabuddin, a miner in Lantung. “Only the Chinese can run an operation like this. No accountability, no stopping.”