Gold Ridge suffers huge financial losses brought on by illegal miners

Government recently suspended the issuance of Gold Dealers Licences to individuals in the wake of increased illegal mining at the Gold Ridge mine site in Central Guadalcanal. Will this put a stop to these illegal activities? RONALD TOITO’ONA reports…. 

When Gold Ridge Mining Limited (GRML) took over the abandoned mine site in central Guadalcanal in 2017, they knew quite well the mammoth task that lies ahead to get the mine up and running again.

As it moves in, renovating and rebuilding the site’s mining infrastructure that was looted and destroyed during the ethnic tension period of 1998-2003 were the first major challenges.

But nothing has prepared them quite well for the unexpected surge of trespassers, who today are flooding the mine site, camped around the mine pits, and openly carrying out illegal mining on the company’s tenement.

At one stage in August last year, up to 400 trespassers would occupy the mine pits daily to dig for gold.

“It’s a real challenge,” admits Benjamin Afuga, a local director of GRML.

“We are cautiously dealing with the issue, noting that those involved were actually members of our landowning tribes,” Afuga added.

GRML is jointly owned by Chinese firm Wanguo International Mining Group (70 percent), AXF Resources (20 percent) and landowners through Gold Ridge Communities Investment Ltd (10 percent).

It’s currently one of the country’s top foreign earners.

However, the continuing illegal mining is threatening the company’s operations, as well as  bringing in financial losses to GRML, the national government, and Guadalcanal Province.

Why are trespassers infiltrating the mine site despite repeated warnings from the company and the police to stay out?

One of the reasons lies in Joseph’s story.

From nothing to something

For nearly two years, Joseph (a pseudonym) , a school dropout, struggled to support his family as a cab driver in Honiara, barely making enough to meet his family’s basic needs. 

However, a single passenger run to the Gold Ridge area one afternoon would change Joseph’s fortunes for the better.

Introduced to the illegal gold digging by his cousin, a seasoned participant in the trade, Joseph found himself engaged by a landowner to do the dirty work on his behalf.

“I never imagined I’d make this much money so quickly,” he recalled. 

Despite the danger and exhaustion of the work, the anticipation of better earnings for his family drove him to endure the harsh conditions. 

“The work was relentless,” Joseph explained. “Digging through mud and rocks was dirty and dangerous. There was no safety gear or protection from accidents, but the end reward made it all worthwhile.” 

After weeks of gruelling labor, Joseph made a calculated decision: he discreetly collected some gold dust before making his escape. 

He left the mine site, carrying with him gold worth an astonishing SBD$700,000—a sum beyond his wildest dreams. 

This newfound earning enabled him to build a permanent home for his family at Tuvaruhu, Honiara, and purchased a reconditioned vehicle.

Illegal Mining: Landowners Taking the Lead

The illegal gold digging at Gold Ridge is not a new phenomenon.

According to Afuga, himself a landowner, the practice has been part of community life for years – even before the current operation.

“Gold digging has historically served as a source of income for the locals,” Afuga said.

“This practice intensified notably following the suspension of St. Barbara’s operations in 2014 and during the COVID-19 pandemic,” he added.

“I think this was driven by limited economic alternatives for landowners, a prevailing sense of entitlement among locals who view Gold Ridge as ancestral land, and the weak enforcement by governmental agencies. 

“Furthermore, reports suggest that foreign nationals, particularly from China, have exploited residents to facilitate gold purchases, exacerbating the issue. 

“Additionally, the shareholding structure of Gold Ridge has led many landowners to perceive the mine more as a communal asset than a commercial enterprise, complicating the situation further.”

Since the reopening of the mine, the pits of Gold Ridge have become temporary settlements where illegal miners, often accompanied by friends and acquaintances from across the country, dig and pan for gold around the clock. 

Gold buyers and landowners

Illegal mining at the Gold Ridge mine site thrived because of attractive gold-buying prices.

At the mine site, local buyers normally pay SBD$480 for a gram.

However, according to those in the know, prices were often dictated by Chinese buyers in Honiara.

“So if the Chinese buyers decided to lower their price, those at the mine site will also reduce theirs. It could go as low as SBD$200 to SBD$250 per gram,” one dealer told In-depth Solomons.

A Chinese buyer operating in the Henderson area says he pays SBD$550 if it’s 50g and below, and $560 if it’s above 50g. 

Officials from the Ministry of Mines, Energy, and Rural Electrification (MMERE) have confirmed that those buying gold at the mine site are landowners.

“They are the ones who brought in outsiders to the mine pits and sort of got them to work for them,” one official explained.

During a recent visit to the Gold Ridge Mining site, In-depth Solomons spoke with several landowners and illegal miners. 

Three landowners admitted to hiring workers from other provinces.

“We bring in these people to work for us. They dig for gold, then must sell it back to us. It’s part of the agreement,” one landowner, who asked not to be named, said.

The landowner, who possesses a gold-buying license, noted that these workers live in makeshift tents on-site, shifting from night to day shifts recently due to their living arrangements. 

One worker, a teacher who also asked not to be named,  shared his experience.

“I traveled here with relatives during the holiday season after hearing good things from family and friends. 

“Now I’m working for a landowner. The arrangement is straightforward: we work for him, he feeds us, and we sell our finds to him. It’s good money, but the work is tough and demanding.”

Political connections

A number of gold buyers – both local and Chinese – are doing so without licences, according to ministry officials.

“We’ve confronted Chinese gold buyers who have no licences along the Lungga-Henderson corridor. These people purchase gold directly from illegal miners,” an official said. 

“Some manipulate provincial business licences issued by Guadalcanal Province to legitimize their operations,” he added.

The official expressed frustration over the difficulty in shutting down these operations, pointing out some of these unlicensed buyers have connections to certain Members of Parliament. 

“These gold buyers seem to have allies in high places. They interfered with our work.

The Permanent Secretary for the Ministry of Mines, Energy and Rural Electrification (MMERE), Dr Chris Vehe, has not responded to specific questions In-depth Solomons sent to him in early December 2024. Another follow up email in early January, was also never responded to.

Big loss for GRML

The illegal mining has had huge financial impacts on Gold Ridge Mining Ltd.

According to Afuga, a  company record from July 2024 revealed that Gold Ridge Mining Limited revealed that financial losses for the first half of the year (January-June) were estimated at around SBD$200 million.

He said the company incurred financial losses due to disruptions to operations, unauthorised extraction and theft of equipment.

“Illegal miners often damage infrastructure and delay planned operations, leading to production losses,” Afuga said.

“The company also incurs significant costs for security and removal exercises. 

“Disturbances during operations and threats of violence against our employees further compound these issues.”

Guadalcanal Premier Willie Atu recently highlighted the financial losses GRML has suffered as a result of illegal mining activities on its tenement.

“These illegal mining activities have cost GRML some $30 million. This figure does not account for the broader economic losses to the national government and Gold Ridge Mining Limited, which could run into billions,” Atu said. 

Gold buying on halt

Following submissions from GRML and its stakeholders, the Government responded by suspending the issuance of Gold Dealers licence.

Mines minister Bradley Tovosia said Cabinet took the decision after it became apparent that licences intended for local operators were being exploited by foreign financiers.

 “The Gold Dealers License was designed for locals, not foreigners,” Tovosia told parliament.

“When we issued these licenses to locals, they ended up engaging with foreign entities who had the financial resources to dominate the gold trade. 

“The process spiralled out of control, prompting me to take a paper to Cabinet, which led to the suspension.”

Tovosia said there were no accurate records on the number of licences previously issued but stated that stricter regulations would be implemented before any licences are reissued.

 “We need proper regulatory frameworks in place before we can reopen this process. The aim is to support locals in small-scale operations, such as gold panning, which many rely on for their livelihood.”

GRML takes action

On its part, GRML says it is taking steps to engage landowners in community development initiatives such as infrastructure improvements, employment opportunities, training programs, scholarships, and support for small-scale enterprises.

These are part of measures to address the illegal mining activities.

According to Afuga, resistance from local stakeholders remains a challenge. 

“Resistance often arises from mistrust, unmet expectations, and historical grievances. Additionally, the availability of alcohol within the mining lease areas has led to disruptive behavior, with intoxicated individuals frequently causing resistance and complicating our operations,” he said.

Furthermore, Afuga said GRML has enhanced policies and gate security protocols, employed Fijian nationals to strengthen security, increased patrols, and is utilizing surveillance technology in collaboration with law enforcement agencies.

As another year opens up, it remains to be seen whether the suspension of gold dealers’ licence and the raft of measures GRML had been implementing, will bring an end to the illegal mining and restore order at Gold Ridge mine site.