Business Strategy Effectiveness of SOE Gold Mining Pilot Project for Illegal Miners in Indonesia

The increasing challenges of illegal mining activities have prompted mining companies around the world to develop innovative strategies to address the problem. This research evaluates a pilot project at the Pongkor Gold Mine in Indonesia, where a cooperative model was implemented to formalise illegal gold mining activities. The research aims to assess the economic, environmental, and social impacts of integrating illegal miners into a formal cooperative framework. Quantitative data was collected through a structured questionnaire distributed to key stakeholders, including Pongkor employees, local community members, and cooperative members. In addition, qualitative insights were gained through semi-structured interviews with different levels of Pongkor management. The results show mixed perceptions regarding economic growth, with local community and cooperative members reporting significant benefits, while Pongkor employees remain sceptical. Environmental protection efforts are positively recognised by cooperative members, but less so by the wider community and employees. Increased social responsibility was widely recognised by all groups, highlighting improved social relations and stability. The findings underscore the need for better internal communication, structured engagement, and sustainable practices to ensure the long-term success of the co-operative model. This research provides a viable framework for transforming illegal mining activities into regulated and sustainable operations, which contribute to economic stability, environmental sustainability and social responsibility.