Mining activities in addition to increasing state revenues also have direct and indirect impacts on surrounding communities. The direct impact of mining activities is related to deforestation and environmental degradation in the area. One impact is the quality and quantity of water is reduced due to soil sedimentation and mine waste. Indirect impact associated with health effects in the form of health care costs per household due to living in the mining areas. The data used in this study are BPS data in 2004 and 2015 National Socioeconomic Survey data as well as data Riskesdas. The method used in this study is the Difference-in-Difference or Double Difference method and descriptive analysis method to see how the influence of mining activities on water quality and the health costs of surrounding communities.
Based on the analysis of mining activities, health costs have a monetary value of the implicit costs of around 0.024% of Indonesia’s GDP. Households in mining areas also have to spend more time to collect drinking/clean water for about 5-30 minutes, tend to have a lower drinking water consumption, and quality degradation tends to be colorless, not more smelly/foamy. This research could be an input to increase mining royalty policy because the impact of mining activities is also significant.