Conflict gold: New report urges industries to use ‘responsible’ sources

With more than $4 billion in gold flowing out of East and Central Africa into international markets annually, the technology, jewellery, financial, and automotive sectors are increasingly at risk of purchasing gold via Dubai that benefits armed groups responsible for mass atrocities in multiple countries in the region, including Sudan, the Democratic Republic of Congo (DRC), the Central African Republic (CAR), and South Sudan via Dubai in the United Arab Emirates (UAE), according to a new report compiled by Sasha Lezhnev of The Sentry released yesterday.

As reported by Radio Dabanga in January, the director of the Sudanese Company for Mineral Resources, Mubarak Ardol, reported in a press statement that the total gold production of Sudan in 2020 reached 36.6 tons, which is 9.6 tons more than in 2019.

This makes Sudan the second-largest producer of gold in Africa and the ninth in the world. The production however is driven by unregulated, artisanal (individual subsistence) mining, and until they were handed over to government control, the important mining area of Jebel Amer in North Darfur were under the control of El Junaid [Algunade] Company which is linked by family ties to Lt Gen Mohamed Hamdan ‘Hemeti’, Deputy Chairman of the Sovereignty Council and Commander of the paramilitary Rapid Support Forces.

The Sentry briefing entitled Conflict Gold to Responsible Gold – A Roadmap for Companies & Governments highlights five key policy issues, laying out how the status quo is incentivising the conflict gold trade while disincentivizing the responsible artisanal trade and, importantly, what can be done to change this.

“International regulations, due diligence standards, and industry auditing programs established over the past decade to combat the conflict gold trade have significantly improved awareness of the problem” the report suggests however, there are five main obstacles to a sustainable solution, presenting new opportunities for governments and industry to have an impact, Sasha Lezhnev says. These include lack of consequences, weak policies and enforcement in Dubai and other world gold centres, imbalanced gold export taxes, policy disincentives; and lack of financing.

The main recommendations of the briefing are to establish greater consequences for trading in conflict gold, strengthen policies and enforcement in Dubai, to harmonise gold export taxes, to remove disincentives for artisanal miners, and for companied to source from conflict-free artisanal mines. Refiners that have passed credible international audits should increase sourcing from responsible artisanal gold projects in the region.

Read the full briefing here

*Jebel Amer gold mines

The Revolutionary Awakening Council (RAC) headed by former Janjaweed leader Musa Hilal seized control of the Jebel Amer gold mining area in North Darfur in July 2015. According to a UN Security Council report in April 2016, Hilal and his entourage were profiting from vast gold sales in Darfur.

Sources claim that Lt Gen Mohamed Hamdan ‘Hemeti’, Commander of the paramilitary Rapid Support Forces, was behind the arrest of Hilal in 2017, and took over the operation of the mines.

As for the El Junaid [Algunade] Company he is linked with by family ties, Hemeti says the company extracts between 30-40 kilograms of gold a month from the Jebel Amer mines i, with which it supplies hard currency to the Central Bank of Sudan.

According to the INGO Global Witness, Hemeti captured a large part of the gold market in Sudan in previous years. Reuters stated in November that the “militia leader grew rich by selling gold“. In December 2019, he reportedly started arrangements to hand the mining areas in Jebel Amer to the government.