Sudanese Mines
Sudan’s mineral wealth has been a key driver of the country’s development, but a plethora of challenges have prevented a fully fledged mining industry from emerging. Civil strife in the early 2000s and the creation of South Sudan in 2011 posed significant difficulties for investors and operators alike.
However, a new law approved in 2015, the Mineral Wealth and Mining Development Act, is helping to attract foreign investment and bolster the sector’s growth prospects. But despite strong support for the industry from the government, it is not without its problems.
Those in charge of gold mines, and those who benefit from them, have a history of abuses that threaten the environment and human rights. In addition, there is growing evidence that some of the region’s most valuable gold deposits are located in areas of conflict (Darfur and South Kordofan) that have a long track record of abuses against local communities.
The Enough Project warns that if gold mining and extraction continue, it will only serve to fuel tensions in the country. The organization estimates that the gold industry may contribute to as many as 500,000 deaths in the region over the next decade.
A number of international and local mining companies have entered the market in recent years, including Rida Group, whose Al-Abedeya and Malakal gold projects are currently under construction. The company aims to become one of the top five mining companies in Africa and has expanded its operations outside of Sudan, with plans for the Edikan gold mine in Ghana and Sissingue and Yaoure in Cote d’Ivoire.
As a result, the government of Sudan is now attempting to regulate and tax the sector more closely. The national government imposed a 10 percent income tax on gold miners in 2008.
Problems With Sudanese Mines
More recently, the central bank has also created a monopoly system to control the market for artisanal and small-scale gold mining. The monopoly is designed to protect the interest of the government by ensuring that all artisanal and small-scale gold producers have access to a lucrative market, but has in fact created a situation where locals can only sell their products to other locals or a centralized intermediary based in Khartoum.
The monopoly has also acted as an incentive for smuggling, especially by allowing the export of low-quality and tainted gold. As a result, the smuggling of gold is estimated to cost the country around $1.9 billion in 2021.
Meanwhile, a whistleblower at the central bank showed CNN a spreadsheet that estimated that 32.7 tons of gold was unaccounted for in 2021. That amount represents more than 5% of the total gold in Sudan.
According to sources, the country’s biggest gold smuggling operation is run by Russia. It is accused of driving most of the smuggling and even circumventing Sudan’s own regulations to do so under the guise of a local company, Al-Solag.
This company is owned by Meroe Gold, a US-sanctioned Russian mining business, according to five official Sudanese sources and company registration documents reviewed by CNN. It is believed to have smuggled around $1 billion in gold in the past year.