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Sudan: Hemeti and the $16bn annual gold exports to the UAE

In depth
This article is part of the dossier: Tracking the great gold rush

By Patrick Smith
Posted on Wednesday, 13 January 2021 16:33, updated on Friday, 15 January 2021 10:24

Until January of 2020, when Sudan opened up the gold market to raise revenue, the central bank in Khartoum was the only entity allowed to buy and export gold, and it set up local trading centres.

This is part 3 of a series. For Part 1 click here. For Part 2 click here.

Since the revolution that ousted Bashir in April 2019, Sudan’s gold trade has become central in the country’s power politics. But under President Omar al-Bashir’s regime, many artisanal miners dealt with warlords or corrupt officials instead of paying local taxes and royalties.

“There were deeply problematic deals between the Bashir regime and, for example, Russian companies which had no background in mining,” says Kumar. “In one day alone, the Bashir government issued 50 licences, without any due diligence process,” she adds. Her team is advising the new government about how to make mining safer and contribute more to public finances.

Mohamed ‘Hemeti’ Hamdan Dagalo, number two in the transitional government, has substantial interests in the industry. His family company, Al Gunade, is in gold mining and trading, with stakes held by his brother Abdul Rahim Dagalo and two of Abdul Rahim’s sons. Hemeti is listed as a director, according to documents seen by the NGO Global Witness. Sudan today exports $16bn of gold to the UAE each year.

Hemeti rose to power as a brigadier general in command of some 5,000-6,000 fighters of the government-backed Janjaweed militia. They were rebranded as the Rapid Support Forces, and in 2017 took over the Jebel Marra gold mine in Darfur, along with another three mines.

READ MORE Sudan’s transition overlord Hemeti still wreaking havoc in Darfur

They used the revenue to buy new weaponry and a fleet of thousands of camouflaged pick-up trucks with artillery mounted on them. Hundreds of other gold mines across the country were controlled by shadowy companies with links to the security services under the Bashir regime. The ruling National Congress Party controlled mines and properties worth more than $1bn.

It was Hemeti’s decision to break with Bashir last year and back the revolution that proved a turning point. Civilian prime minister Abdalla Hamdok has to tread carefully with his reform efforts.

Bringing in higher gold revenues would help shore up his government’s rickety finances. Even the strongest supporters of the revolution fear that deteriorating economic conditions could mean the transition loses popular support, allowing the military to take over completely and shelve elections.

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“The gold business is changing, many of the bigger companies are changing their strategies,” says Richard Morgan, head of government relations at mining giant Anglo American. “We are doing much less in Africa and no gold at all. South Africa may still have massive gold reserves but for a big company it’s all about the business case,” he adds.