As demand for gold skyrockets, artisanal mining and smuggling ramps up, financing conflict and corrupt politicians, risking human lives and destroying the environment. In the first report of our 5-part series, we look at the current state and worth of gold, amidst the coronavirus pandemic.
Sudan: Hemeti and the $16bn annual gold exports to the UAE
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.
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.
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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.
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.