Organised crime syndicates rip off Africa of gold wealth by the tonne
Wednesday July 21 2021
Incomplete data, poor record-keeping, and illegal channels define artisanal and small-scale gold mining in East and Southern Africa, robbing the sector of an opportunity to grow, warns a report by the Global Initiative, which monitors transnational organised crime.
The report, Illicit Gold Markets in East and Southern Africa, says that the increase in illicit activities in gold-rich markets has undermined the potential for this precious commodity to be a catalyst for development in these regional African markets.
According to the report, about 3.5 million people depend on artisanal and small-scale gold mining (ASGM) in Uganda, Kenya, South Sudan, and Zimbabwe.
Criminals will use corruption and violence, as well as financial levers to profit from and control the trade. As a result, informal mining operators struggle to comply with regulatory demands and are increasingly reliant on criminal actors who seek to maximise profits from illicit gold markets.
In the four countries that were studied for this report, ASGM not only provides a critical means of survival, it also stimulates local economies in the areas around the mining activity.
South Sudan has substantial gold deposits. Most gold mining takes place in Central Equatoria State, Western Equatoria State, along the border with DR Congo; Jonglei State, in and near Boma National Park; Western Bahr-el-Ghazal State and Upper Nile State.
More than 60,000 people were active in artisanal mining across the country. As of 2019, the Ministry of Mining granted 61 mining exploration licences valid until 2022, and 12 small-scale licences valid until 2028, in Gorom area near Juba.
However, it is difficult to estimate the amount of gold produced. Neither the Ministry of Mining nor the Ministry of Trade has data on the country’s gold production or trade.
Buyers report that gold from Lujule and Morobo is consolidated in Yei before being moved south through the Kaya border post to Uganda and often to Arua and Koboko.
Goldmining in Uganda is predominantly informal. An estimated 190,000 Ugandans employed by the ASM sector in Uganda produce about 90 per cent of all minerals, including gold.
Domestic ASGM activity is mainly in the centre and north-east of the country. In the Karamoja region, the towns of Moroto, Amudat and Nakapiripirit are local hubs for mining activity.
In 2019, Uganda exported $1.25 billion worth of gold, compared with $514.8 million in 2018. Political actors in Uganda exploit the sector by securing land access and mining rights, often through corruption or by force.
In Kenya, the bulk of ASGM activity takes place in Kisumu and Migori counties. Gold deposits and mining can also be found on the western and northern borders in frontier counties. Estimates of people directly engaged in artisanal mining range from 100,000 to 250,000.
In Migori in south-western Kenya, and parts of West Pokot and Turkana in western Kenya, this is the main income-generating activity. Mining regions on the borders with South Sudan, Ethiopi and Uganda are in some of the most dangerous parts nd are considered to be a haven for organised crime.
In West Pokot County and Turkana, former cross-border cattle rustlers, and bandits have shifted to gold mining following government clampdowns on transborder criminal activities and a decrease in livestock populations.
Kenya also has a shortage of officially licensed traders. As a result, many miners sell gold through informal or illegal channels to bypass middlemen to secure a higher price for gold. However, entrenched trade networks make this difficult and the extra profit is not always worth the effort.
In Zimbabwe, ASGM takes place in every Zimbabwean province, with most gold production thought to take place in the Midlands districts of Kwekwe and Shurugwi and the Mashonaland West district of Kadoma. More than a million people are directly dependent on ASGM, with more than three million indirect beneficiaries.
While Zimbabwe is a major gold producer, official estimates are likely to be well below actual production because of the size of the informal industry and dominance of the illicit market.