Sudan relies on gold to turn its economy around

The tragic death on December 26 of 31 miners, buried in the collapse of the mine where they worked, is a reminder of the importance of gold production in Sudan, the third largest producer in Africa after South Africa and Ghana.

Since the partition of Sudan in two in July 2011, Khartoum has lost the rich oil fields to South Sudan. The country was then considerably impoverished and this is still felt ten years later. However, there is still gold, an ore whose world price is constantly reassessing. The country extracted 76 tonnes in 2019, up from less than half five years earlier.

A rebound due to the policy of the former head of state Omar al-Bashir who built a gold refinery in Khartoum. The plant is one of the largest on the continent by virtue of its size. At the same time, gold exports have been banned so that the country retains the added value of refining. The operation went rather well and production increased. In 2016, Sudan declared to have reached 93.4 tons of gold, or 4% of the GDP against 1% in 2009, on the eve of the separation of South Sudan.

On the other hand, the idea of ​​industrializing the sector by banning artisanal mining has been abandoned. Artisanal miners are indeed the backbone of gold mining in Sudan, as in many African countries. They provide between 85 and 90% of production and provide a living for thousands of Sudanese, AFP puts forward the figure of two million people. The sector was encouraged by the authorities who could not, for lack of capital, invest in industrial structures. Deemed to be a “rogue state”, pro-terrorist, the country had been under an American embargo since 1997.

The term artisan should not be mistaken. It evokes more the structure of production in small groups than the mining itself which has recourse to mechanization. These miners not only produce, but they also play the role of prospectors by discovering new veins to the delight of mining companies. The country is vast and still very little explored.

According to Raphaëlle Chevrillon-Guibert, author of a study on “the gold boom in Sudan”, “The regime therefore wishes to eradicate artisanal mining in the long term, but it acts in accordance with its immediate interest by tolerating it in order to reach production quotas sufficient to rebalance its monetary balance and to preserve jobs”.

Thus, the central power gives soft eyes to foreign investors, while in its basement thousands of little hands scratch the earth at the risk of their lives, as we can see in the tragic news item of December 26. “Today, more than 130 companies including 15 foreign have licenses”, explains Raphaëlle Chevrillon-Guibert.

Another concession made to the industrial sector, gold exports are no longer prohibited. Since January 1, 2020, the Sudanese Central Bank no longer has a monopoly on the purchase of gold. Companies can sell up to 70% of their production abroad, provided that the income from these sales is placed in Sudanese banks.

Two major companies are already working in the country: the Canadian Orca Gold on a site near the border with Egypt. For its part, the Moroccan Managem launched in 2019 an industrial unit for the production of gold which is to release two tonnes annually. “The country has a lot to offer”, notes the Ecofin agency. Reserves are estimated at over 500 tonnes of gold and the government has already defined 160 new exploration blocks. Half of them would contain gold …