Tag Archives: gold trade

The Global Gold Rush and Plunder of Congo

Since March 2020, record amounts of gold dug from artisanal mines in the conflict zones of Eastern Congo have been smuggled across the porous border with Uganda, where it is being stamped with fake certifications before being shipped to international markets in Dubai, Mumbai and Antwerp, according to Ugandan security officials, smugglers and traders. Much of the gold is reaching these overseas markets using cargo planes returning from Uganda after delivering Covid-19 aid and other essential supplies, according to plane manifests seen by The Wall Street Journal.

The trade in conflict gold isn’t new, but it has perhaps never been more lucrative: Gold prices at illegal and unregulated Congolese mines, where supply chains have been disrupted by coronavirus shutdowns and renewed violence between militant groups, have dropped over 40% since April 2020, according to local traders, while on global markets, prices are up by almost a third…Activists and U.N. investigators have long accused Uganda and several of Congo’s neighbors of being complicit in the plunder of Congolese gold…The calls to end the illicit trade grew louder last year after Uganda’s gold exports overtook coffee to become the leading export commodity for the first time—despite the country producing very little bullion.

U.N. investigators estimate that each month between 2 tons and 3 tons of Congo’s conflict gold—with a market value of over $100 million—is crossing the Ugandan frontier, passing border crossings patrolled by heavily armed guards, with metal fencing and razor wire erected to reduce the flow of people due to coronavirus fears…

Smugglers and police say the gold is secreted in trucks that are allowed to bypass coronavirus restrictions to deliver “essential goods” from fuel to food supplies. The yellow bars, weighing between 5 to 20 kilograms, are stuffed underneath truck cabins, inside battery compartments and emptied gasoline tankers. Once inside Uganda, the truckers sell the bars to traders who purchase forged documents in Kampala that disguise the gold’s origin.

The scramble is fueling violence in the eastern Congolese province of Ituri…Fresh spasms of violence have left more than 1,300 civilians dead since March 2020, in what the U.N. says may amount to war crimes. Some six million people are displaced. Armed groups are carrying out predatory raids on mines in search of gold.

In the meantime on Wall Street, on July 24, 2020, gold futures were priced at $1,897.50 a troy ounce eclipsing their August 2011 peak of $1,891.90. The coronavirus has ignited a global gold rush, with physical traders around the world trying to get their hands on more metal and individuals around the world ordering bars and coins.

Excerpts from Nicholas Bariyo and Joe Parkinson, Under Cover of Coronavirus Lockdown, a Booming Trade in Conflict Gold, WSJ, July 9, 2020, Gold Climbs to a High, Topping Its 2011 Record, WSJ, July 24, 2020

Demand for Gold Causes Deforestation

The global gold rush, driven by increasing consumption in developing countries and uncertainty in financial markets, is an increasing threat for tropical ecosystems. Gold mining causes significant alteration to the environment, yet mining is often overlooked in deforestation analyses because it occupies relatively small areas. As a result, we lack a comprehensive assessment of the spatial extent of gold mining impacts on tropical forests.

The study Global demand for gold is another threat for tropical forests published in Environmental Research Letters provides a regional assessment of gold mining deforestation in the tropical moist forest biome of South America. Specifically, we analyzed the patterns of forest change in gold mining sites between 2001 and 2013, and evaluated the proximity of gold mining deforestation to protected areas (PAs)….Approximately 1680 km2 of tropical moist forest was lost in these mining sites between 2001 and 2013. Deforestation was significantly higher during the 2007–2013 period, and this was associated with the increase in global demand for gold after the international financial crisis….In addition, some of the more active zones of gold mining deforestation occurred inside or within 10 km of ~32 PAs. There is an urgent need to understand the ecological and social impacts of gold mining because it is an important cause of deforestation in the most remote forests in South America, and the impacts, particularly in aquatic systems, spread well beyond the actual mining sites.

Excerpt from Abstract, Global demand for gold is another threat for tropical forests

Natural Resource Curse – Central African Republic

Gold and diamond sales are being used to finance conflict in Central African Republic and United Nations peacekeepers should monitor mining sites to clamp down on illicit trade, a U.N. panel of experts * [pdf]said.In a report, the panel also said the peacekeeping mission (MINUSCA) should deploy troops to the remote north of the country and use drones to monitor the rebel-controlled region to put an end to simmering violence there.  The mission, which launched in September, is operating at only two-thirds of its planned 12,000-strong capacity.

Central African Republic was plunged into chaos when northern, mostly Muslim Seleka rebels seized control of the majority Christian country in March 2013, prompting a vicious backlash by the largely Christian ‘anti-balaka’ militia.  The panel said that some 3,000 people had been killed between December 2013 – when the U.N. Security Council imposed an arms embargo – and August 2014.  The Kimberley Process – a group of 81 countries, including all the major diamond producers, formed to prevent ‘blood diamonds’ from funding conflict – imposed an export ban on raw gems from Central African Republic in 2013.  But since then, an additional 140,000 carats of diamonds, valued at $24 million, had been smuggled out of the country, the panel estimated…..

In their northern enclave, the former Seleka fighters are imposing taxes on a wide range of goods from gold mining to coffee, livestock, and diamonds to fund their operations, the report found.  Former Seleka fighters were issuing mining licences to gold miners at the Ndassima mine near the rebels’ headquarters of Bambari, in the centre of the country, it said…

It suggested that interim President Catherine Panza’s decision to name representatives of the armed groups to cabinet roles may have fuelled conflict.”Competition among political representatives of armed groups for ministerial positions, as well as among military commanders for control of resources, accounts for of the recent infighting between former components of Seleka and rival factions of anti-balaka,” said the report, dated Oct. 29 but only made public this week.

Excerpts, Gold, diamonds fuelling conflict in Central African Republic, Reuters, Nov. 5, 2014

*Letter dated 28 October 2014 from the Panel of Experts on the  Central African Republic established pursuant to Security Council  resolution 2127 (2013) addressed to the President of the Security Council [S/2014/762]