In Sudan, he who has the gold makes the rules

Sudan’s most well-known precious metal is at the heart of this month’s deadly fighting between two military factions as third parties lie in wait

Military struggle for Power and Gold
Image credit: Julius Maxim
Military struggle for Power and Gold

In Sudan, he who has the gold makes the rules

Few countries in Africa are as rich in natural resources as Sudan. Its gifts include oil, gas, iron ore, silver, copper, manganese, gypsum, tungsten, mica, chromium ore, zinc, lead, kaolin, cobalt, nickel, tin, aluminum... and gold.

As fighting rages across the country, including in the capital Khartoum, analysts have been quick to identify gold as a central factor in the internal military battle between two factions of the Sudanese military.

The country’s current military government - made up of the army led by General Abdel Fattah al-Burhan – is at odds with the RSF, a paramilitary group set up ten years ago and led by Mohamed Hamdan ‘Hemedti’ Dagalo. The pair have their eyes on Sudan’s gold... and they are far from alone.

Read more: Explainer: Why are military forces fighting each other in Sudan?

Sudan is one of the world’s top 20 gold-producing countries and while it ranks far below countries like China, Australia, and Russia in terms of the number of metric tons produced, it is widely considered to have vast untapped reserves.

Rich in troublesome gifts

Its rich and high-quality gold mines are at the centre of this latest internal war. Theft, looting, and smuggling of gold is rife, affecting most of Sudan’s gold production. They should have been a blessing, but the mines have become a curse.

The Ariab gold mine is in the Sudanese desert, 800 kilometrers northeast of Khartoum

At its heart, the military conflict in Sudan is a battle for the control of gold production and gold smuggling, yet Burhan and Hemedti are just two of the actors. While these are early days, it could yet turn into a civil war involving foreign proxies.

Other countries would like to exploit Sudan, yet this will be tough. Sudan’s mines are surrounded by relentless and continuous conflict, much of it related to smuggling, which affects the ability of millions of Sudanese to eat and earn.

About 14 million Sudanese (just less than a third of the total population) live below the poverty line. The United States Agency for International Development (USAID) gave $800 million in aid in 2021 but nothing last year, citing the military coup. The lack of aid money has contributed to the worsening of the country’s economic situation.

Last year, the Sudanese Mineral Resources Company said 2022 had been its most productive year yet, but as the mining sector flourished, so too did smuggling, which affects around 80% of the country’s gold, according to Reuters, citing authorities.

Sudan is one of the poorest countries in the world but has gold reserves estimated at 1,550 tons. The potential is huge. The precious metal already accounts for around 45% of Sudan’s total exports by value, according to the Sudanese Ministry of Minerals.

A nation’s plundered wealth

Dr. Hassan Elsadi, Professor of Finance Economics at Cairo University, says the separation of South Sudan in 2011 and the fight over Sudan’s gold may help to explain the country’s deteriorating economy and worsening living conditions.

“Sudan used to produce between 180 and 190 tons per year before the separation, but now it produces around 95 to 100 tons per year, while South Sudan - a small country – produces the same amount of gold,” says Elsadi.

“Only revenues from 30 tons of produced gold last year entered the state’s general budget, about $1.2 billion. About 65 tons were smuggled. Conflict helps make the country a fertile ground for smuggling and weaken the state’s grip on ports and markets.

Sudan produced up to 190 tons of gold before South Sudan separated. Now it produces 95 tons, 65 of which are smuggled out.

"With limited current capabilities, the value of Sudan's gold production can reach up to about $5 billion a year, so $3.8 billion is being looted for the benefit of the warring parties in the country," Elsadi says.

Pure Sudanese gold nuggets, one of the best in the world.

This deprives the central bank of a foreign currency source, with the gold theft affecting the entire production chain, from mines to individuals and companies to investors both local and international. At the other end is the customer, with the United Arab Emirates the largest importer of Sudanese gold.

Eyeing an attractive prize

What distinguishes Sudan's resources, he says, is that the concentrations of gold in the mines are among the highest in the world, with each ton of extracted ore containing an average of 100g of gold.

Furthermore, geographically the gold mines are spread across many areas of Sudan, including the deserts and mountains east of the Nile River, along the Red Sea, across the Red Sea Mountains in east Sudan, through the Nuba Mountains and into the poverty-stricken region of Darfur, which has witnessed war and famine.

In terms of gold production in Africa, Sudan ranks behind Ghana (140 tons per year) and South Africa (90 tons). It would have been top had South Sudan not seceded. Elsadi warns that there may be another secession due to the current conflict.

Since the overthrow of Omar Al-Bashir's regime in 2019, the Sudanese government has sought to develop the mining sector, specifically gold, but political disputes have made this difficult, and mining production is owned and controlled by private interests.

Hemedti's parallel economy

In a recent profile, British newspaper The Guardian revealed details of Hemedti's control over the country's gold mines, which he began seizing from tribal leaders in Darfur after forming the RSF in 2013.

Read more: Hemedti: From camel trader to second most powerful man in Sudan

Among the biggest is the Jebel Amer gold mine, seized in 2017, with at least three others elsewhere in the country, such as in South Kordofan. They have made him one of Sudan's richest men, but the RSF controlling so much of the country's natural riches has implications for any would-be transition to democratic, civilian-led government.

After Bashir was kicked out in the 2019, Hemedti took a role on the Transitional Military Council and the Sovereignty Council, which was responsible for overseeing Sudan's transition to democracy ahead of the 2022 elections. Yet any transition is complicated by the parallel economy being run by Hemedti's forces.

Citing gold industry traders, The Guardian claims that Hemedti heads the board of directors of a private company called Al-Junaid, a mining and trading company led by his brother, Abdul Rahim Dagalo, according to documents from Global Witness, a non-governmental organisation that fights corruption.

Fighting for a piece of the pie

Tarek Fahmy, Professor of International Relations at the American University in Cairo, believes that the current conflict in Sudan is a power struggle, not just an economic one.

"Sudan is one of the richest African countries, but the continuation of military rule has had a negative impact," he says. "There are major interests for regional and international powers in economic areas, whether in ports or gold mines."

This conflict is a power struggle. It is about disagreements over the transitional government and the agreement regulating the transfer of power.

He warns that the issue "must be understood in context", adding: "It's not a conflict over access to power, or determining it, but rather problems related to the management of the transitional government and disagreements over the framework agreement" that regulates the return of power to civilians.

This agreement "will either be amended, cancelled, or reserved", he says, saying the absence of political will means that the conflict may be long and drawn-out.

Involvement of third parties

Fahmy believes that the conflict will involve third parties and expects major interventions to settle the matter, after both sides exhaust themselves. Africa has a history of military coups, he says. "Therefore, the African Union is concerned about the repercussions of what is happening in Sudan for countries of the south."

He describes international powers' "wait-and-see attitude" towards Sudan, given that the country "is part of the West-Russia conflict and the ambitions of major powers".

For Fahmy, Russia may yet enter the conflict to support Hemedti, perhaps through Wagner mercenaries. Moscow is accused of looting Sudan's precious metals, of wanting a major naval base in the country to give them access to the Indian Ocean, and of using Sudan as a sanctuary against Western sanctions.

Read more: Where is the conflict in Sudan heading?

Given the myriad scenarios and options - and given the resource richness of Sudan – most analysts now think that this most recent conflict is still at an early stage. There is more fighting to do in part because everyone wants to claim the very golden prize.

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