Gold has become a currency of war. As conflict in Sudan drags on and cross-border smuggling networks expand, the precious metal is increasingly being used to finance armed groups and move illicit wealth beyond the reach of formal financial systems.
For Egypt, this has transformed the campaign against illegal prospectors—known as the ‘dahhaba’—in the Eastern Desert and along the southern border from a routine security operation into a strategic effort to protect both national security and one of the country’s most valuable economic assets.
Cairo views this phenomenon as a multi-layered threat. Illegal mining deprives the state of royalties, licensing fees, and tax revenues, creating a parallel economy at a time when the government is seeking to turn mining into a driver of economic growth.
Egypt has been restructuring its mining sector since amending the Mineral Resources Law in 2019 and issuing its executive regulations the following year. The reforms replaced the production-sharing model with a system of royalties, rents, and taxes aligned with international standards. They attracted fresh investment, led to dozens of exploration agreements, and increased interest from international mining companies, while supporting expansion at the Sukari mine and new exploration projects designed to increase gold production in the coming years.
In May, the Mineral Resources and Mining Industries Authority signed a contract with Spain’s Xcalibur to conduct a comprehensive aerial geological survey of Egyptian territory. The survey will cover most of the country’s main geological zones, producing data to build a high‑resolution geophysical database of metallic and industrial mineral potential, including gold and rare elements.
In this context, tighter control over Egypt’s desert and border regions has become essential to protect exploration activity and curb illegal mining.
A parallel economy beyond oversight
At the centre of this activity lie the dahhaba—informal prospectors scattered across the Red Sea mountains, the Eastern Desert, and the areas of Halayeb, Shalateen, and Aswan. According to economist Mohamed Reda, these prospectors rely on metal detectors and rudimentary digging to extract ore from rugged terrain. They sell it to local middlemen, who transport it to primitive workshops for extraction, then smuggle the gold along desert routes that exploit the region’s harsh terrain and vast borders.
Through this process, Reda says, gold is transformed from a national resource into an unregulated commodity, depriving the state of tax revenues, royalties, and the added value that official refining and export would generate.
According to Egyptian MP Samira El Gazzar, there are an estimated 2,500 unlicensed mills in the mountainous areas of southern Egypt. They employ thousands of prospectors from Egypt, Sudan, and other African countries, many of whom cross into mining areas through the region’s rugged border terrain. Together, these informal operations produce hundreds of kilograms of gold each year.
These networks, El Gazzar explains, operate through complex structures that rely on unlicensed four-wheel-drive vehicles, modern metal detectors, and chemicals such as mercury and cyanide. These practices cause serious environmental and health damage, while the desert landscape makes it difficult to pursue those responsible.
How gold enters the economy of war
Experts warn that the danger extends beyond illegal mining. Gold has become a financial lifeline for armed conflict. Reda notes that the border triangle between Egypt and Sudan has become part of a regional network for the movement of illicit gold. Gold from conflict zones in Sudan and Central Africa passes through this corridor to conceal its origin before being re-exported to global markets.
International estimates indicate that the value of gold linked to conflict zones in East and Central Africa ranges between $3bn and $4bn dollars annually. These flows provide armed groups and militias with a steady source of funding to purchase weapons and sustain their operations.
