Conflict gold in Africa - from Mali to Darfur

Published by MAC on 2013-02-11
Source: Mail & Guardian, Bloomberg, Al Jazeera

No 'moral' or 'business case' for use of conflict gold

Chantelle Benjamin

Mail & Guardian

4 February 2013

The 2013 African Mining Indaba has been told that investors are becoming increasingly interested in human rights matters around the precious metal.

Rand Refinery chief executive Howard Craig was speaking at the first day of the mining indaba on Monday where he was part of a panel of gold industry leaders introducing the conflict-free gold standard, which is to be rolled out by the end of the year.

According to Craig, it's estimated that about 20 to 40 tonnes are mined by illegal miners annually. "To explain it, it would be about half of South Africa's gold production," he said.

The conflict-free gold standard, developed by the World Gold Council, is supported by leading companies in the gold industry and was intended to prevent gold from being used to fund armed conflict.

Nick Holland, chief executive of Goldfields, which is a member company, said the gold sector needed to ensure that the gold sold was not used to fund conflict or contribute to human rights abuses.

"It does not just make moral sense, there is also a business case," said Holland. "We found investors are increasingly interested in non-operational matters, like health, safety, human rights and how we interact with communities. In fact some investors would only ask about these, rather than the operational and financial performance of the company."

Reputable dealers

The major mining companies, which make up about 60% of the gold mining sector have agreed to cooperate with the standard, and it is hoped the remainder will come on board as well.

Howard, the largest gold refiner in South Africa, said on Monday that gold mining companies could play a role to ensure that the work done by the mines did not undermine the security of a country.

"It's important that African gold is not stigmatised and confused with conflict gold. We need to have procedures in place to ensure that African gold can be proudly marketed."

He said as a refiner they only deal with reputable dealers or with banks, when it came to legal artisanal miners. In the case of scrap metal, Rand Refinery only deals with companies they know and whose products they can source.

Robert Duffy, executive vice-president for Continental Africa, Anglo Gold Ashanti, Paul Mabolia, national coordinator for the ProMines Project, Democratic Republic of the Congo, said the artisanal mining sector was the most vulnerable to armed groups and gold was increasingly popular because it was easy to transport and difficult to track.

An artisanal miner or small-scale miner is, in effect, a subsistence miner, who works independently, mining or panning for gold. In some cases these miners are legally employed, but it's the illegal miners and the conditions under which they operate, including using child labour and poor safety regulations, that concerns organised labour. Not to mention that some of the money from this sector is used to fund rebel movements.

Cooperation

Asked if there was not a need for greater cooperation between governments and the mining companies, Duffy said they believed this was essential but that it tended to be very complex to set up.

He said they had an effective relationship with the government in Tanzania where there were about 200 active pits in the area they mined. Duffy said the company was leading multiple stakeholder discussions about how best to assist this group that in many cases were surviving on the money made from these mines.

"The state and mining companies need to work together to remove the illegal miners and provide them with alternatives, because they will simply pop up somewhere else or return to the property," said Holland.

He pointed out that technical training could be provided for illegal miners and they could be brought legally into the system. "Let's train them how to mine and make them subject to standards. They need to pay tax."

He said by making them legal it made it easier to monitor where the gold came from and where it was going.

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Mali's gold production unaffected by war - mines minister

Franz Wild

Bloomberg

6 February 2013

The war in Mali spared its gold mines operated by companies including Randgold Resources Ltd., because 98 percent of the operations are in the south and away from any fighting, Mines Minister Amadou Baba Sy said.

Gold production grew to 50 metric tons last year from 46 tons the year before, Sy said in an interview in Cape Town today. A plan to support smaller companies to start producing will push output to 100 tons within two or three years, he said.

"The crisis hasn't affected mining at all," Sy said. "The insecurity which we're experiencing is mainly in the north of the country."

French and West African troops have been battling northern Islamist insurgents for almost a month. The rebels occupied two- thirds of Mali, which vies with Tanzania as Africa's third- biggest gold producer, after soldiers ousted the government in March.

At least 13 international companies were engaged in gold exploration and production in the West African country in 2010, according to a U.S. Geological Survey Report.

Randgold's Morila mine, co-owned with AngloGold Ashanti Ltd., Africa's biggest gold producer, and the government, produced more than a third of Mali's output in 2010, according to the USGS.

Mali's government is in "very advanced" talks to finalize a bauxite mining agreement with London-listed Eurasian Natural Resources Corp., Sy said. The government is promoting bauxite, uranium and iron ore development as it seeks to diversify its mining industry, he said.

ENRC should pay for a railway line into neighboring Guinea, which will allow it to ship bauxite, an aluminum ingredient, and iron ore, Sy said.

"I myself have asked that the mining agreement be linked to the development of railway infrastructure," Sy said. "What's holding us back a bit, what we really need is railway infrastructure, because we can't export iron and bauxite very well without a developed railway network. That's our priority at the moment."

--Editors: Stephen Cunningham, John Viljoen.

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Darfur tribal violence flares over gold mines

Harriet Martin

Al Jazeera

4 February 2013

Renewed fighting in Sudan's remote western region has caused up to 100,000 people to flee villages burned to the ground.

Khartoum, Sudan - UN aid agencies are once again launching an emergency operation to help tens of thousands of displaced people in Sudan's Darfur region, after an outbreak of fighting over gold mines.

Last weekend, 100 tonnes of food and emergency aid was sent from El Fasher, the capital of North Darfur, to people fleeing fighting in a remote desert area in the province's northwest. As many as 100,000 people have already left their homes.

The conflict began when two Arab tribes, the Beni Hussein and the Northern Rezigat, fought over rights to gold mines and levies on miners in the area.

Gold mining has become an increasingly attractive option here. In recent years, rebel groups have lost their political backers in neighbouring Chad and Libya, spurring them to find new sources of income. Meanwhile, the Sudanese government no longer has vast amounts of oil revenue to rely on, since oil-rich South Sudan seceded in 2011. Local tribes who once relied on government support now find payments drying up.

Despite a government-brokered truce between the two tribes nearly three weeks ago, there are reports of continued attacks, Amnesty International said.

"We haven't seen sudden displacement on this scale for a few years. More people were displaced in a matter of days than were displaced during the twelve months of 2012," said Damian Rance, spokesman for the United Nations Office for the Coordination of Humanitarian Affairs (OCHA) in Khartoum.

A decade ago, more than two million people were displaced and tens of thousands died in a complex conflict between armed rebel groups and government-backed militia in Darfur. Today, about one million people remain in camps in this vast region roughly the size of Spain.

Villages burned

So far, more than 100 villages have been burned, causing people to run from their homes with their livestock, according to UN reports. The government estimates at least 100 people have been killed in the fighting so far.

Thousands of migrant gold miners who had flocked to the area, many from neighbouring Chad, were caught up in the fighting and have since fled Darfur.

Gold mining in the area only started in March 2012. Since then the Beni Hussein, who mostly rely on cattle herding, have controlled the awarding of artisanal mining licences, according to a report released by Amnesty International.

The Beni Hussein community say government border guards from the Northern Rezigat tribe were behind several attacks seeking to lay claim to the gold-mining area, according to the Amnesty report.

Colonel Khalid Swarmi, the Sudanese Armed Forces spokesman, denied allegations of government involvement. "There were clashes between the Beni Hussein and the Rezigat, but we were not involved," he told Al Jazeera.

Most have fled to the remote desert town of El Sireaf, which is already hosting 2,500 people displaced from the previous conflict. This sudden inundation of 60,000 more people has caused the local authorities to close all their schools as they desperately tried to find somewhere to house the displaced. Many remain outdoors in what the UN describes as "appalling conditions".

"Thousands are sleeping in the open in the cold winter desert nights, and so we are bringing in shelter materials - tents and plastic sheeting and blankets," explained Cesar Arroyo, head of the UN's World Food Programme (WFP) in Darfur.

El Sireaf is so remote that the UN had to use helicopters in the first three days of the crisis to bring in emergency shelter supplies, Arroyo added.

Aid convoys

But much-needed food items such as sorghum, oil, wheat beans, and salt lentils are coming in by truck. So far, the UN, along with Sudanese aid agencies, including the Sudanese Red Crescent, have delivered 600 tonnes of aid.

The journey is only around 350 kilometres but takes five days because of the poor road quality and the threat of armed groups and bandits. Even though the humanitarian convoy has an armed UN or police escort, it nevertheless has to take a circuitous route.

"For this operation we are using WFP's own trucks. They are equipped with tracking devices, which means we can monitor their location at any point - which is important in a volatile and fluid situation," Arroyo said.

Sheep, goats and cattle mingle among the thousands of people sleeping outdoors in the chilly desert night. The latest aid convoys are carrying vaccinations for these animals because of the risk of disease they pose.

"When you have huge concentrations of animals in one place, and disease starts spreading, you can lose the whole herd quickly - especially where there is not enough pasture or water, and the animals are already weak," explained Rance.

Sudanese aid agencies have reported to the UN that animals are dying because of lack of pasture and water, and have launched a "clean-up" campaign to remove the animal carcasses.

The UN has already spent more than $2m dollars on this operation, and is asking donors for $1bn for emergency aid in Sudan for the coming year.