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Fool’s Gold: The Case for Scrutinizing Sudan’s Conflict Gold Trade

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Fool’s Gold: The Case for Scrutinizing Sudan’s Conflict Gold Trade

Posted by Akshaya Kumar on March 4, 2015

Executive Summary

Gold coming from Sudan is conflict-affected, high-risk, and helping to destabilize Darfur, Blue Nile, and South Kordofan, the country’s main conflict zones. In those areas, civilians living around gold mining sites have suffered killings, mass rape, and the torching of their homes and fields at the hands of armed groups, including the Sudanese army and tribal militias fighting with government backing. In North Darfur and Blue Nile, mining areas have been both the sites and the objects of conflict. In South Kordofan, mining benefits the Sudan Peoples’ Liberation Movement-North (SPLM-N).

Because the gold mined in Darfur’s conflict-affected Jebel Amer region benefits Musa Hilal, a Janjaweed leader on both the U.N. and the U.S. sanctions lists, both the U.S. government and the U.N. Security Council should use their existing sanctions authority on Darfur to investigate the role of the gold trade in driving the violence in that region. Based on these investigations, both the United States and the United Nations should make additional sanctions designations against gold traders and companies facilitating the destabilizing trade in Darfur’s gold.

Beyond Darfur, mines in both Blue Nile and South Kordofan are also conflict-affected. Since the vast majority of Sudan’s gold is purchased, consolidated, and exported by the government, it is almost impossible to distinguish which gold comes from conflict-affected areas and which gold comes from other sources. In light of this ambiguity, the United States should urge international gold industry leaders to red-flag all gold shipments from Sudan as “conflict gold” under existing auditing programs and to demand that those buying Sudanese gold trace it to its mine of origin. Unless gold from Sudan can be verifiably traced to a conflict-free mine of origin, it should be flagged as high risk during audits and excluded from responsible buyers’ supply chains.

These combined due diligence efforts should help to reduce the market price for conflict-affected gold from Sudan. When combined with targeted sanctions on gold traders, these measures should make it harder for the government of Sudan, its Janjaweed proxies, and other armed groups to profit from war and use gold to fund their operations.

In the full report, we outline the scope of the problem and offer policy recommendations.