How a sanctioned Russian company gained access to Sudanese gold

Dozens of dented trucks loaded with gold ore wind through the desert in northeast Sudan and dump their load at a compound on the outskirts of the town of Atbara.

The tonnes of ore, mined by small miners in Nile State, are then transported to a processing plant using excavators and conveyor belts. Only a handful of insiders are aware of how much gold the closely watched operation produces, who it is sold to or where it ends up as no public records are available.

Commercial registry documents viewed by Bloomberg provide the first evidence that the complex is owned by Meroe Gold, a company the US Treasury says has ties to the Wagner Group, which it describes as a mercenary company linked to the Russian ministry. of the defense. In addition to access to lucrative mineral deposits, Meroe has licenses to operate in Sudanese industries ranging from transport and agriculture to plastics, according to the documents.

The permits obtained by Meroe illustrate the links that the US Treasury describes as “an interaction between Russia’s paramilitary operations, support for the preservation of authoritarian regimes and the exploitation of natural resources”. Meroe, one of dozens of gold mining operators, has been investing in Sudan since 2017 – the same year, according to the Treasury, Wagner hatched plans for then-dictator Omar al-Bashir to suppress pro-democracy protests.

“When Bashir visited Russia in October 2017, he opened the door wide to Sudan’s resources,” said Suliman Baldo, a US-based independent researcher who previously worked for The Sentry, a Washington-based group. which investigates the links between conflict and money in Sudan. Africa. He spent five years investigating Sudan’s mining industry and found a surprising lack of official oversight.

The European Union sanctioned Wagner in December for allegedly deploying private military agents to conflict zones to fuel violence, loot natural resources and intimidate civilians in violation of international law. The Treasury in 2020 accused the company of “dangerous and destabilizing operations” in foreign countries such as Ukraine, Syria and Mozambique.

In Africa, unstable regimes sought Wagner’s help to support their governments. Last year, the UK and 14 other governments said they witnessed the deployment of Wagner mercenaries to gold-rich Mali to support its military rulers – an allegation the junta later denied. Its contract soldiers have also backed the government of the Central African Republic, one of Africa’s biggest diamond producers, and military commander Khalifa Haftar in an internal power struggle in OPEC member Libya.

Wagner’s relationship with the Bashir administration helped Meroe secure a mining license and access to cheap semi-processed gold ore mined by small-scale operators, according to dozens of miners, executives, engineers, consultants and analysts in Sudan interviewed by Bloomberg.

Small-scale miners operating in the locality of Al-Ibedia close to the Meroe factory said that they sell their residues or artisanal gold to intermediaries who are sent through Meroe to local markets and millers. Samples from their digs are taken for evaluation before a price is negotiated, they said.

Sudan’s foreign ministry said in a March 23 statement that Wagner was not present in the country’s gold mining industry and was not training its army. The ministry did not specifically deny Meroe’s presence in the country. US and UK officials, who asked not to be identified because they are not authorized to speak to the media, said in April that Meroe had intensified work at the project site since the invasion of Ukraine by the Russia.

Wagner, Sudan’s state-owned Mineral Resources Co., the central bank and the finance and mining ministries did not respond to repeated emails seeking comment. Bloomberg was unable to obtain Meroe’s contact details.

Read: Russia welcomes Sudanese leader wanted for genocide by World Court

“You fall into the category of provocative and hostile media,” said Concord Group, a St. Petersburg-based company that the US Treasury says is controlled by the same person who owns Wagner, in response to an email from Bloomberg seeking comment on Meroe’s operations. in Sudan. “Therefore, we do not consider it appropriate to respond to your request.”

The Russian Foreign Ministry said Wagner is a private company that operates independently of the government.

Wagner’s secretive and expanding business dealings in Africa show the limits of attempts by Western nations to censor him and other Russian businesses after President Vladimir Putin’s decision to invade Ukraine. The company’s presence in Sudan is also upping the ante in a proxy battle between Russia, which is seeking to forge close ties with its military regime, and the United States and European Union, which are pushing for a return. to civilian rule since a coup in October.

One of the world’s least developed countries, Sudan is a hotbed of illicit financial activity – Transparency International ranks it among the 20 most corrupt countries in the world. Finance Minister Gibril Ibrahim estimated last year that only a fifth of the country’s gold production passed through official channels, with the rest smuggled out of the country. Official bullion production was around 100 metric tons in 2019 and 21.7 tons were exported, according to central bank data, leaving more than $4 billion in gold unaccounted for.

Over the past five years, Meroe has imported goods worth nearly $11 million, including gold processing equipment and a Russian-made twin-turbine helicopter, according to data provided by Sayari Labs. , a Washington, DC-based financial intelligence firm that seeks to prevent financial crime and promote greater transparency and accountability.

The United States says Wagner is controlled by Yevgeny Prigozhin, a restaurateur and tycoon from Putin’s hometown of St. Petersburg who has been dubbed the president’s “chef” because he provides catering services to the Kremlin. Putin presented Prigozhin with an award for his services to the state in 2014 and praised his international work. In addition to providing mercenaries and political operatives, Prigozhin companies also offer weapons training and election campaign services, according to the US government.

Prigozhin and his Concord group of companies were indicted by the United States in 2018 for interfering in the 2016 US presidential election, with authorities alleging he controlled a troll farm known as the Internet Research Agency that sought to support Donald Trump’s campaign. Concord’s attorneys denied the allegations before the US government dropped the case in March 2020, citing Concord’s attempts to use the court system to gather information about how the US detects and prevents the foreign election interference.

In mid-2020, the U.S. Treasury accused Prigozhin of undermining democracy in Sudan and exploiting its minerals, and extended an asset freeze to Meroe and M-Invest, which it says “serve as a front” for Wagner forces operating in Sudan. U.S. citizens and entities were also prohibited from entering into transactions with them.

Concord said in a response to emailed questions April 5 that Prigozhin had “nothing to do” with private military companies. The company also said on April 11 that Prigozhin was in no way related to Meroe Gold and M-Invest.

Civil rights groups have warned that the lack of public records and lack of transparency in some jurisdictions could render the sanctions imposed on Wagner ineffective.

“Companies that continue to operate after being sanctioned will often begin to use intermediaries or proxies to avoid appearing by name on shipments or transactions,” said Phil Kittock, program director for Sayari Labs.

While the lack of proper monitoring of Sudan’s mineral resources benefits the companies extracting them and their local partners, the country’s people are ultimately harmed, said Abdul Moniem Sidig, a senior member of the Sudanese Mineral Exporters Association. gold.

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