Wagner-linked gold miner in Sudan halts operations over conflict

19th September 2023 By: Bloomberg

A Sudanese gold mining company linked to the Russian mercenary Wagner Group has suspended operations because of conflict in the North African nation.

Al-Sawlaj Gold Mining Co. has been shuttered since mid-April and its Russian staff have been evacuated, Huweyda Mursal, a legal adviser to the company, said by phone. The company owns a gold-tailing processing facility near Atbara, a city 280 km north of the capital, Khartoum.

“Our factory near Atbara in the River Nile state has been shut down because of the war and there are no exports of gold since then,” she said. “There are some efforts to resume our work, especially if the war slows down.”

Clashes erupted in Sudan five months ago when long-running tensions between the army and a paramilitary group, the Rapid Support Forces, exploded into a full-blown battle for control of the country. The conflict has left thousands of people dead and forced millions more to flee their homes, according to the United Nations.

Al-Sawlaj in 2021 bought a gold tailing-processing facility owned by Meroe Gold for $1.8 million. Sudan-registered Meroe was sanctioned the previous year by the US Treasury for its alleged ties to Wagner.

The European Council in February said that Al-Sawlaj was “associated with” Meroe, which it described as a “cover entity for the Wagner Group’s operations in Sudan.” It didn’t explicitly sanction Al-Sawlaj, and the company denies any connection to the Russian group.

Gold has been an important revenue source for Sudan’s government, via companies including Australia’s Perseus Mining Ltd. and Dubai-based Alliance for Mining Co. But the vast majority of its production is smuggled out of the country, usually to foreign processing centers, according to Sudan’s Finance Ministry.

Both Sudan’s army and the RSF have major stakes in Sudan’s gold industry and are accused by activists and human-rights groups of smuggling large amounts of illicit metal out of the country.

The country produced about 2 tons of gold since conflict erupted on April 15, according to the Sudanese Mineral Resources Co. Last year, Sudan officially exported 34.5 tons of gold worth more than $2-billion.