Mali, in Africa, is a major gold producer, consistently in the top three. Gold has a primordial place in the constitution of our plate. Despite this, it remains the cause of serious human rights violations and environmental degradation. Many fantasies linked to the French and Western presence have been conveyed, without tangible proof to date. However, the sharp rise in the price of gold in recent years has aggravated the gold rush and transformed the entire Malian territory into a lunar landscape without reaction from the authorities. Where is our gold going? For whose benefit?
Swissaid is a Swiss non-profit organization working to combat global poverty and injustice. Founded in 1948, Swissaid is committed to supporting the most disadvantaged populations by providing them with access to food, clean water, education, health and other essential needs. The organization works in many underdeveloped countries to promote local community empowerment and social justice. Swissaid has carried out a very in-depth study on African gold. “Entitled, “On the trail of African gold: quantifying production and trade in order to combat illicit flows”, the study follows the African yellow metal, from the placers and strongholds of the Emirates, Johannesburg and elsewhere.
The first major observation is that very little gold passes through Europe. The greatest traffic (especially illicit) passes through South Africa and the Arab countries of the Gulf.
The study raises many problems: huge quantities of gold are smuggled, controls at customs and at production sites are insufficient, some statistics are opaque and others have even been falsified.
Between 2012 and 2022, industrial gold production practically doubled in Mali (66.2 tonnes). “It is important to specify that industrial gold declared for production has not necessarily been produced in compliance with all legal standards,” states the study which specifies that in 2023, Swissaid has notably drawn up a list of serious problems, in particular human rights violations and environmental degradation, concerning the majority of the 125 industrial gold mines identified in Africa.
Gold production from artisanal and small-scale mining (ASM) is composed of declared and undeclared production. According to the Organization for Economic Co-operation and Development (OECD), ASM gold in Africa has experienced very significant growth over the last fifteen years.
“Reported ASM gold production has experienced different trends between countries, notably due to evolving political, economic and health contexts or changes in data collection methods. For example, it fluctuated sharply in Ghana, Ethiopia and Zimbabwe, while it increased in Tanzania and Niger, and remained stable in Mali.
The Malian state has estimated ASM’s annual gold production at 4 tonnes between 2011 and 2015 and at 6 tonnes between 2016 and 2022. “This method poses a problem, because not only the use of estimates as official figures “is not precise, but in addition, in the case of Mali, the official estimates are far from reality”, explains Swissaid which estimates our gold production at “more than 50 tonnes, without production in the north of the country”. of ASM.
“At the price of gold on May 1, 2024 (73,862 USD/kg at 2:15 p.m.), this range of weight estimates corresponds to an annual value of between 23.7 billion and 35 billion USD. It is worrying to note the extent of gold mining which takes place outside the legal framework. African states have virtually no control and receive no income from these flows. The absence of state control also implies an increased risk of forced labor, child labor, health harm or even death of workers, environmental pollution and financing of armed groups. At the same time, it is important to emphasize that the majority of artisanal miners simply seek to earn a living, have no other choice but to work informally and have no criminal intent.”
Who does it shine for?
In 2022, the largest reported gold producers in Africa were Ghana, Mali and South Africa. Between 2018 and 2022, declared gold production decreased sharply in South Africa, Ghana and Sudan, while it increased sharply in Burkina Faso, Ivory Coast and Mali.
Total reported gold production in Africa includes reported industrial gold production and ASM gold production. It increased from 2012 to 2018, where it reached around 700 tonnes, then fluctuated until 2022.
Comparison of data reveals that between 32% and 41% of total gold produced in Africa was not declared for production in 2022.
Adding the total declared gold production and the estimates of undeclared ASM gold production, we obtain a total gold production for the African continent between 991.4 and 1,144.6 tonnes in 2022 At the price of gold on May 1, 2024 (73,862 USD/kg at 2:15 p.m.), this represents a commercial value of between 73.2 billion and 84.5 billion USD. For comparison, consulting firm Metal Focus has estimated total gold production in Africa at 979 tonnes in 2022.
Once extracted, African gold takes various paths: it is either refined then consumed or stored in the country of production, or exported legally to an African or non-African country, or exported smuggled to an African or non-African country.
Gold consumed locally or stored in the country of production represents an extremely small proportion of the total gold mined each year in Africa. The jewelry sectors and banking sectors of African countries consume and use little local gold. Many African central banks have acquired local gold through official purchasing programs, but this gold is typically exported to non-African countries, where it is refined and then stored or sold. Comparison between production, exports and imports in partner countries indicates that the vast majority of African gold leaves the country where it was produced.
Gold exports reported from one African country to another African country have the main destination of South Africa. Otherwise, reported intra-African gold trade remains very low. Several African states have reported imports of gold from other African countries, but this gold is very rarely declared for export in the country of production and therefore cannot be considered legal gold.
Reported gold exports from African countries to non-African countries, on the other hand, have the UAE, Switzerland and India as their main destinations.
UAE, Switzerland and India, the golden paths
Finally, gold that leaves African producing countries clandestinely either goes to a non-African country, in which case it almost always takes the air route and generally lands in the UAE, or to another African country, to which In this case it generally takes the land route and transits through a neighboring country before reaching a non-African country, again the UAE in the majority of cases.
Total gold exports reported by African countries increased over the period 2012-2022. They went from 600 tonnes in 2012 to 814 tonnes in 2018, then fluctuated between
2019 and 2022.
“Analysis of data on gold exports from Africa disaggregated by country allows us to make several observations. Firstly, the quantities of gold exported from Ghana and South Africa were very high throughout the period 2012-2022,” specifies the study which adds that part of the 777 tonnes of gold declared to the export to African countries in 2022 was not declared for production or crossed a border clandestinely before being declared. Similarly, some gold exports result from misdeclaration or are tainted by under-declaration. These phenomena are analyzed in the section.
Reported gold exports from African countries to other African countries mainly relate to gold trade with South Africa. “Swissaid calculated that this type of exports had not exceeded 15 tonnes in total in 2022, including 2,955 kg exported from Burkina Faso to Mali”.
The vast majority of gold exports from African countries to South Africa consist of industrial gold transported to the Rand Refinery, based near Johannesburg. The only refinery in Africa to be certified by the LBMA, Rand Refinery transmitted to Swissaid the quantities of gold it has refined in recent years: 302 tonnes (with an average purity of 82%) during the fiscal year (September -August) 2017/2018, 298 tonnes (74%) in 2018/2019, 272 tonnes (80%) in 2019/2020, and 296 tonnes (75%) in 2020/2021.
It is impossible to compare statistics on gold exports from African countries to South Africa with statistics on gold imports into South Africa, because South African authorities report only a small portion of gold imports. gold of the country.
Of the 777 tonnes of gold declared for export by African countries in 2022, approximately 153 tonnes were exported to another African country while 614 tonnes were exported directly to a non-African country. Intra-African trade thus represents only 20% of gold declared for export in African countries.
To be continued !
Alexis Kalambry
