The Russian paramilitary group Wagner has earned more than $2.5 billion through illicit gold mining, particularly in African countries, since the start of the war in Ukraine, underlines a report published on November 18 by the Council World Gold Index (WGC).
Entitled “Silence is golden: a report on artisanal miners exploited to finance war, terrorism and organized crime”, the report specifies that this sum comes mainly from the profits made from the mines and refineries under control of Wagner in countries torn by conflicts such as the Central African Republic, Mali, Libya and Syria, as well as the fees paid by the regimes to this private military company, today incorporated into the Russian army, in return for security service.
The precious metal looted by Wagner can be brought back to Russia directly via the Russian military base in Latakia, Syria, or indirectly via international gold trading centers such as Hong Kong, India, Switzerland, Turkey and the United Arab Emirates. The revenues from this illicit international trade are mainly used to finance the Russian war machine.
Far from reducing its activities since the death of its founder, Yevgeny Prigozhin, and its passage under the supervision of the Russian armed forces, Wagner is extending its control over Mali’s gold resources, notably by taking control of an artisanal mine in Intahaka in February 2024.
The report prepared by former British Deputy Prime Minister Dominic Raab also indicates that the colossal profits made by Wagner’s mercenaries thanks to the illicit gold trade constitute a striking example of the exploitation of artisanal mining activity in the gold sector by ill-intentioned actors to finance conflicts, facilitate money laundering and the enrichment of criminal enterprises. But the entire artisanal and small-scale gold mining (ASGM) industry is not toxic and millions of households, often in the poorest and most marginalized communities, depend on it.
Governments deprived of a valuable source of tax revenue
This sector, particularly concentrated in Africa, Asia and Latin America, represents approximately 20% of the world’s annual gold supply and 80% of the total gold mining workforce in the world. ASGM production has grown dramatically, from 304 tonnes in 2002 to 669 tonnes in 2018.
By 2022, the sector was estimated to provide direct livelihoods to some 15 to 20 million people, and indirectly support an additional 270 million people.
According to some estimates, 80% of activity occurs in the parallel economy. This situation is a source of numerous risks and challenges. Local gold miners are often targets of criminal gangs, armed groups, terrorist organizations and corrupt officials. Extortion from ASGM entities is an integral part of the strategic expansion of Islamic State and Al-Qaeda affiliates operating in the Sahel. In Colombia, the Clan del Golfo and former paramilitary groups, the National Liberation Army (ELN) and dissidents of the Revolutionary Armed Forces of Colombia (FARC), finance their activities through illegal gold mining.
ASGM communities are also often exploited by unscrupulous middlemen who specialize in the clandestine export of gold, thereby depriving national governments of a valuable source of tax revenue. In Sudan, for example, the dispossession of artisanal gold mining communities deprived the government of an amount estimated at $2 billion in a single year.
Other risks threaten the artisanal and small-scale gold mining sector. Mercury is used as a cheap way by artisanal miners to separate gold from ore. However, exposure to mercury can damage the kidneys, reduce hearing, impair vision and cause neurological damage.
When artisanal miners cannot find mercury, there are numerous cases of cyanide use which harms respiratory and cardiovascular health. Exposure to lead and cadmium is also a common risk for those working in ASGM. The lack of other basic safety standards within ASGM also results in high mortality rates, including from landslides and collapses, in addition to disproportionate cases of hearing loss, impaired language, respiratory diseases and other conditions.
A concerted approach between national and international actors
The weaker the rule of law, the greater the risks that ASGM will give rise to child labor and serious human rights violations. In 2015, Human Rights Watch documented the widespread practice of child labor in artisanal gold mines in Ghana. In the DRC, the NGO Southern Africa Resource Watch (SARW) revealed that militias and bandits have displaced artisanal miners in North Kivu province, forcing them to adopt a nomadic lifestyle.
There is no shortage of international and domestic instruments intended to protect ASGM, including the United Nations Guiding Principles on Human Rights and Business 2011, European Union legislation on conflict minerals, and U.S. law Dodd-Frank. However, there is a striking lack of transparency between companies and governments regarding the application of prescribed legal standards, as well as a dangerous inertia in the application of criminal laws against some of the perpetrators of the most serious offenses against artisanal miners.
Third, in the absence of a concerted and coordinated approach between different national authorities and international agencies for the protection of ASGM communities in difficulty, the activity continues to cause senseless suffering and loss of life, while profiting to dangerous organizations that directly threaten regional and international peace and security.
To eliminate these threats, governments, international organizations and gold sector players must coordinate action to dismantle criminal networks (seizure of assets from the illegal gold trade, visa bans on officials who collaborate with the Wagner group or any comparable organization, strengthening judicial cooperation to increase the number of prosecutions, monitoring of refineries and processing centers, etc.) and integrate ASGM into legal supply chains (formalization of the activity mining artisanal, development of early warning systems for vulnerable mining communities, expansion of gold purchasing programs by central banks, awareness among buyers to find out about the source of gold sold in stores, etc.).
Also read:
09/30/2024 – Western banks facilitated Wagner’s mining operations in Africa (report)
07/19/2024 – How Russian and Chinese security companies operate in Africa (report)
20/12/2023 – Exit Wagner, Russian operations in Africa will now be carried out under the banner of the Africa Corps
02/23/2023 – Close-up on the organizational charts of companies controlled by the Russian Wagner group in Africa (Report)
