How a Sanctioned Russian Company Gained Access to Sudan’s Gold

Sudan's government denies the presence of the Russian company in the country, which the U.S. Treasury highlighted in a 2020 sanctions notice.

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Dozens of battered trucks laden with gold-bearing Ore snake their way across the desert in northeastern Sudan and dump their loads at a compound on the outskirts of the town of Atbara

The small-scale miners in the River Nile state move the tons of their gold, silver, and other minerals into a processing plant using diggers and conveyor belts. Only a small group of people know how much gold the operation produces, who it is sold to or where it ends up.

The first evidence that the compound is owned by Meroe Gold is in the Commercial Registry documents. In addition to access to lucrative mineral deposits, Meroe has licenses to operate in Sudanese industries such as transport and agriculture.

The permits obtained by Meroe show the links between Russia and the U.S. Treasury.

Bobby Ghosh wrote about the damage done by the war in Africa.

When Bashir visited Russia in October of last year, he threw the door wide open to Sudan's resources, according to an independent U.S.-based researcher. He spent five years investigating Sudan's mining industry and found a lack of official oversight.

Ukraine, Syria

The company was accused of dangerous and destabilizing operations by the Treasury in 2020.

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Read: Putin's indictment, Chef's descent on Africa, and Mercenaries in Tow.

Dozens of miners, executives, engineers, consultants and analysts in Sudan say that the relationship with the Bashir administration helped Meroe secure an operating permit and access to cheap, semi-processed gold.

Small-scale miners operating in the Al-Ibedia locality close to the Meroe plant sell their gold to middlemen who send it to local markets and mills. They said that samples of their diggings are taken before a price is agreed on.

Work Intensifying

Sudan's Foreign Ministry said in a March 23 statement that the nation's gold industry and military training aren't provided by the company. In April, officials from the U.S. and U.K. said that Meroe had intensified work at the project site.

The finance and mines ministries didn't respond to repeated emails seeking comment. The contact details for Meroe were not available.

Russia welcomed a Sudan leader wanted by the World Court.

You fall under the category of provocative and hostile media, according to Concord Group, the company that the U.S. Treasury says is controlled by the same person.

The Foreign Ministry said that the company is a private one.

The company's expansion in Africa shows the limitations of Western nations' attempts to censure it and other Russian firms after Putin's decision to invade Ukraine.

Sudan is one of the world's least-developed countries and is ranked among the world's 20 most corrupt countries. Finance Minister Gibril Ibrahim estimated that only a fifth of the country's gold output was smuggled out of the country. More than $4 billion of gold is not accounted for, according to central bank data.

According to data provided by Sayari Labs, a Washington, D.C.-based financial-intelligence company that seeks to prevent financial crime, Meroe has imported goods worth $11 million over the past five years.

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The U.S. says that Yevgeny Prigozhin, a businessman from St. Petersburg, is the controlling owner of Wagner. Putin gave Prigozhin an award for his service to the state and has praised his international work. According to the U.S. government, Prigozhin's businesses offer weapons training and electioneering services.

The US indicted Prigozhin and his group of companies for interfering in the 2016 American presidential election, with authorities accusing him of running a troll farm that sought to bolster Donald Trump's campaign. Concord's lawyers denied the allegations before the U.S. government dropped the case.

The U.S. Treasury imposed asset freezes on Meroe and M-Invest, accusing them of helping to undermine democracy in Sudan and exploiting its minerals. U.S. citizens and entities were not allowed to make transactions with each other.

Concord said in a response that Prigozhin has nothing to do with any private military companies. The company said on April 11 that Prigozhin isn't linked to M-Invest or Meroe Gold.

Civil rights groups warn that the sanctions imposed on Wagner could be rendered useless if there is no public records or transparency.

Phil Kittock is the program director for Sayari Labs.

The lack of proper oversight over Sudan's mineral resources works to the advantage of the companies that extract them and their local partners, said Abdul Moniem Sidig, a senior member of the Sudanese Gold.

The Sudanese economy has lost a lot of wealth.

A former rebel is trying to turn around Sudan's economy.

With assistance from William Clowes.