Renowned for its vast mineral deposits, the region of Central Africa has recently found itself in the crosshairs of internationally connected organized crime groups due to the skyrocketing price of gold during the global COVID-19 pandemic.
While gold mining is a traditional activity in most Central African countries, the economic uncertainties linked to the pandemic have pushed global investors towards the commodity, often seen as a safe haven in troubled times. In August 2020, the price of gold hit an unprecedented peak at USD 2,048 per ounce.
At the same time, demand for other Central African minerals such as the ‘3Ts’ – tin, tantalum and tungsten – has decreased over the past decade due to a collapse of international prices and more stringent sourcing requirements for purchasing companies.
Paradoxically, while gold prices were rising globally, border closures and other COVID-19 restrictive measures disrupted gold mining supply chains, causing field gold prices across Africa to fall by up to 50%. In the Central African Republic, for instance, gold prices at mining sites had dropped to 50-60% of world market prices.
These factors have led to what some are calling a new gold rush in Central Africa’s gold mining hotspots, especially in the artisanal and small-scale gold mining (ASGM) sector that mostly takes place in the informal or illegal economy.
Past gold rushes in the region have often seen an accompanying increase in criminal activity and a new INTERPOL report entitled ‘Illegal gold mining in Central Africa’ shows that the present production boom is no exception.
“Information suggests that gold mining is largely controlled by criminal consortia composed of [...] organized crime groups, corrupt officials in high-ranking positions, economic players, and non-state armed groups in conflict zones,” the report states.
These various actors work to extract a maximum of value from illicit gold mining while avoiding the payment of any export taxes that would benefit national government revenues. “Most gold in the region is illegally produced, concealed from authorities and smuggled out of the countries,” notes the report.
Gold mined in Central Africa is often smuggled to other ‘transit’ countries in East or West Africa where it is then exported or smuggled beyond the continent. Such a profitable illicit revenue stream has attracted various types of organized crime groups to gold mining, including armed separatist or terrorist paramilitary groups.
“Non-state armed groups in the DRC and CAR finance their activities by controlling gold mining sites and smuggling routes, as well as using extortion through illegal taxation,” the INTERPOL report explains. “However, the major part of illicit profits generated goes to organized crime groups.”
Gold allows organized crime groups to launder illicit profits and has inherent features sought by criminals. The commodity has a high and predictable value, is easy to smuggle, and can be traded nearly anonymously.
Organized crime groups involved in illegal gold mining and smuggling are also linked to other serious criminal activities, such as human trafficking, financial crime and poaching.
It is difficult to overstate the environmental degradation caused by illicit gold mining across Central Africa. Miners use chemicals such as mercury and cyanide to extract gold from ore. Such chemicals are toxic even in small doses and contaminate air, soil, water and all animal and plant life.
In the Republic of Congo, for instance, where an estimated 15.9 kg of mercury is released annually, gold mining is the “main cause of water, fish and public health problems” according to the local authorities.
The INTERPOL report was produced as part of Project ENACT, which seeks to assist police in Africa to adopt proactive strategies to combat organized crime threats, facilitate information exchange and enhance investigative skills.
Project ENACT is funded by the European Union and implemented by INTERPOL and the Institute for Security Studies, in partnership with the Global Initiative Against Transnational Organized Crime.