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


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

By. Simon Marks and Mohammed Alamin

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 tons of ore, extracted by small-scale miners in the River Nile state, are then moved into a processing plant using diggers and conveyor belts. Only a handful of insiders are privy to how much gold the tightly guarded operation produces, who it is sold to or where it ends up because no public records are available.

Commercial Registry documents seen by Bloomberg provide the first evidence that the compound is owned by Meroe Gold, a company the U.S. Treasury says has ties to the Wagner Group, which it describes as a mercenary company connected to the Russian Ministry of Defense. In addition to access to lucrative mineral deposits, Meroe has licenses to operate in Sudanese industries ranging from transport and agriculture to plastics, the documents show.

The permits obtained by Meroe illustrate the links that the U.S. Treasury describes as “an interplay between Russia’s paramilitary operations, support for preserving authoritarian regimes and exploitation of natural resources.” Meroe, one of dozens of operators in the gold industry, has been investing in Sudan since 2017 — the same year the Treasury says Wagner developed plans for then-dictator Omar al-Bashir to suppress pro-democracy protests.

Read: Africa Becomes Collateral Damage of Ukraine War: Bobby Ghosh

“When Bashir visited Russia in October 2017, he threw the door wide open to Sudan’s resources,” said Suliman Baldo, an independent U.S.-based researcher who previously worked for The Sentry, a Washington-based group that investigates links between conflict and money in Africa. He’s spent five years investigating Sudan’s mining industry and found a startling lack of official oversight.

Ukraine, Syria
The European Union sanctioned Wagner in December for allegedly deploying private military operatives to conflict zones to fuel violence, loot natural resources and intimidate civilians in violation of international law. The Treasury in 2020 accused the company of “dangerous and destabilizing operations” in foreign countries such as Ukraine, Syria and Mozambique.

In Africa, unstable regimes have sought assistance from Wagner to prop up their governments. Last year, the U.K. and 14 other governments said they’d witnessed the deployment of Wagner mercenaries to gold-rich Mali to support its military rulers — an allegation the junta subsequently denied. Its contract soldiers have also backed the government of Central African Republic, one of Africa’s biggest diamond producers, and military commander Khalifa Haftar in an internal power struggle in OPEC member Libya.

Read: Putin’s Indicted ‘Chef’ Descends on Africa, Mercenaries in Tow

Wagner’s relationship with the Bashir administration helped Meroe secure an operating permit and access to cheap, semi-processed gold ore extracted by small-scale operators, according to dozens of miners, executives, engineers, consultants and analysts in Sudan interviewed by Bloomberg.

Small-scale miners operating in the Al-Ibedia locality close to the Meroe plant said they sold their tailings or artisanal gold to middlemen who are sent by Meroe to local markets and millers. Samples of their diggings are taken for assessment before a price is negotiated, they said.

Work Intensifying
Sudan’s Foreign Ministry said in a March 23 statement that Wagner doesn’t have a presence in the nation’s gold industry and isn’t providing training to its military. The ministry didn’t specifically deny Meroe’s presence in the country. U.S. and U.K. officials, who asked not to be identified because they’re unauthorized to speak to the media, said in April that Meroe had intensified work at the project site since Russia’s invasion of Ukraine.

Wagner, the state-owned Sudanese Mineral Resources Co., the central bank and the finance and mines ministries didn’t respond to repeated emails seeking comment. Bloomberg was unable to obtain contact details for Meroe.

Read: Russia Welcomes Sudan Leader Wanted for Genocide by World Court

“You fall under the category of provocative and hostile media,” Concord Group, a St. Petersburg-based company that the U.S. Treasury says is controlled by the same person who owns Wagner, said in response to a Bloomberg email seeking comment on Meroe’s operations in Sudan. “Therefore, we do not consider it appropriate to respond to your request.”

Russia’s Foreign Ministry has said that Wagner is a private company that operates independently from the government.

Wagner’s secretive and expanding business dealings in Africa show the limitations of Western nations’ attempts to censure it and other Russian firms after President Vladimir Putin’s decision to invade Ukraine. The company’s presence in Sudan also ups the ante in a proxy battle between Russia, which has been seeking to forge close ties with its military regime, and the U.S. and European Union, which have been pushing for a return to civilian rule since a coup in October.

One of the world’s least-developed countries, Sudan is a hotbed of illicit financial activity — Transparency International ranks it among the world’s 20 most corrupt countries. Finance Minister Gibril Ibrahim last year estimated that only a fifth of the country’s gold output passed through official channels, with the rest smuggled out of the country. Official bullion output was about 100 metric tons in 2019 and 21.7 tons were exported, central bank data show, leaving more than $4 billion of gold unaccounted for.

Over the past five years, Meroe has imported goods worth almost $11 million, including gold-processing equipment and a Russian-made twin turbine helicopter, according to data provided by Sayari Labs, a Washington, D.C.-based financial-intelligence company that seeks to prevent financial crime and promote greater transparency and accountability.

The U.S. says Wagner is controlled by Yevgeny Prigozhin, a restaurateur and tycoon from Putin’s native St. Petersburg, who has been dubbed the president’s “chef” because he provides catering services to the Kremlin. Putin gave Prigozhin an award for his service to the state in 2014 and has lauded his international work. Besides providing mercenaries and political operatives, Prigozhin’s businesses also offer weapons training and electioneering services, according to the U.S. government.

Prigozhin and his Concord group of companies were indicted by the U.S. in 2018 for interfering in the 2016 American presidential election, with authorities alleging he controlled a troll farm known as the Internet Research Agency that sought to bolster Donald Trump’s campaign. Lawyers for Concord denied the allegations before the U.S. government dropped the case in March 2020, citing Concord’s attempts to use the judicial system to gather information on how the U.S. detects and prevents foreign election interference.

In mid-2020, the U.S. Treasury accused Prigozhin of undermining democracy in Sudan and exploiting its minerals, and extended an asset freeze to Meroe and M-Invest, which it said “serves as a cover” for Wagner forces operating in Sudan. U.S. citizens and entities were also prohibited from entering into any transactions with them.

Concord said in a response to emailed questions on April 5 that Prigozhin has “nothing to do” with any private military companies. The company also said on April 11 that Prigozhin is not linked in any way to Meroe Gold and M-Invest.

Civil rights groups have warned that the absence of public records and lack of transparency in some jurisdictions could render the sanctions imposed on Wagner ineffective.

“Companies that continue to operate after being sanctioned will often begin using intermediaries or proxies to avoid appearing in-name on any shipments or transactions,” said Phil Kittock, program director for Sayari Labs.

While the lack of proper oversight over Sudan’s mineral resources works to the advantage of the companies that extract them and their local partners, the nation’s people are ultimately short-changed, said Abdul Moniem Sidig, a senior member of the Sudanese Gold Exporters Association.

“Sudan has lost a lot of its wealth,” he said. “Gold hasn’t contributed remarkably to improving the Sudanese economy.”

Read: Former Rebel Goes for Gold in Bid to Turn Around Sudan’s Economy

— With assistance by William Clowes

Source: Bloomberg

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