UAE SECURES 25 YEARS OF CONGO GOLD EXPORT RIGHTS

Mon 05 June 2023:

The government of the Democratic Republic of Congo (DRC) has signed an agreement which gives a company in the UAE exclusive export rights of locally extracted gold for 25 years as well as a preferential tax rate of 0.25 per cent. The deal was apparently finalized late last year in an effort to eliminate the Congolese informal, or artisanal, mining sector.

Experts say illicit trade in gold and other minerals in eastern DRC has long fuelled the dozens of armed groups that have plagued the region for decades. Much of the trafficked minerals are thought to transit through neighbouring countries, particularly Rwanda. On May 1, soldiers raided several gold traders in Bukavu, seizing gold, cash and computers and arresting dozens of people allegedly involved in the illicit side of the business.

Gold smuggling costs the DRC millions of dollars in tax revenues annually. However, critics of the deal, which can be renewed after 25 years, say that it will not resolve any of the issues it is supposed to address. Analysts and a coalition of 14 organizations affiliated with the DRC, along with international groups advocating for transparency in the mining and financial sectors of the country, have expressed concerns regarding the duration of the contract as well as the tax rate.

The DRC government argues that the informal mining sector helps to finance the armed groups which are destabilizing the mineral-rich eastern regions of the country.

The UAE Ministry of Foreign Affairs and Premier Group, the company said to be involved, have yet to respond to requests for comment.

The illicit trade in Congolese gold has come under increasing scrutiny in recent years, especially since a 2020 UN report exposing the links between illicit gold mining and trade, on one hand, and the activities of rebel groups in the east of the DRC, on the other. According to the UN, only 60 out of about 1500 gold mines were certified conflict free.

In recent months, businesses that profit from the illegal trade have come under fire internationally, including the African Gold Refinery (AGR) in Uganda, and its beneficial owner and former director, Belgian gold trader Alain Goetz.