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Uganda’s mysterious gold trade
Brendan Ryan
Posted: Mon, 06 Jun 2005
[miningmx.com] -- The Human Rights Watch (HRW) report on AngloGold Ashanti’s exploration work in the Democratic Republic of Congo (DRC) lifts the lid on the extent of the illegal trade in gold smuggled out through neighbouring Uganda.
As a result of this expose, Swiss refinery company Metalor Technologies has decided to suspend gold imports from Uganda: "because of controversy over the origin of the supplies following investigation by UN experts and the Human Rights Watch into the gold trade in the DRC."
Point is that Uganda is not a gold producing nation. According to HRW - quoting official Ugandan statistics, the country produced gold worth a mere $23,000 in 2003. Yet, that same year, Uganda officially exported gold valued at $45,8m. In 2002 domestic Ugandan gold production amounted to $24,817, but exports totalled just under $60m.
According to HRW, all that gold is
sourced from the gold fields of the North East DRC from where it is mined and exported illegally and is then "legalized" in Uganda where the trade is loosely regulated.
The HRW report comments: "The Congolese population gain almost no benefit from this trade; instead they suffer grave human rights abuses by groups seeking to control the trade and the gold mines."
The assertion made by AngloGold Ashanti CEO Bobby Godsell is that the DRC would receive considerable benefits including the payment of taxes and duties from the establishment of a properly-run gold mine in the region.
According to HRW: "Traders in Kampala do not require their Congolese clients to present documents authorizing the export of gold, operating on an ’ask no questions’ basis. "They treat the gold as if it were a transit good, filling out customs forms and other documents required to make its export legal from Uganda and accepted in the unregulated global market."
HRW reckons
70% of the gold exported from Uganda goes to Switzerland which was Uganda’s single largest trading partner in 2002. Pinning down the exact amount of trade is not possible because the Swiss government does not provide a breakdown of where it imports gold from.
HRW pinpointed Metalor Technologies as one of the importers according to information from one of the major Ugandan gold exporters - Machanga Ltd - which also confirmed to HRW that it bought gold from the DRC.
"Thus Metalor through its purchases of gold from Machanga may be indirectly involved in a trade that supports an armed group responsible for serious human rights abuses," the HRW report believes.
Correspondence from Metalor to HRW in January and February stressed that the company operated in accordance with the Swiss Precious Metal Control Act and the Money Laundering Act and that "due diligence is carried out by all reasonable and lawful available means."
However, a statement now
posted on Metalor’s website announcing the decision to suspend gold imports from Uganda states: "While we are confident with our due diligence procedure, we will not accept any deliveries from Uganda until such time as we have clarity on the country’s position and statistics on gold production and export."
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