The gold mining sector in Sudan is one of the largest production sectors, which is beneficial to the state and the citizen, as Sudan enjoys abundance of this resource. However, the sector faces many problems. This paper addresses one of the salient problems that this sector faces, namely the lack of adequate oversight over the gold mining operations. The gold mining industry creates many problems in the River Nile, Northern, and Red Sea states, for example. These problems include messy mining operations; the use of polluting materials: leveling of vast arable land; and widespread diseases among the residents resulting from the use of chemicals. In addition to addressing these problems, oversight is also important to secure transparency of financial revenues, gain better understanding the procedures of mining companies, and lobby to provide job opportunities and services to the residents of the concerned region.
The established policy is to attempt to enforce oversight in most mining sites through the presence of native administration represented by a nazir, umda, or sheikh helped by a small group of individuals from the community. The group monitors mining operations in the region and sets specific percentages of production to be paid by companies and artisanal miners as a right of the community. Nonetheless, this policy is not effective enough, does not achieve a sufficient degree of oversight, nor meet citizens’ demands as it does not secure them receiving funds and service.
To address this situation, the authors propose several alternatives to the established policy that could achieve a greater degree of oversight and greater opportunities to realize the community demands:
1. Forming committees that truly represent the local community to ensure investing the revenues generated from companies’ fees in the community. The advantage is that the representatives will be chosen by the citizens themselves.
2. Forming a separate committee mandated to oversee health requirements of mining, non-use of toxic materials, and disposing of mining waste in a sound manner. The advantage here is that this committee would be able to focus on one matter without being preoccupied with setting and collecting fees.
3. Engaging local communities in planning and implementing companies’ corporate social responsibility (CSR) projects, which would help companies to identify the real needs of the population.
4. Developing a law that specifies the percentage of annual company profit that will be allocated to CSR, which would guarantee citizens in mining areas greater rights and better services.
Two options were chosen from the above policy alternatives. They are the first and second alternatives due to their inclusivity as they include the largest possible number of parties that contribute to the mining process: the government, companies, and the community. The other proposed alternatives individually do not satisfy the required oversight role. Together, the parties envisage can implement health requirements, law reform and revenue allocation for CSR, and carry out the developmental role in a sound manner.
Introduction
Sudan is distinguished by many economic resources as a result of its geographical diversity that contributed to the diversity of minerals. However, minerals are non-renewable resources that have an effective impact on the economy, particularly gold, as the gold sector contributes to the economic development in the country. Despite the sector’s contribution, mining operations have environmental, social and economic impacts on local communities in mining areas. It is noted that local communities lack an adequate oversight mechanism over both mining companies and local artisanal miners, in addition to the lack of exchange of knowledge on auditing of gold mining operations. The absence of this oversight has affected local communities. From a socioeconomic perspective, lack of information about the income, revenues, and procedures of companies and artisanal miners has led to depriving community members from benefiting from the fees paid to their communities. From an environmental standpoint, the materials used in gold mining processes cause harm in mining areas, as they cause water and air pollution, levelling of vast areas of arable land, and disease spreading among the population.
Methodology
This paper aims at clarifying the importance of the oversight role undertaken by local communities over gold mining operations, the actual role they are playing in mining areas, the scope of their oversight, and whether it is sufficient. It also aims at defining clear policies to monitor gold mining operations in a transparent manner. The paper utilizes a case study approach focusing on three main states: Red Sea, River Nile and Northern.
Challenges faced by the researchers
Due to the ongoing war in the country, the researchers encountered some problems in collecting information sufficiently. For example, it was not possible to reach many people identified for interviews due to communication difficulties or because they were forced into exile or to relocate. The researchers tried to reach the largest possible number by telephone, and they were able to reach a reasonable number of interviewees. Some of the researchers had to travel to the mining areas in the Northern State and the Haya region in the Red Sea State to conduct field interviews. Also, since the beginning of the ill-fated war, the country has suffered from interruption of Internet and telephone networks, which has often forced researchers to delay work or work intensively, when possible, to collect information from secondary sources in a short period.
Background
Sudan is the third largest gold producer in Africa. Gold mining has compensated for the revenue shortage the country faced after the loss of part of its oil imports due to the secession of the south. Al-Tayeb Al-Jaali, director of the Money and Minerals Market Project, confirmed that gold exports have increased from 14% of Sudan’s total exports, before the secession of the south in 2011, to 48% after secession. (Asim Ismail, 2023). Sudan produces between 95-100 tons of gold annually, but no more than 30 tons enter the public treasury; the rest is smuggled. Observers suggest that Sudan could gain no less than $5 billion a year, if it were able to control the gold trade. This amount would be sufficient to cover the country’s annual trade deficit, estimated at USD 3.77 billion during the first nine months of last year, according to the Trading Economics website. (Asim Ismail, 2023).
The latest report issued by the Sudanese Ministry of Minerals (MoM) in 2015 indicated that there are 361 licensed operating companies, while other reports estimate the operating companies at 423, occupying about 300 square kilometers of concession sites. Other data indicate that the number of operating companies is 140 working in the field of exploration, while gold is produced by about 12 to 15 companies, whose production volume constitutes about 20% of the total gold production in Sudan (Ahmed Bayoumi, 2023). Sudan relies heavily on gold exports to obtain foreign exchange. Last year, gold exports were equivalent to 46 percent of Sudan’s total export revenues amounting to $4.357 billion. (Abdul Azim, 2023).
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