Mali to Dubai: Artery for West Africa's booming illegal gold trade
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Loading... - Kwesi Doku
- 29 Aug 2022
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West Africa’s lucrative gold trade has a costly dark side. Discrepancies in data on gold production and trade between Mali and Dubai in the United Arab Emirates (UAE) expose a massive illegal business, particularly in the artisanal mining sector. These illicit dealings not only strip West African countries of billions of dollars but fuel conflict through the financing of violent extremism.
Rising global gold prices have attracted significant interest in the metal’s extraction from local and international investors, especially in rural small-scale mining. Mali is Africa’s third biggest gold exporter, and around a third of its total production comes from artisanal mining. In 2016, the country exported 67 tonnes of gold valued at $2.2 billion. Of that, 46.9 tonnes were mined by industrial producers, with the remaining 20.1 tonnes extracted through artisanal means.
But although the UAE imported $1.52 billion in gold from Mali in 2016, Bamako recorded only $216 million in exports. Likewise, in 2014, Mali declared a gold production of 45.8 tonnes against the UAE’s import from Mali of 59.9 tonnes.
Mali taxes only the first 50 kg of gold exported per month, incentivising gold smugglers to ship the metal from Mali for a large tax break. This makes the country a magnet for the illegal gold trade in West Africa, which lacks a regional tax coordination framework.
An estimated 80 per cent of the artisanal gold in Mali’s supply chain is produced in Senegal. Porous borders, geographical proximity, transboundary ethnic affinity, safer routes through illegal entry points and years of instability in Mali facilitate the illicit trade. And although Senegalese customs authorities require gold traders to provide an official gold purity analysis certificate, most local traders rely on informal transactions and rarely produce such documents.
Mali is also used as a gateway to UAE gold markets by its neighbours and beyond. Libya and Venezuela recently used Mali as a platform to export their gold illegally to Dubai. In 2020, gold trafficking to Mali apparently brought in about $1 billion to the government of Nicolás Maduro in Venezuela.
Armed groups and terrorists in Africa are also using the illegal gold trade with Dubai to finance their activities, an anonymous expert on Africa’s gold trade told the ENACT project. In 2021 two terrorist groups engaged in a fierce battle to control gold mining sites in Mali’s Gourma region. And Swiss company Valcambi sourced significant quantities of the metal from Kaloti, a Dubai gold smelting firm, which was likely linked to armed groups in Sudan in 2012.
Gold illegally traded between Mali and Dubai is hand-carried by couriers transporting an average of 10 kg per trip. Flights between Mali and Dubai cost around $500, the equivalent of about 10 g to 12 g of gold, making a single trip profitable. Some traffickers move up to 40 kg of gold to Dubai every week. This is facilitated by corrupt airport staff, such as customs officers and police authorities in Bamako. Read More...
