Rebels, Army Seen Profiting From Congo Gold Despite Controls – by Thomas Wilson (Bloomberg News – June 21, 2016)

International regulations aimed at curbing the trade in so-called conflict minerals have failed to stop rebel groups and elements of the army in eastern Democratic Republic of Congo profiting from gold mining in the region, according to a United Nations group of experts.

The lack of a functioning traceability system for gold is a “particular area of concern,” the panel, which monitor sanctions on the Congo, said in a report to the UN Security Council published June 16. “Gold from non-validated mining sites, and therefore possibly benefiting armed groups, is laundered into the legitimate supply chain and, subsequently, into the international market,” it said.

Gold production has increased exponentially in Congo from almost nothing in 2011 to 25.5 metric tons (820,000 troy ounces) last year, as commercial mines run by London-listed Randgold Resources Ltd. and Toronto-based Banro Corp. have started up.
Officially, only 583 kilograms of gold was produced by artisanal and small-scale miners last year, much of which was sold in Dubai, the panel said, citing government statistics. The real figure is suspected to be much higher, it said.

Congo’s Chamber of Mines in February said that as much as 400 kilograms of illegal gold leaves the South Kivu province alone every month. Congolese exporters under-declared exports by as much as $174 million in 2015, depriving the state of tax revenue, the panel said in the report.

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