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Billions worth of gold smuggled to UAE from Africa

Much of the gold was not registered in the export records of African countries [Getty]

Date of publication: 24 April, 2019

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The United Arab Emirates (UAE) has been receiving billions of dollars’ worth of gold smuggled out of Africa and sent to markets in the West and beyond.

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UAE, gold, Africa

The United Arab Emirates (UAE) has been receiving billions of dollars’ worth of gold smuggled out of Africa and sent to markets in Europe, the United States and other countries.

In 2016, customs data reveals that the UAE imported $15.1 billion worth of gold from Africa, more than any other country, up from $1.3 billion in 2006.

The total weight was 446 tonnes, in varying degrees of purity at an increase of 67 tonnes in 2006.

Much of the gold was not registered in the export records of African countries, with large amounts of gold leaving Africa informally with no taxes being paid to the states that produce them.

Informal methods to produce gold, known in the industry as “artisanal” or small-scale mining, are increasing globally, providing a livelihood to millions of Africans and help some make lucrative profit.

Artisanal methods of mining began as small-time ventures. However, the traditional era of traditional mining has given way to large-scale, but dangerous, operations run by foreign-controlled criminal groups, according to Reuters.

However, not everyone in the chain is breaking the law. Some miners work legally by selling the gold to middlemen, who either fly the gold out directly or trade it across Africa’s porous frontiers, concealing its sources before couriers carry it out of the continent, mostly in bags.

The customs data provided by UAE to Comtrade, a United Nations register, reveals the Gulf state has been a major destination for gold from many African countries for years.

In 2016, the UAE imported almost double the value of African gold taken by China – the world’s biggest gold consumer – in 2015.

With gold imports of African origin worth $8.5 billion in 2016, the latest year for which data is available, UAE unseated China, topping the podium; while the Asian country came a distant second. Switzerland, the world’s gold refining centre, came third with $7.5 billion worth.

The UAE reported gold imports from 46 African state during 2016. However, 25 out of those countries did not supply Comtrade with data on their gold exports to the Gulf country, who said it had imported a total of $7.4 billion worth of gold from them.

Toxic effects 

Moreover, the oil-rich country imported far more gold from most of the other 21 countries than those countries said they had exported – at $3.9 billion worth of imported gold, about 67 tonnes, which is a huge amount, according to experts.

Over the past few years, increased demand for gold has made it attractive for informal miners to start using digging equipment and toxic chemicals to boost productivity, which led to contamination of rivers, insidiously poisoning the people who rely on the water to live.

Cheap mercury has long been used by small-scale miners to extract flecks of gold from ore, before rinsing it away.

The chemical element’s toxic effects damage body organs, including kidneys, heart, liver, spleen and lungs as well as lead to neurological disorders, such as tremors and muscle weakness.

Other harmful elements have also been used to extract gold, such as cyanide and nitric acid.

Western investors need gold to diversify their portfolios and India and China want it for jewellery. However, most Western companies – and the banks that fund them – avoid handling non-industrial African gold directly, for fear of exploiting the precious metal to fund conflicts or to commit human rights abuses.

In other states, including the UAE, these concerns have been flouted.

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