- BIST10012,259+0.89%
- USD49.34+0.24%
- EUR55.21-0.01%
- GOLD4,208.00+0.42%
- INTEREST37.00%-1.00
- BITCOIN83,263+1.85%
- October 13, 202619°
- BIST10012,259+0.89%
- USD49.34+0.24%
- EUR55.21-0.01%
- GOLD4,208.00+0.42%
- INTEREST37.00%-1.00
- BITCOIN83,263+1.85%
- October 13, 202619°
US and EU sanctions shake Sudan’s gold sector
The US imposed new sanctions on Sudan over allegations of chemical weapons use, and the EU banned gold imports. Experts say the sanctions threaten the livelihoods of 4 million miners.
New US sanctions
The US administration imposed sanctions on Sudan over allegations that it used chemical weapons. The sanctions, which took effect on 20 July, bar Sudan from receiving loans or aid from international financial institutions. They also ban the export of most US goods to Sudan, excluding food and humanitarian aid.
The Khartoum administration denies the chemical weapons allegations. The Sudanese government established a national commission to investigate the allegations and demanded that the US disclose the evidence it holds.
Economic impact: "Financing routes will close"
Banking analyst Walid Dalil said the sanctions would shut down multilateral development financing routes for at least a year, forcing the country into less transparent and costlier alternative channels. Dalil also noted that correspondent banking relationships, already weakened by the war, would suffer further, and payment infrastructure projects would be disrupted.
According to Dalil, the sanctions will hamper the import of industrial and technical inputs, undermine the post-war restoration of production capacity, and weaken the Central Bank of Sudan’s ability to manage liquidity and the exchange rate.
The analyst suggested strengthening alternative arrangements such as correspondent accounts in yuan and channeling migrant remittances through informal channels to offset the loss of foreign currency.
EU and UK strike blow to gold sector
The Council of the European Union on 13 July banned the purchase, import and transfer of gold of Sudanese origin. The same decision also halted the sale, supply and export to Sudan of mercury and cyanide used in gold mining. The Council argued that gold is a significant revenue source for financing the conflict.
The UK imposed sanctions on illicit gold trading networks fueling the war in Sudan on 16 July, targeting 11 individuals and entities alleged to be financing both the Rapid Support Forces and the Sudanese army.
Massive employment in the gold sector
After losing 75 percent of its oil revenue and 90 percent of its foreign currency inflows when South Sudan seceded in 2011, Sudan saw traditional gold mining expand rapidly. The sector, which initially employed 500,000 people, grew to 2 million before the war and reached 4 million workers after the conflict broke out.
According to official figures, Sudan’s gold output peaked at 107 tonnes in 2017 before collapsing to 6.4 tonnes in 2023 with the war. Production surpassed 64 tonnes in 2024 and 70 tonnes last year. In the first half of this year, 36 tonnes of gold were extracted.
Minister and exporters concerned
Sudan’s Finance Minister Jibril Ibrahim said during a meeting with European Parliament officials in Brussels that they reject the sanctions on the gold sector. Ibrahim stressed that the private sector controls around 80 percent of gold mining, so the sanctions will directly affect a broad segment of society and lead to job losses.
The head of the Gold Exporters Association, Abdulmoneim al-Siddiq, said the European ban will negatively affect gold exports, encourage smuggling, and reduce revenue from official channels. Al-Siddiq noted that the restrictions on mercury and cyanide supplies will push prices up, raise production costs, and cut producers’ earnings as global prices decline. He recalled that the gold price is the main determinant of the Sudanese pound’s exchange rate.
UN warns of war economy
The United Nations warned on 15 July that Sudan’s war economy has become the main factor prolonging the conflict. In addition to gold, the UN noted that the exploitation of natural resources such as gum arabic is financing military operations and exposing global supply chains to human rights risks.
Meanwhile, gum arabic had been exempted as a humanitarian good under US sanctions in the 1990s; this exemption effectively continued despite changes in Khartoum’s leadership.
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