Race to refine: the bid to clean up Africa’s gold rush

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In a refinery just outside Uganda's main airport, workers slip bars of freshly refined gold into clear plastic bags sealed with a sticker of the ...

In a refinery just outside Uganda's main airport, workers slip bars of freshly refined gold into clear plastic bags sealed with a sticker of the national flag - black, yellow and red - and the label"Ugandan's Treasure."

Some of Africa's new gold refineries are in South Africa, a major gold producer with an already large refining industry. There, authorities granted 19 refining licenses in the year to March 2019 - as many as in the previous three years combined. But because informal miners already often operate through smuggling networks to avoid tax and scrutiny, officials and industry sources say some refineries risk inevitably joining these shadowy channels.

Two responses to the survey showed a lax approach: One small operator, Bupe Chipando who heads Alinani Precious Metals Ltd in Kenya, said he does not yet purify gold, but just melts blocks of impure metal together and ships them overseas. Officials said they knew of at least two other African refiners who did the same thing.

Six of Africa's new refineries - in Cameroon, Kenya, Mali, Rwanda and Uganda - shared output data with Reuters. With combined annual capacity for around 270 tonnes, they currently process around 41 tonnes of gold a year worth some US$2 billion. For comparison, refineries in Switzerland handle around 2,500 tonnes of gold a year, worth US$120 billion at current prices.

It is surrounded by a manicured lawn and palm trees. Inside, men in fireproof masks and aprons process metal through mills, furnaces and cooling drums. The Attorney General dismissed those allegations but the same month, U.S. Assistant Treasury Secretary Marshall Billingslea traveled to Uganda to ask authorities about the fact AGR accepted gold from Venezuela, a U.S. official said. Investigators have returned twice since, the official added.

Once Uganda's refineries started up, the country's official exports rose again. Since AGR launched in 2016, they have jumped to US$1.1 billion for 2018/19 - nearly triple the country's earnings from coffee. Goetz said he recently stepped down as CEO of the refinery to spend time on charitable work, sold his shares to an unidentified investor from the Gulf, and now acts as a consultant to the refinery. Asked who ultimately owns AGR, neither Goetz nor the refinery's spokesperson would comment.Africa's new refiners operate amid networks of buyers who are willing to pay extra for gold.

 

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