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JUBA - 7 Jun 2021

INTERVIEW: ‘No formal gold mining in South Sudan’-Mining ministry

The undersecretary in the mining ministry, Dr. Andu Ezbon Adde, says that there is no formal gold mining yet in South Sudan, adding that what is taking place at the moment is small-scale artisanal works. He said the foreign companies involved in the sector have only been issued exploration licenses.

Radio Tamazuj interviewed him in his office and below are edited excerpts.

Q: How is gold mining being managed by your ministry in the country?

A: Actually, there is no formal gold mining taking place in South Sudan at the moment. What is taking place is artisanal work. That is mining done by the natives using crude traditional means and equipment. They use basins from washing the gravels, it is mainly recovery of secondary gold from the soil and gravels that is found on the surface.  

There are different ways in which people get the gold, and the simplest ways are digging out the soil or the gravel and then washing it in the river. They dig in the nearest place to the source and normally they pan until they get the concentrates and pick the gold using their figures. They don’t use any chemicals. They pan-pick the gold and then sell it to whoever wants.

Q: Is it done legally? 

A: No. it is not a company doing the mining, it is the natives, and those are artisanal workers. No company at the moment is doing any mining at all from our records. It is normally a family, a wife, and children who go and do panning close to their homes. It is not registered like in other countries and it is not illegal because they have been doing that since the 1930s and 1940s. So it is not illegal and it is not registered. 

Q: Where are the major gold-producing areas located and which state leads in gold production in South Sudan?

A: The main area where the local gold is being produced in South Sudan is the Kapoeta area and Budi County, then Luri river basin. There is upper Luri and the lower Luri, then close to the border is an area where gold is being locally obtained.

Another area with gold that the natives are not yet getting from is a border area with Sudan. There, the gold is found with copper ore, so the main area where the gold is being locally obtained are those.

Recently, towards the end of last year, in Maban-Upper Nile, the natives were extracting gold from the soil and the gravel. Now the major area is Kapoeta, even right from the 1950s, Kapoeta was known to be a gold area in Eastern Equatoria State.

Many companies are working in Kapoeta, like New Kush and Natura, which is a Turkish company, but they are just doing the exploration work at the moment. 

There is also Blackstone which is a South Sudanese company. They are registered to explore gold in Kapoeta.

There are 34 (Gold) companies all over the country, two from South Africa, one from Australia called Epic, but this one from Australia has got four concessions. Then Sudan has got two companies working here and they have got eight concessions. The major one is called Al-Cardinal which has six concessions. Then a Turkish company called Natura has got five concessions and then a United Arab Emirates Company called Manaji has four concessions. The other companies like Zungao of China, Sky gold of Lebanon, AG Vision of Nigeria, and 4MB of USA have got one concession each.

There are a total of 77 concessions owned or managed by 34 companies.

Q: Are there gold exports and how much does South Sudan get yearly in terms of revenue?

A: As I said there that there is no mining at all at the moment. What South Sudan may be getting now is only the fees from the licenses. It is not much money, it is 1.43 dollars per cadastral unit, so it is a very little amount of money.

Any country normally gets money from its minerals when mining is taking place because there will be royalties. This is the money to be paid according to how much minerals are being produced and exported outside. That is the money that the country benefits from.

Q: How much revenue is generated yearly in Eastern Equatorial State?

A: Most of the concessions are mainly in Eastern Equatoria State because it is the most promising area. Well, we have not categorized, we normally take the country as a whole and I think I can say that two-thirds of the money should be from the Eastern Equatoria gold operations. Then it varies from year to year. There are some years when few companies are working. From 2016 when the war broke out, no company was working in the field and there was no revenue. It is only recently when few companies came forward to get licenses for trading in minerals and the only mineral that the companies are interested in is gold. Fortunately, because of peace, companies are coming back. 

Q: In Budi County and greater Kapoeta, there are complaints from the locals about not having seen any development from gold mining. Is your ministry aware and what is the way forward?

A: Yes, I am personally aware. Since 1979 when I started working in the then Directorate of Industry and Mining, that complaint has been there. I worked under ministers like D.K Mathews and Bona Malual and we tried to explain to the natives but they took it differently. They think any company which steps into the area starts benefiting from the gold so they have been asking us where our share is. The truth is, normally, when the company is still doing exploration work, it is spending without getting anything at all.

According to our mining laws, a company has to do exploration work for years, find out the minerals, calculate the reserves, do the feasibility studies, then it can be allowed to start producing. They cannot produce right from the beginning, so during the time of three to five years of exploration work, the company is not benefiting at all. So it has nothing to give to the community. Only when production has started, as I said, then the community will get something from the royalties. You probably know that in the oil fields, 5 percent of the income of the company, the profits, goes to the producing state. Out of that 5 percent, 3 percent goes to the community and 2 percent goes to the natives but no company has reached that point of gold production.

What we have been insisting on the companies to do is to preserve the environment. It is not only developing the community, but the company must be conscious of preserving the environment. It is true no community is benefiting because no company is benefitting anything. 

Here in the ministry, when we started we had 10 states, we formed what they call mining advisory committees in each state. The people of each state selected their representatives from amongst themselves who will be working with the ministry because we know how companies are going to work. These committees are to monitor how the companies are doing their work without interfering with the environment and how much are they getting. So we formed the committees and it is still there to work closely with the ministry and so that we can know whether they are being cheated or not. 

In Juba, there is a company called Equator Gold in Gorom, in 2016 the community had stopped the company from working until something is done for them.

They wanted schools and hospitals until we had a meeting with the chiefs and they understood. They said if there is any manual work, then the natives should do it which they agreed on but not that a company arrives in an area and the same month they start building schools.

They also think that the company should give money to individuals. That is wrong. According to the law, anything that the company gives to the community should be in the form of services and it is a social responsibility that is there in any mining law. A company is allowed to do something for the community when production is taking place, this complaint will be solved when production starts.

Q: What are the prescribed fees for exploration and mining of gold?

A: An exploration license is USD 10,500 that is paid once for the license and then what is paid yearly is called a surface rental fee. If the company takes a big area it must pay a lot of money and also if it pays for a small one it must pay little money. They have been paying up to 2014 and 2015, 2016 some of them did not pay because of the war, and till now they have stopped completely. 

we sent warnings to them that once they want to resume the work they have to clear the arrears first, one person from the UK was here and I think he left on Monday and he came and we explained to him and he said he is going to raise money from the shareholders and then he will pay before he resumes the work. You cannot work for free without paying anything.

For example, during the time of the war, we understood why they had to run away and they didn't have to pay the surface fees for that period. 

Previously we revoked some licenses of companies that did not comply with the payment and I think we have revoked about four licenses for Epic, Natura, and Zangao. Even at the moment, we have submitted to our minister the revocation of ten licenses because the law says once the company has completed the first phase of exploration which is five years, it has to renew its license.

The renewal must be three months before the license expires but those companies did not renew their licenses. Although we know why they stopped, they need to renew or to tell us whether there is interest in going ahead or not.

So now the list of ten companies is with the minister because according to the law it is only the minister who can grant the license and it is only him who can revoke the license.

South Sudan is blessed with minerals, we have gold, the most important mineral, and then copper, silver, Iron, Zinc, manganese, and many others. There are about 20 minerals which we have and the companies are looking for.

Our gold, the quality is very high. I did the work for my Ph.D. which showed that our gold has one of the best qualities in the world. Refining the gold for export will be very easy. That is why despite the problems of our country, companies are still interested in coming to explore and mine our minerals, especially gold.

So what we should do is to keep the stability of the country, to keep united and then investors will come in large numbers to develop our minerals.