The United Arab Emirates and the Democratic Republic of Congo have formed a joint venture to increase gold exports from the central African nation, despite concerns over sourcing from conflict zones.
The venture, known as Primera, shipped around $300 million of gold in 2023, mainly to Dubai, according to its chief executive officer, Alain Goetz. This year, the company plans to quadruple that amount, reaching about 25 tonnes of gold, he said.
Primera operates a gold refinery in the eastern Congolese city of Bukavu, near the border with Rwanda. The refinery sources gold from artisanal and small-scale miners, who dig the precious metal by hand in remote areas.
Goetz said Primera has strict due diligence procedures to ensure that the gold it buys does not fund armed groups or human rights violations. He said the company works with the Better Sourcing Program, a Swiss-based initiative that uses technology to trace the origin and supply chain of minerals.
“We are very confident that we are not buying any conflict gold,” he said. “We have a very transparent system. We have cameras, we have GPS, we have fingerprints, we have everything.”
However, Primera’s operations have raised red flags among some experts and activists, who say the company may be violating international sanctions and regulations on Congo’s gold sector.
The UN Group of Experts on the DRC, which monitors compliance with an arms embargo and sanctions regime, said in a report last year that Primera had not obtained the required authorization from the Congolese government to export gold. The report also said Primera had not paid taxes or royalties on its gold exports and had not disclosed its beneficial owners or shareholders.
The report also questioned Primera’s relationship with Congo’s state-owned gold company, SOKIMO, which holds a 25% stake in the venture. The report said SOKIMO had not received any dividends or profits from Primera and had not been consulted on its operations or exports.
The UN experts also expressed concern that Primera’s gold may be coming from areas controlled by armed groups or criminal networks, who exploit the miners and the local population. They cited allegations that Primera had bought gold from a rebel-held territory in South Kivu province, where violence and human rights abuses are rampant.
The eastern Congo has been plagued by decades of conflict, fuelled by competition over its vast mineral wealth. Despite the presence of UN peacekeepers and a large Congolese army, dozens of armed groups continue to operate in the region, fighting for control of mines and smuggling routes.
According to the UN, more than 100 tonnes of gold are produced annually in the DRC, but only a fraction is officially declared and taxed. The rest is smuggled out of the country, mainly through neighboring Uganda and Rwanda, and then to Dubai, where it enters the global market.
The illicit trade in gold deprives the Congolese state of much-needed revenue and also contributes to environmental degradation, corruption, and human rights violations.
Goetz dismissed the UN report as “biased” and “unfounded”, and said Primera had complied with all the legal and regulatory requirements in the DRC. He said the company had paid more than $12 million in taxes and royalties to the Congolese authorities in 2023 and had invested more than $50 million in the refinery and its infrastructure.
He also said Primera had created more than 300 direct jobs and supported thousands of indirect jobs in the gold sector. He said the company had provided training, equipment, and health and safety standards to the miners, and had also supported social projects in education, health, and agriculture.
“We are not here to exploit the country, we are here to help the country,” he said. “We are here to create value, to create wealth, to create jobs, to create development.”
He said Primera’s partnership with SOKIMO was based on trust and mutual benefit, and that the state-owned company had received dividends and profits from the venture. He said SOKIMO had also been involved in the decision-making and oversight of Primera’s operations and exports.
He said Primera had no links to any armed groups or criminal networks and had no interest in buying conflict gold. He said the company had a zero-tolerance policy for any violations of human rights or environmental standards.
He said Primera’s goal was to help the DRC become a major player in the global gold market and to improve the lives of the Congolese people.
“We are very proud of what we are doing,” he said. “We are bringing hope to a region that has suffered a lot.”
Source: Bloomberg
