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Sudan Hopes Gold Refinery Can Replace Oil Income Lost After South Sudan Secession

In an attempt to recoup the income Sudan lost when South Sudan seceded last year—and took three-quarters of Sudan’s oil production with it—Sudan’s President Omar al-Bashir has opened the nation’s first gold refinery.

Officials say it immediately becomes one of Africa’s largest gold plants, eventually hoping to challenge the Rand Refinery in South Africa in annual tonnage.

The Sudan Gold Refinery is expected to produce more than 328 tons of gold each year, compared to the 600-ton capacity at the Rand Refinery. Now that the refinery is open, Sudan is expected to ban the export of gold ore from Sudan.

While there is much gold to be mined in Sudan, up to this point it’s been hard to know the nation’s mining potential because much of the mining was done by “unofficial” miners working on their own. Sudan hopes to sell $3 billion worth of gold this year, according to Reuters.

The refinery will also process silver and will process gold from nearby nations, such as Egypt, Eritrea, Chad and the Central African Republic.

The intent with the refinery is to reduce the rampant smuggling of gold that is currently done in Sudan, where it is sent to other markets like Dubai.

“The refinery is the first project of its kind in Sudan and the second in Africa for producing and extracting gold and silver with high quality and purity,” China’s official Xinhua news agency quoted the director of the refinery, Mohamed Hassan Osman, as saying at the opening.

Sudan has been hurting since a dispute with South Sudan earlier this year prompted South Sudan to halt oil production, resulting in a drastic reduction in Sudan’s income. The dispute centered around how much South Sudan should pay to export crude through pipelines in Sudanese territory to a Red Sea port.

Envoys from China, which has been trying to broker a settlement in the dispute because Sudan is one of China’s top foreign suppliers of crude oil, have predicted that the oil might resume flowing by November, but officials in the South Sudan capital of Juba are skeptical a settlement will come that quickly.

Before the dispute, Juba was producing 350,000 barrels of oil a day. The shutdown forced Sudan to impose spending cuts on its citizenry because of lost income.

While Sudan says it hopes the gold can make up for lost income, experts remain doubtful that the gold refinery will be that lucrative because they believe much of the nation’s gold will continue to disappear into the black market.

 

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