Sunday, February 18, 2018

Gold Mining in Sudan - terra incognita - Update

Despite its political instability, Sudan and South Sudan’s geology hosts high quality gold deposits.

The Blue Nile and the White Nile join forces at Khartoum. It slowly makes its way through the ancient Kingdom of Kush, before releasing Sahara sediment into the Mediterranean. From the confluence at Khartoum, the river is known as the Nile.
The gold deposits in Sudan look impressive; however, the issue will always be about risk. The fact not enough modern exploration has been undertaken in Sudan, and specifically South Sudan, is why the area is attractive.

South Sudan is considered terra incognita with regard to its economic geology, and infrastructure doesn't exist. A high risk region like Sudan demands a significant premium with higher returns and a shorter investment period.
Despite Sudan’s potential, there is an absence of large exploration projects and operating mining companies. Apart from small and artisanal mining in the south, no other mines are operating in the region. In the north, closer to Khartoum, the government owned Ariab Mining Company (AMC) has been operating the Derudeb and Hassai mines for more than two decades.

Sudan is not only blessed with gold. Beryl is found in the pegmatite of the Bayuda desert in central Sudan and chromite occurs in the Ingessana Hills. Copper with grades of 4.1% was mined 200 years ago in the Hofrat En Nahas deposit, while iron (Fe) deposits are located in the area of Jebel Abu Tulu.
Two years ago over 100,000 people fled a battle over a gold mine between two Arab communities in Sudan's Darfur region. The fighting broke out in the Jebel Amir gold mining area.

The fight was between the Beni Hussein, who are largely cattle herders, and the northern Rizeigat, a powerful tribe known for its camel herding. Scores of people were killed and dozens of villages burned. Members of the Beni Hussein tribe accused government forces of helping the Rizeigat.
Sudan expects to produce 50 tonnes of gold this year, earning $2.5 billion. The country is seeking to offset the loss of most oil reserves when South Sudan became independent.

Sudan is boosting production of gold and other minerals to gain new sources of state income and of foreign currency needed to fund imports. Output of 50 tonnes could potentially make it Africa's third largest gold miner behind South Africa and Ghana, and push it into the top 15 producers globally.
Sudan is among Africa's poorest countries, but is sitting on top of perhaps the largest gold reserves in the continent, according to a recent survey by Arab League's Arab Industrial Development and Mining Organization (AIDMO).