The Wagner Group, a private military company linked to the Russian state, has reportedly generated over $2.5bn through illicit gold mining operations since the invasion of Ukraine, according to a World Gold Council (WGC) report.
The ‘Silence is Golden’ report, published on November 18, states that these billions have been directed to the Russian military, funding the country’s invasion of Ukraine, and highlighting the connection between the illegal gold trade and global security threats.
“On the battlefields of Ukraine, as the struggle for control of territory hangs in the balance, it is noteworthy how little concerted political will there has been to halt the illicit flow of profits from the exploitation of gold resources in Africa into the Russian war machine,” the WGC report says.
“With Ukraine in need of more financial and military support to withstand the Russian offensives, and rising donor fatigue on both sides of the Atlantic, the strategic failure to address these illicit financial flows is even more glaring.”
Artisanal and small-scale gold mining (ASGM), which accounts for about 20% of the world’s annual gold supply, is central to this shadow economy. While ASGM employs millions worldwide, it is frequently exploited by criminal networks, corrupt officials, and mercenaries, leaving communities vulnerable to violence and economic hardship.
Groups involved in ASGM now include Russia’s Wagner Group, which has been engaged in mining operations in countries like the Central African Republic and Mali.
“The mysterious death of Yevgeny Prigozhin, head of the Russian mercenary Wagner Group, in a plane crash in August 2023, has not curtailed Russia’s looting and pillaging of natural resources around the world – from Libya to the Central African Republic (CAR),” the report says. “Instead, the Kremlin has seized the moment to wrest back control over those lucrative business interests.”
In a similar vein, in its 2023 report, ‘Guns for Gold: the Wagner Network exposed’, the United Kingdom’s House of Commons Select Committee on Foreign Affairs documented the “trail of atrocities” in virtually all theatres where Wagner have operated, functioning “like an international criminal mafia, fuelling corruption and plundering natural resources”, noting that “its wealth creation sits largely in Africa”.
According to the WGC report, “Far from curtailing its activities since the death of Mr Prigozhin and its incorporation into the Russian armed forces, there are increasing reports of the Wagner group expanding its control of natural resources in Mali, including seizing control of an artisanal gold mine at Intahaka in February 2024.”
Efforts to combat the illegal gold trade include frameworks like the EU’s Conflict Minerals Regulation and the US Dodd-Frank Act, but enforcement remains weak. Major trading hubs such as Switzerland, Hong Kong, and the UAE are frequently implicated in laundering profits from this trade, complicating regulatory oversight.
“Beyond the Wagner Group, the illicit trade in gold also fuels civil wars, most notably in Sudan. Both main factions in the current conflict, the Sudanese Armed Forces and the Rapid Support Forces nurture cross-border networks to channel illicit gold, often plundered from ASGM communities, to enable them to rearm and sustain their military efforts,” the WGC report says, noting “the UAE is a key hub for trading gold from Africa, including Sudan, and has been regarded as vulnerable to illicit smuggling and laundering.”
The WGC report calls for decisive global action, including prosecuting those involved, imposing sanctions, and increasing transparency across gold supply chains. Governments are encouraged to use measures such as the Magnitsky Act and to integrate responsible ASGM into formal economies.
The report also advocates for stronger support for ASGM communities, including legal frameworks for land rights, licensing, and taxation. Initiatives like central bank-backed gold-buying schemes could encourage ethical trading practices while diminishing the profitability of illegal operations. Expanding anti-money laundering programmes and empowering agencies like Interpol are recommended to reduce illicit financial flows tied to the gold trade.
The report was penned alongside Dominic Raab, the former Deputy Prime Minister of the United Kingdom, and features other expert commentators, including Helen Clark, the former Prime Minister of New Zealand.
“Increasingly, there is evidence of the growing contribution of illegal mining to international crime, corruption and conflict,” Clark said.
In the report, the WGC identifies 24 strategic actions for governments, NGOs, and private organisations to dismantle illicit networks, formalise ASGM, and mitigate exploitative practices. David Tait, CEO of the WGC, emphasised the human cost, noting that without viable economic alternatives, impoverished workers are pushed into artisanal mining under dangerous conditions with minimal gains for their families.
The report concludes with a warning that the illicit gold trade, if left unchecked, will continue to undermine global stability by financing terrorism, organised crime, and state-backed aggression./IntelliNews/