African Gold Refinery recently launched a gold refinery in Uganda. For a country such as Uganda, which does not produce that much gold, the launch of the refinery has raised the prospect of suspicious minerals coming into Uganda.
ALAIN GOETZ, the chief executive officer of African Gold Refinery (AGR), told Jeff Mbanga how Kampala is a hub for gold, and why international pressure towards the certification of minerals to stamp out dirty minerals is a complete waste of money and time.
The launch of African Gold Refinery is being seen as a way of promoting conflict minerals in the region, especially those from the volatile eastern DR Congo. Are you here to promote conflict minerals?
Conflict minerals don’t exist. All minerals are created by God. He did not put conflict minerals in the universe. It is the people who use it; they are the conflict guys. You cannot shoot with a mineral. You have to get the mineral, sell it and get money, and then buy guns. It is with the guns that you can shoot.
If, for example, you say conflict dollars, why not source [certify] all the dollars in the world? Why don’t you go to the US and say, what are you doing with all these conflict dollars? It does not make any sense, but it sounds very good: blood diamonds, conflict minerals.
I am 30 years in this business. And I am one of the leading experts on gold in this region. I have never seen one gram of conflict gold, and I will not recognize it. If I see one gram of normal gold and one gram of what they call conflict gold, I don’t see the difference.
Even the UN group of experts [which has written numerous reports linking rebel activities to the trade in gold in DR Congo], they don’t know. You have to ask, what is the purpose of those who define conflict gold? For us, we are fighting poverty. For them, they [the UN] have been doing all these investigations for 13 years.
They spend huge amounts of money; they take it from the budget of Uganda, the DRC, and make a report. Now it is difficult for us to get finance because of the reports from Global Witness. The banks are pulling back and we don’t get funders anymore. So, what is the result of all these things? Is there less war? Is there less poverty? Nothing. Zero. They [investigators] get richer; that’s all. That is the only result. And I think somebody has to stand up to them and say, it is enough.
We stand up to them because we have to; and we will form a lobby. How do we know that you have not dealt in conflict minerals?
We have to get audited for responsible sourcing of minerals. We spend $100,000 a year to be audited, just papers. And they charge you anything because you want to get money from the bank, you have to get audited. It is useless, just useless.
There have been widespread calls towards the certification of minerals. Is it something you support?
Same guys. They are the same group. A poor country like Rwanda is spending $4 million a year on mineral certification. I have just come from Kigali, and I was with the minister of mining. How many schools can you build with $4 million in Rwanda? How many kids can you send to school with $4 million? It is incredible how people are getting blackmailed. It is a blackmail on African governments. It is a scandal.
Does AGR require companies to prove their minerals have been certified?
You can certify. I can also spend $200,000 for certification. I will get a UK guy sitting here and checking the paperwork. And then a warlord will come here with gold, and then we shall say ‘no, no, no, you are a bad guy, get out.’ What he will do is go to Kampala to a certification organization, get the paperwork, and come back here by 5pm.
What is the result? There is no result. Minerals out of the ground are traded. So, it does not make any sense to certify minerals. It would make sense if it was food to avoid food poisoning.
There you have a supply chain. But for minerals, it does not make any sense because you can put it somewhere in a corner and sell
it after a week, or a warlord can give the gold to his brother and he brings it here at the refinery. I have never seen a warlord and I have never seen a conflict gram of conflict gold.
So, exactly what do you do not to trade with businessmen who might be trading in minerals that other organisations define as blood minerals?
We have a strong compliance and due diligence procedure. We ask where they come from; where is your license; what is your procedure? So, that is all in the power of the private company; we are not customs and we are not policemen. Gold is $250 per ounce. The refining charge is between $4 and $6. So, the refining charge is a very small component of the total value.
And very small compared to the value of the investment. So, a company like AGR will be extremely stupid to do business that is not in line with international standards. So, there is no refinery in the world that I know of that can buy from blacklisted people.
How much trade are you looking at from DR Congo?
We are in Uganda; so, we follow Ugandan law. We are checking the people that supply us. So, if someone has a valid mineral license, we can buy from him. And then we check the procedures of his suppliers. Where the gold comes from, we can check. We have [licensed] dealers from DR Congo coming to Uganda. But in terms of percentage of trade, we don’t know yet.
We have our own suppliers from Congo. We have an office in Bukavu in DR Congo, which will start operations soon. At the same time, we shall have a centre in Bunia and in Butembo to get the gold.
We are not doing anything illegal, everything we do is legal.
How much potential for gold is there in Uganda?
For sure Uganda has potential for gold. What we are planning this year is to try and put collection centres in the mining areas and get the gold from there. This is a refinery and it has to be fed with raw materials. The supply to the refinery is now being done by the dealers in Kampala. But we are looking at areas like Karamoja.
Kampala is a very lively hub for gold for many years. Many people come from all over the region – South Sudan, DR Congo - to buy goods in Kampala. But they cannot bring money from South Sudan or Congo. So, they buy the gold, they come to Kampala and buy the goods. So, that is one way of attracting gold from all over the region.
What do you bring to Uganda?
The most important thing is that we bring more transparency. The gold is now mapped; it is not smuggled anymore. That already is a big start, and from that point we can extend the certification of origin. So, now we can say where does it come from, but it is a long-term project.