DRC to Fully Control Gold Export Venture Amid Slumping Shipments
The Democratic Republic of Congo (DRC) is finalizing a deal to take full control of Primera Gold DRC SA, a gold-export joint venture with its Emirati partner, after experiencing a significant drop in shipments.
Primera Gold DRC SA was launched in January 2023 by the DRC in partnership with Abu Dhabi-registered Primera Group Ltd. The venture aimed to curb gold smuggling that fuels conflicts in the country’s eastern provinces.
In its first year, the partnership sold 5 tons of hand-mined gold worth about $300 million. However, sales have since plummeted, despite ambitious targets for 2024.
According to United Nations experts, Primera Gold’s contract terms, which included a preferential tax rate of 0.25% compared to the 6% rate for its rivals, effectively gave it a “de facto monopoly” on legal artisanal gold exports.
Nevertheless, higher prices offered on the black market and banking regulations limiting daily cash transactions with traders preferring hard currency hampered its success.
The upcoming sale will conclude a controversial phase in Congo’s relationship with the United Arab Emirates (UAE), which has used its oil and gas wealth to expand influence in Africa.
Beyond mining investments through Primera Group, the UAE has provided equipment and training to Congo’s army, currently fighting numerous militias in the mineral-rich east.
“Congo will purchase all of the shares that belong to Primera Group at a price that will be set following ongoing discussions,” Primera Gold stated in a response to questions relayed through a spokesperson for Congo’s President, Felix Tshisekedi.
The government will continue managing the company, while Primera Group will develop a separate venture to refine tin, tantalum, and tungsten from the region. The original partnership agreement for gold had a 25-year term.
Primera Group, which owns 55% of Primera Gold, did not immediately respond to requests for comment. Similarly, the UAE’s foreign affairs ministry did not reply to a comment request.
Currently, the UAE is the DRC’s second-largest bilateral creditor after China, according to the DRC’s debt office data.
For nearly three decades, smuggling from eastern Congo has financed local and regional conflicts. The DRC government claims that much of the trafficking goes through Rwanda, Uganda, and Burundi, countries that have exported billions of dollars worth of gold in recent years despite having few mines of their own. These countries deny shipping stolen gold.
In a January report, UN experts stated that Primera Gold’s operations “did not significantly curb gold smuggling” and highlighted a “lack of transparency” regarding the provenance of some metals acquired by the firm. Primera Gold rejected these allegations.
Despite tax benefits, the firm’s monthly shipments to an Abu Dhabi-based refinery linked to Primera Group have dropped by over 50% since November, according to company data seen by Bloomberg.
Primera Group now plans to focus on eastern Congo’s tungsten, tin, and tantalum, widely used in portable electronics. The company intends to construct a smelter for these metals “according to the demands of profitability,” as stated by Primera Gold’s management via the DRC presidency.
