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GOLD TERRORIST FUNDING IN BURKINA FASO

Kevin Bocaj, Michelle Kaplun, Illicit Finance and Economic Threats (IFET) Team

Week of Monday, August 2, 2021


Gold mines in Burkina Faso have become targets for militant and jihadist groups[1]


Burkina Faso is the fourth-largest producer of gold in Africa, producing a combined total of approximately 93.4 tons of gold in 2020.[2] Currently worth approximately $4.9 billion USD, gold produced in Burkina Faso every year makes mining a highly lucrative market, which has recently been under attack by jihadist and militant organizations looking to finance their operations in the area. Despite national attempts to deter such groups from targeting the gold sector, Burkina Faso has continued to fall victim to attacks, highlighted by the tragic deaths of over 130 people in a gold mine attack on Friday, June 4, 2021.[3] If jihadist and militant groups operating in the area are not effectively deterred from attacks on gold mines, it is very likely that such attacks will increase in Burkina Faso, and spread to or increase in neighboring countries, particularly Ghana, the Ivory Coast, Guinea, and Mauritania. Jihadist and militant operations will likely also expand in strength and influence in the region, posing a serious regional and continental threat.


Many jihadi militant groups using gold to fund terrorist activities have not been officially identified, though U.S. government officials blame the Islamic State in Greater Sahara (ISGS). The ISGS is a local branch of the Islamic State group (ISIS) and an affiliate of Al-Qaeda. It is based in Mali and Niger and operates along the Mali-Niger border while conducting attacks in Burkina Faso.[4] The jihadist activity involves military clashes, explosions, violence against civilians, and strategic developments. A 2017 attack on Nigerien and U.S. soldiers killed civilians and 4 U.S. military officials;[5] these casualties alerted the United Nations Security Council (UNSC). The growth of this terrorist group implied their spread in Burkina Faso, where they targeted the gold industry. The increasing danger they pose to regional stability and their link to well-known ISIS make these extremists a great concern for intelligence authorities worldwide.


The ease of smuggling, the profitable revenues gained through foreign purchases of gold, and the difficulty of any kind of traceability have made gold an appealing source of terrorist funding.[6] This is why Burkina Faso’s multiple gold mining centers across the entire country became a target. Growing security concerns in the country since 2015 have kept the government occupied with tackling the activity of local extremist groups; as a result, patrolling over mining centers has proven more difficult. Therefore, the almost unchallenged access to and manipulation of the gold-mining industry made it easier for ISGS to operate. Extortion through underpaid officials in the area is used to violently get control of mining sites. Once gold is obtained, it is easily exchanged because of its high intrinsic value and price in the commodity market for the purchase of weapons.


Historically, the low operating costs of gold mining relative to its output in Mali, Ghana, and Burkina Faso attracted unwanted attention and competition from foreign powers.[7] The Ghana and Mali empires, located in modern-day Mali and Burkina Faso, were known as the “Land of Gold” for their gold reserves. The livelihood of their respective peoples heavily relied on gold revenues, which fueled intense trade routes across Africa. However, over time the growth of the gold mining industry in Mali and Burkina Faso was intertwined with investments from specialized foreign mining companies. This meant that the extraction of gold became a foreign-run enterprise that deprived Mali and Burkina Faso of a critical source of economic sustenance. The subsequent impoverishment prevented these countries from developing apt technologies to carry out mining of their own, leaving them exposed to external influence. After the decolonization process in particular, terrorist groups benefited from the lack of technical knowledge and control over the industry to appropriate a profitable sector by smuggling gold outside the countries, with the most concerned one being Burkina Faso.


The smuggling of the artisanally mined gold from Burkina Faso happens due to the region’s porous borders. Terrorist organizations such as ISGS exploit the little control over cross-country borders to get commodities like gold out of the country and benefit from the higher revenues. First, gold is smuggled into the neighboring country of Togo, where gold imports face few border checks. Gold is then sold at Togo’s lower tax rates, thus creating a greater profit. Later, it is flown to the United Arab Emirates (UAE) through hand luggage on commercial flights. It is then sold at the Dubai Multi-Commodities Centre (DMCC), where it gets into the international gold flow.[8] In 2016, the UAE imported $15.1 billion USD worth of gold from Africa alone.[9] However, the amount imported in the UAE does not match the amount exported from African countries. This indicates the continued existence of fraudulent schemes which are traced back to illicit terrorist activity in Burkina Faso, specifically by ISGS. The profit made in Dubai, however, comes from the violent acts done against Burkina Faso’s civil society.


Gold is smuggled through illicit channels beginning in Burkina Faso

and reaching Dubai as a final destination[10]

Solhan, a center of the gold-mining industry in Burkina Faso, was attacked by extremists on Friday, June 4, 2021, resulting in the deaths of over 130 people.[11] As the deadliest attack in the country’s history, it highlights the danger posed to ordinary civilians working in the gold industry in the area. For Burkina Faso, the death toll indicates the large degree of violence gold’s profitability has the potential to generate. Continued gold mining in the country will likely result in continued violence, though stopping mining altogether also has repercussions. Halting the gold mining industry, or even significantly limiting it, will likely cause many artisanal miners to lose their primary source of income. Some miners may find new ways to earn an income, but others may resort to illicit activities out of desperation. Although unlikely, it is also possible that some artisanal miners may join the extremists attacking the gold mines. So far, the extremist activity that occurs throughout Burkina Faso’s gold mines has caused a disruption that has begun to uproot society through the fear, violence, and displacement that it entails.


With a total population of approximately 20 million people, Burkina Faso’s 1 million artisanal gold miners make up 5% of the country’s population.[12] Relative to the population size, a large percentage of people work in the artisanal gold mining sector, and they are at particular risk of being attacked due to the lack of protection involved in their work environment. The gold mining sector as a whole is vulnerable to consequences that impact wider society on a large scale. In the short term, gold mine attacks have led to displacement, unemployment, and increased financing of jihadist and extremist groups. In the long term, however, this trend becomes a dangerous cycle in which gold mine attacks will likely feed into a greater cycle of these factors.


Further gold mine attacks in Burkina Faso and neighboring countries are likely to contribute to a cycle of displacement, unemployment, and terrorist financing[13]


As of 2020, one of the top 10 largest gold mines in Africa is located in Burkina Faso, with an additional 6 gold mines located in the neighboring West African countries of Ghana, Mali, and Mauritania.[14] Combined with the surge in jihadist activity in the region, particularly along the border between Burkina Faso and Mali,[15] more attacks in the short term are likely. Gold is a major industry in the region, meaning that any disruption to the market will almost certainly have detrimental impacts within wider society. Ordinary citizens of Mali and Burkina Faso who work in mines, along with their families, risk losing a primary source of income. Additionally, increased funding to jihadist and militant groups increases the likelihood of violence in the region, further destabilizing national governments and putting more people at risk. Jihadist and militant groups will likely view any success in the acquisition of significant quantities of gold as an encouragement to target more gold mines. If such activity continues undeterred, a spillover effect into other African countries, especially others in the Sahel region or on the near coast is very likely. Other gold-producing countries like Ghana and Mauritania are at high risk for attack.


Though it has been difficult to attribute responsibility for some gold mine attacks in Burkina Faso, like the attack on the Bongo mine in November 2019, the country has continued to struggle with Islamist extremism violence.[16] Continued gold mine attacks in the country are likely to fund ISGS, which has been present in Burkina Faso since approximately 2018, as it has “contributed to an escalating Salafi-jihadist insurgency.”[17] Due to realities on the ground, it is likely that attacks that had previously not been attributed to a particular group had ties to ISGS or related groups. The high death tolls make this more likely, suggesting that violence was another objective of those involved. It is likely that groups did not take responsibility for such attacks out of fear of stronger repercussions by national governments.


The source of domestic insecurity, which leaves gold mines open to fraudulent activity, is the lack of diffused territorial control. As of now, on-site gold extractions receive little patrolling despite the high level of risk. Successful deterrence and compliance would likely come from the reestablishment of territorial rule of law; this would weaken the extremists’ ability to operate unchallenged and target gold-mining centers. Given the regional nature of the issue and the widespread presence of ISGS, authorities would very likely benefit from a cooperative effort in protecting the gold industry. Allies in such an attempt would mainly be Mali and Niger due to the similar exposure to this terrorist funding activity. By deploying troops both for border control and mines surveillance, these countries would likely put enough pressure to reduce on-site extortion and off-site smuggling. Border checks are imperative as their being porous allows the smuggling between countries. Because of the alarm the UNSC showed by listing ISGS as a threat associated with ISIS and Al-Qaeda, a UN operation channeled through the African Union could be an option to tackle the violent operations of the group.


Preemptive action would very likely reduce follow-up military action. The current precious commodities’ trade framework lacks a track and trace system whereby gold purchases are processed and verified. Formal procedures to identify origin and value are mandatory, but no compliance action is expected because of undue administrative processing. Establishing stricter regulatory policies and enforcing compliance from interested parties such as local sellers and foreign buyers would likely deter fraudulent schemes from being set up, and properly legalize the gold trade, which is profitable for the country’s GDP. A clear regulatory framework would likely also incentivize foreign investors to trust their money in a sector with little entry cost and big returns.


Opening the country to more closely followed international purchases would have to be done gradually and cautiously. As part of it, Burkina Faso could identify unusual patterns and irregularities by compiling a long-term client behavior analysis whereby authorities would perform background checks to look for alarming transactions or movements that would likely uncover illicit financial activity. This strategy would likely hinder the extremists’ ability to exchange gold easily and fund their terrorist operations. If and when authorities spot illicit behavior, compliance mechanisms such as off-shore asset-freezing, given the international nature of such investments, would likely prove effective in stopping any source of terrorist funding. This would require close cooperation with local policing and banking authorities.


The Counterterrorism Group (CTG) and the Illicit Finance and Economic Threats (IFET) Team will continue to examine how violence related to gold mining affects countries in the Sahel region of West Africa, particularly Burkina Faso and neighboring Mali, Ghana, and Mauritania. The IFET Team will consult with the AFRICOM and Extremism teams to determine the level of threat to various countries, respectively, while reporting any imminent threat to the proper channels. Future reports will track developments, including increased or decreased likelihood of an attack, as well as implications for any local, regional, or international entities. CTG’s Worldwide Analysis of Terrorism, Crime, and Hazards (W.A.T.C.H.) Officers and Threat Hunters will keep providing up-to-date reports about breakthroughs in the region.


________________________________________________________________________ The Counterterrorism Group (CTG)

[1]Carbon Leader Gold Ore, South Africa” by James St. John licensed under Creative Commons

[2] Gold mine production, Gold.org, June 2021, https://www.gold.org/goldhub/data/historical-mine-production

[3] Instability in the Sahel: how a jihadi gold rush is fuelling violence in Africa, Financial Times, June 2021, https://www.ft.com/content/8ff4c2ca-7ac3-4f3b-96ba-6fb74bbb60d5

[4] The Islamic State in the Greater Sahara (ISGS), European Council on Foreign Relations, May 2019, https://ecfr.eu/special/sahel_mapping/isgs

[5] The Islamic State in the Greater Sahara (ISGS), United Nations Security Council, February 2020, https://www.un.org/securitycouncil/content/islamic-state-greater-sahara-isgs

[6] Terrorist Financing in West and Central Africa, FATF, October 2016, https://www.fatf-gafi.org/media/fatf/documents/reports/Terrorist-Financing-West-Central-Africa.pdf

[7] The Gold Trade of Ancient & Medieval West Africa, World History Encyclopedia, May 2019 https://www.worldhistory.org/article/1383/the-gold-trade-of-ancient--medieval-west-africa/

[8] Gold worth millions smuggled out of Africa, Reuters, April 2019, https://www.reuters.com/investigates/special-report/gold-africa-smuggling/

[9] Ibid

[10] Instability in the Sahel: how a jihadi gold rush is fuelling violence in Africa, by Kevin Bocaj, via Google Drawings

[11] Ibid

[12] Ibid

[13] Instability in the Sahel: how a jihadi gold rush is fuelling violence in Africa, by Michelle Kaplun, via Google Drawings

[14] Top 10 largest gold mines in Africa in 2020, Kitco, April 2021, https://www.kitco.com/news/2021-04-23/RANKED-Top-10-biggest-gold-mines-in-Africa-in-2020-Kitco.html

[15] Instability in the Sahel: how a jihadi gold rush is fuelling violence in Africa, Financial Times, June 2021, https://www.ft.com/content/8ff4c2ca-7ac3-4f3b-96ba-6fb74bbb60d5

[16] Endeavour restarts gold mine in Burkina Faso, nearly a year after deadly attack, Reuters, October 2020, https://www.reuters.com/article/us-endeavour-mining-production/endeavour-restarts-gold-mine-in-burkina-faso-nearly-a-year-after-deadly-attack-idUSKBN2701KH

[17] The Islamic State in the Greater Sahara (ISGS), United Nations Security Council, February 2020, https://www.un.org/securitycouncil/content/islamic-state-greater-sahara-isgs

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