Golden opportunity: South Sudan seeks fortune in mining. - Al-Arabiya

Ravaged by decades of civil war and neglect, South Sudan is one of the poorest countries on the planet but under the red earth, officials believe, it could potentially be one of the richest.

Since the end of the civil war in 2005, Toposa tribesmen and women around Kapoeta have increasingly been sifting through the panning the rivers, breaking rocks and sifting through soil, seeking their fortune in gold.

Gold fever has swept through Eastern Equatoria state.

“The gold mining has completely changed my life. In the village I could not even earn one South Sudanese Pound per day but now I earn 200 SSP per day,” says Julia Lakalay as she scoops soil out of a hole.

For these miners in South Sudan, a country in which just one quarter of people can read and life expectancy is just 50 years, life-changing finds are almost commonplace.

Some miners claim to have found 200g nuggets worth over 10,000 U.S. dollars on the international market. Because the mining sites are so rural, the miners invest their savings in the local banking system - cattle.

Leer Likaum says he has bought ten cows this year, each worth over 200 US dollars.

“I prefer staying here because in the village there is hunger. The money I make here is providing food for people in the village. This is why I stay here,” says miner Leer Likuam.
Sadly for South Sudan, the revenues from this trade are un-taxed.

Traders explain how the gold is smuggled out of the country and sold in neighboring countries like Kenya or Uganda.

The local price for gold is inflated because of high demand from merchants who use the precious metal as a way of exporting profits without taking local currency out of the country.

“There might be people who can take people out of this country, because there are foreigners in the country who are buying the gold and it is possible for them to take gold out of the country so I believe there are people going out with the gold,” said Apiu Anyar.

When South Sudan gained independence 15 months ago it inherited oil fields pumping 350,000 barrels per day.

But, a row with Khartoum over pipeline and processing fees forced the South to shut down production in January, severing the government's financial arteries and throwing the economy into crisis.

Now the government is looking to diversify its income by signing a new mining law that will draw large-scale investment to the largely unexplored land they dub “virgin territory.”

Officials list potential deposits of gold, diamonds, chromite, copper, uranium, manganese and a belt of iron ore.

They say mining companies are lining up, eager for the new law to pass and open the door for investment.

“First of all it will diversify the economy. By depending on oil alone now, mining sector has great potential and we are believed to have more reserves in mineral resources, that one will resolve the problem of dependency on one source. Number two, it will also bring more investment to South Sudan. It will also boost the local economy,” says Stephen Dhiu Dau, minister of petroleum and mining.

Officials and investors agree that the world’s youngest nation has great potential in the minerals sector, but warn that it will take several years for any potential concessions to produce commercial quantities of gold or other materials.