Why Gold Threatens Peace in South Sudan

[John Ashworth]

Why Gold Threatens Peace in South Sudan

Brian Adeba
July 22, 2026
Just Security

As South Sudan’s political crisis deepens and the risk of renewed
civil war grows, the country’s leaders are betting on gold as the next
engine of economic growth. But across the border in Sudan, gold has
become a financial lifeline for a devastating war instead. Control
over mines and over smuggling networks bankrolls armed actors and
enriches regional profiteers, perpetuating the world’s worst
humanitarian crisis. Gold is helping fuel the conflict.

South Sudan now risks following a similar path. The country’s efforts
to commercialize gold production by opening new gold refineries and
gold-backed infrastructure deals could generate much-needed revenue.
But there are critical variables to consider: armed groups control
mining areas, oversight is weak, and the sector is dominated by
politically connected elites. Without robust safeguards, corruption,
money laundering, and conflict will increase, turning gold into the
latest fuel for a growing war economy.

Gold is found in five of South Sudan’s 10 states, but mining is
dominated by artisanal and small-scale miners, resulting in limited
data about the volume of gold produced. Calculations using United
Nations trade data show that, between 2019 and 2023, only 4 tons of
gold was mined, most of which was sent to the United Arab Emirates.
But given significant smuggling to Kenya and Uganda, these numbers are
likely underreported.

Recently, the Ministry of Mining approved gold refineries in the
country for the first time, permitting two facilities — one operated
by an Egyptian firm and the other by local investors. The refineries,
if operational, could change the game for the country’s gold industry,
moving the sector to commercialization. The government is also
pursuing projects using gold as collateral, recently announcing a $2
billion road infrastructure deal with a South African company, backed
by gold. Given the many issues with illicit gold in South Sudan,
however, the new refineries and deals present very high risks for
money laundering and conflict gold flows.

These ventures are occurring in a weak regulatory environment. The
U.N. Commission on Human Rights in South Sudan, for example, reported
in September 2025 that oversight institutions — such as the
Anti-Corruption Commission, the National Audit Chamber, the judiciary,
and the legislature — do not function effectively, at least in part
because, to varying degrees, they lack the funding, independence, or
political support they need. According to the Global Initiative
Against Transnational Organized Crime, mining companies often are even
co-owned by senior government officials who ignore
conflict-of-interest regulations, leading to corruption, impunity, and
ongoing disputes. These high-ranking officials frequently use their
power to undercut laws and secure concessions in return for stakes in
mining ventures.

The Links to Violence

While South Sudan desperately needs foreign currency, and gold could
possibly provide the necessary funds, expanding gold production
without robust accountability and regulatory reforms is likely to
intensify existing corruption and tensions. The risk of violence is
particularly high between large corporations and small-scale artisanal
miners, who often lack protection under the law and face displacement
from their livelihoods by companies connected to political elites.
Rapid expansion of the gold mining sector also threatens to exacerbate
environmental degradation, as violations are likely to increase in the
absence of effective oversight.

Even more concerning is the fact that the gold trade is inextricably
linked to conflict. Many of the country’s mining sites are controlled
by rebel groups, including armed local communities, the national army,
the National Security Service, and rebel groups of the Sudan People’s
Liberation Movement-Army in Opposition (SPLM/A-IO), and the National
Salvation Front. Formalizing and expanding mining operations in these
contested areas could spark further armed clashes and undermine
prospects for peace in South Sudan. Conflict-linked gold from Sudan is
also being funneled through South Sudan via the political networks
that dominate the sector, the New York Times wrote recently, drawing
the country into regional conflict.

This illicit flow of Sudanese gold deepens instability on both sides
of the border. Against this backdrop, the United States is working to
pursue a peace deal in Sudan with Egypt, Saudi Arabia, and the UAE, a
grouping known as “the Quad,” although the trail has gone cold
recently. If profits from conflict gold keep weapons in the hands of
armed groups, these peace efforts will be at risk, prolonging the
region’s cycle of violence that has reached the level of atrocities,
including crimes against humanity.

More broadly, an unstable South Sudan presents the risk of regional
contagion. Renewed conflict, such as an escalation earlier this year
that forced 280,000 people from their homes, may erupt again as the
country’s elections approach in December. That may trigger further
refugee flows, illicit arms trafficking, and economic disruption
across neighboring countries such as Ethiopia, Uganda, and Kenya,
important U.S allies in an already fragile region.

South Sudan also sits within a wider geopolitical contest in East
Africa and the Horn of Africa regions. The war in Sudan has already
drawn in regional powers Egypt and Ethiopia. Furthermore, the
involvement of Islamist factions, Russian mercenaries, the UAE, and
overall expanding Chinese and Iranian influence in the wider Red Sea
and Horn of Africa region are issues that affect U.S. interests. If
South Sudan deteriorates further, that crisis could spread, rather
than remain contained.

Thus, Washington has a strategic interest in keeping South Sudan and
its neighbors stable. U.S engagement — via diplomacy or financial and
economic pressure if needed – also would give Washington leverage over
South Sudan’s leaders to respect peace deals, good governance, and
democracy. Past U.S. pressure, including sanctions in 2018, helped
push the belligerent parties in the country’s war toward a peace
settlement. Sustained U.S. involvement can therefore support both
conflict prevention and governance reforms, reducing the risk that
South Sudan becomes another front in a broader regional crisis.

What the U.S. and Its Allies Could Do

The United States, especially if it can work with other international
allies of South Sudan such as the U.K. and the European Union, should
focus on three steps.

First, the United States should create a high-level, interagency task
force on illicit gold, spearheaded by Secretary of State Marco Rubio
in close coordination with Treasury Secretary Scott Bessent. As a U.S.
senator, Rubio described the illegal gold trade as a “direct threat”
to U.S. national security and urged the first Trump administration to
take action against it. Today, that threat is growing on an
unprecedented scale and demands attention. Coordinating such U.S.
government efforts with industry bodies, financial institutions, and
regional and international organizations holds the greatest chance of
generating impact.

The task force could coordinate and press for increases in U.S.
resources to track, investigate, and sanction both corrupt officials
and criminal organizations behind the illicit gold trade across the
globe. It should also support the legitimate artisanal mining sector
and foster greater collaboration with the private sector, ensuring
real-time intelligence sharing on bad actors and reinforcing the
integrity of the global gold market. The U.S. Treasury Department’s
Financial Crimes Enforcement Network (FinCEN) could play a leading
role in issuing alerts, facilitating information exchange with banks
and refiners regarding tracking methods, and urging the submission of
reports by trading entities concerning suspicious transactions. This
would build on actions by the United Kingdom, which recently
established a public-private partnership on illicit gold.

Second, it is imperative to establish consequences for illicit gold
networks. Sanctions that are fully enforced are one critical step,
such as those imposed by the U.K. and the United States that have
already targeted a handful of UAE-based firms, and U.S. and EU
restrictions on a Rwandan gold refinery. But these actions must be
broader and more closely coordinated. The U.S. and U.K. have sought
closer ties in recent months with the UAE because of the Iran war, but
smaller-scale sanctions specifically targeting certain criminal
networks should still be possible.

Third, it is time for a consolidated, effective international process
to monitor and validate international gold trading hubs, as illicit
gold from South Sudan — as well as from Sudan, the Democratic Republic
of the Congo, and other countries — is almost exclusively smuggled to
the UAE. This process, which should involve the 12 major gold refining
hubs from the UAE to India to Singapore, should standardize gold
import verification procedures, publish significantly improved gold
trade and production data, and evaluate whether key gold bullion
trading centers are doing effective checks to combat illicit gold. The
gold industry body London Bullion Market Association recently
initiated a dialogue with these gold refining centers, and the UK and
other key governments should collaborate with industry and civil
society to produce outcomes that would change the game for conflict
gold traffickers and refiners.

At the regional level, South Sudan should conduct multi-stakeholder
mine inspections, consistent with the International Conference of the
Great Lakes Region regional minerals certification process, to
independently certify gold mines as conflict-free prior to the export
of gold. This would require amending South Sudan’s Mining Act to
legally incorporate internationally recognized due diligence
procedures, including those established by the Organisation for
Economic Co-operation and Development (OECD). It would also require
validating mine sites through joint committees comprising government,
civil society, local communities, and industry representatives to
ensure they do not finance armed groups, while establishing clear
chain-of-custody procedures and independent third-party audits.

With responsible management, both private and governmental, of
valuable resources such as gold, real peace – and even economic
prosperity – could be possible in South Sudan. But that will happen
only through concerted policy initiatives involving coordinated
actions.

https://www.justsecurity.org/146977/gold-threatens-peace-south-sudan/

END
______________________
John Ashworth

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+254 725 926 297 (Kenya mobile, WhatsApp and Signal)

PO Box 403 - 00206, Kiserian, Kenya