In Bamako, the question is nagging: how was the ruling junta, financially strangled for six months by sanctions from the Economic Community of West African States (ECOWAS), able to find the funds – 10 million dollars (9.1 million euros) per month, according to American intelligence – to pay the Russian private security group Wagner, present in the country since December 2021?
The Blood Gold Report, an international consortium of researchers investigating the links between Wagner, African authoritarian regimes and mining companies, details an unprecedented financing model for the 1,500 to 2,500 mercenary men currently deployed in Mali. Their report, entitled “How the Kremlin uses Wagner to launder billions of African gold”, published on December 12, underlines that in Bamako the putschists relied on taxes, mainly collected from Western companies extracting gold from the Malian subsoil, to pay them. A model of financing through the formal economy which stands out, compared to the system of mining predation from which Russian paramilitaries benefited in the Central African Republic and Sudan, with the complicity of local authorities.
“Rather than paying the mercenary group with preferential access to mining sites, the junta pays Wagner $10 million per month in cash, or more than $200 million between December 2021 and June 2023,” specifies The Blood Gold Report. Due to the tax levies to which they were subject, Western mining companies active in Mali thus became the main indirect contributors to the salaries paid by the junta to Wagner.
“No subterfuge”
“The four largest gold mining companies in Mali (Australian Resolute Mining and Canadian Barrick Gold Corporation, B2Gold and Allied Gold Corporation) have paid approximately $588 million in taxes and royalties to the state controlled by the junta in 2022″, underlines the consortium. For political analyst Jessica Berlin, one of the authors of the report, this money therefore “indirectly paid Wagner’s salaries because the Malian state, which pays these mercenaries, is essentially financed by these taxes collected from Western mining companies. The latter know that they are paying money to a State which pays a group responsible for multiple human rights violations. They are therefore accomplices.” Of the four companies contacted by The worldonly Barrick Gold Corporation and Resolute Mining responded by email, emphasizing that they have no relationship or activity with Wagner.
More than half of the tax revenue collected by the military regime of Mali, the continent’s third largest gold producer, comes from the four mining giants. Thanks to the increase in the price of gold (nearly 6% in 2022) and the quantities produced by the country (from 65.2 tonnes in 2020 to 67.7 tonnes in 2023), mining taxes are constantly increasing since the coup d’état of August 2020: 1,042 billion CFA francs (1.6 billion euros) were collected in 2023 compared to 895 billion CFA francs in 2020, according to the general tax directorate. The reform of the Mining Code, adopted in August, which increases the share of the Malian State from 20% to 30% in the capital of gold companies should further help to fill public coffers.
At a time when the Russian Ministry of Defense is trying to take over Wagner’s operations under the new Africa Corps label since the disappearance of the group’s founder Evgueni Prigojine in August, the Malian model of paying mercenaries formalizes the relationship with Moscow. “Unlike Wagner’s operations in the Central African Republic and Sudan, there is no need [au Mali] to resort to subterfuge and smuggling operations to get gold out of the country or convert it into cash,” notes the consortium.
At the end of 2021, the junta and its Russian partner initially attempted to replicate the model of predation developed in these two countries. Several diplomatic and security sources had reported the presence of Russian geologists in Mali, prospecting for gold mines, while Wagner’s fighters began their deployment. In vain. Under pressure from the economic embargo imposed by ECOWAS at the beginning of 2022, the junta found itself in April unable to pay all the mercenaries, deployed mainly in the center and the north to fight against jihadist groups alongside of the Army. In June, some of them even went on strike.
A boon for Russia
A year and a half later, the junta appears to have resolved its financial problem and the partnership with Moscow has never been more fruitful for both sides. In mid-November, the ruling military obtained the symbolic victory they were seeking when Wagner and then Malian soldiers successively planted their flag in Kidal, the stronghold of mainly Tuareg rebels. Defeated, the latter now fear, as the framework of an armed group slips, that when their enemies “have completed the phase of the war, their objective will be to capture the mineral resources of the region”.
If Russia is not currently operating any mines in Mali, it seems to be preparing its offensive in the sector. Returning from Moscow at the end of October, the Malian Minister of Mines, Alousséni Sanou, announced the signing of several agreements with Russian companies “ to begin the exploitation of certain minerals. The arrival of Russian experts responsible for “work on the mining map” was then announced “within one month”, such as the construction, at an undetermined date, of a refinery with a capacity of 200 tonnes in Bamako, in partnership with the Kremlin.
If this project were to see the light of day, Malians and Russians could transform the gold extracted from the country into ingots. According to Jessica Berlin, this refinery – like the one controlled by Wagner in Sudan – would also allow Moscow “ to increase its income from gold production and strengthen its influence on the sector in Mali ». A boon for Russia, the world’s second largest producer of gold, but whose ore is the subject of an embargo imposed since June 2022 by the United States, Japan, the United Kingdom and the European Union in the context of the war in Ukraine.