Slowly, slowly western companies are returning to Sudan. The last to show up is an Australian gold miner, who joined hands with a Canadian counterpart to venture into gold mining business in Sudan.
Resolute Mining of Australia entered into a deal to buy out 15 percent of the Canadian firm Orca Gold Inc. “This strategic investment by Resolute demonstrates and supports rapidly growing international mining interest in Sudan,” said Orca in a statement. It added that the deal makes the company well-funded to deliver a feasibility study on its Block-14 gold project that extends over 2, 170 sq. km licence in northern Sudan, some 900 km north of Khartoum and bordering Egypt.
The significance of this development is that it brings two companies from an advanced environment with track record in the mining business. Gold after all became the most important source of hard currency earning for Sudan following the loss of the bulk of oil reserves and production after South Sudan separation in 2011.
Moreover, the gold mining which started with providing job opportunities for hundreds of thousands engaged in conventional and individual activities is entering into a more regulated phase. Though available first quarter figures show a drop in gold earnings to $212 million from $397 million earned during the same period of last year, but still Sudan hopes to top the list of gold exporters in Africa and companies like Orca Gold can make a difference and help push towards that goal.
But more significant is that this deal signals to a growing trend where western companies, shunning Sudan for long due to political pressures, are opening a new page and started coming back again to the country that has been associated for long with civil wars, human rights violations and terrorism.
A case that comes to mind is that of the Canadian oil company Talisman, who came to prospect for oil in Sudan with the Chinese and Malaysians in the late 1990s. Though it was one of the most successful projects Talisman got into, but because of bad publicity that coincided with intensive civil war at the time, Talisman was forced, in effect, to sell its shares to Indian firm ONG. The pressures took a serious turn when it targeted western companies through divestment campaign that led to a number of western companies deserting their Sudan businesses for fear of negative impact on their image and eventually their shares and market value.
These anti campaign moves are well rooted into the concept of sanctions and boycotts as a way to penalize the regime and force it to change its behavior, or toppling it eventually.
However, it proved that such an approach may ring well into the ears of audiences back home that something is being done, but in effect it adds to the misery to the people it was supposed to be helping.
Gradually such approach is being replaced by a more pragmatic one: constructive engagement, where building on mutual interests to improve the lives of people may have far reaching impact. Interesting enough one of the first western companies to show up is the German conglomerate Siemens, who dropped its involvement in Sudan following the divestment campaign and imposition of US sanctions on Khartoum. There is also US firm General Electric, who started to use exemptions from sanctions to re-enter the Sudanese market. Even Baker&Hughes, the US oil service company is entering into arrangements with subsidiaries of the national oil company, Sudapet to provide much needed American equipment for the oil and gas industry. All making use of easing of US sanctions.
That brings into discussion the bigger picture of the politico, economic environment of the country. Though Sudan is currently enjoying a longer period of ceasefire with rebels, but it has not achieved a formal one yet.
More important that unilateral ceasefire have not been followed by a political action plan addressing the root causes of the civil conflict that led to resorting to arms in the first place. And along these lines there is a need to embark on a serious effort for reform, transparency, good management and planning in the economic fields. It was interesting here to note that the European Union ambassador to Sudan Jean-Michel Dumond offered the EU’s willingness to provide technical support to Sudan in areas of financial reform and expansion of tax umbrella; that is another sign of constructive approach in play.
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