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The Rise in Gold Prices Finances Conflicts and Destabilizes the Economy in Africa, Turning the Precious Metal into “Blood Gold”.
The record-high gold prices observed in 2025 are driving not only the global economy but also fueling dangerous conflicts in Africa, particularly in the Sahel region.
In a scenario of global uncertainties, marked by rising protectionism in the United States and various international conflicts, gold has solidified as a stable asset for investors.
However, few know the origins of this metal and the social and political impacts of its extraction in certain regions, particularly in Africa.
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The Sahel region, comprised of Mali, Burkina Faso, and Niger, stands out as one of the largest producers of gold on the continent. Together, these three countries produce around 230 tons of gold per year, an estimated volume of approximately US$ 15 billion.
This number, however, is likely underestimated due to the large amount of artisanal and small-scale mining without records. The combined production of these countries surpasses that of any other country in Africa, making the Sahel a vital supplier for the global market.
Gold and Geopolitics: Russia’s Rise in the African Economy
While the governments of the Sahel claim that the income from this market benefits their citizens by promoting national “sovereignty,” the reality on the ground is complex.
Russian companies are significantly expanding their share in the gold sector in Africa, often to the detriment of Western companies.
In Mali, for example, the leader of the military junta, General Assimi Goïta, laid the foundation stone for a gold refinery with minority participation from the Russian conglomerate Yadran Group. This initiative promises the creation of 500 direct jobs and 2,000 indirect jobs.
Similarly, Burkina Faso is building its first gold refinery, requiring foreign companies to give the state a 15% stake in local operations, as well as transfer knowledge.
Media campaigns, including those generated by artificial intelligence, have been used to exalt figures such as Captain Ibrahim Traoré of Burkina Faso for securing this source of income for the nation.
The Price of Conflict: Gold as a Means of Exchange in War
The urgent need to finance campaigns against insurgents is a crucial factor behind the intense search for gold in these countries.
In Mali, much of these resources have been directed to Russian mercenaries, such as the Wagner Group and its successor, Africa Corps, under the command of the Russian Defense Minister. Africa Corps is even involved in military training in Burkina Faso, although the local government officially denies its presence.
Despite the lack of transparency in public spending in these countries, it is believed that a significant portion of their budgets is dedicated to national security.
Military spending in Mali, for instance, has tripled since 2010, accounting for 22% of the national budget in 2020. Local governments face jihadist groups linked to al-Qaeda and the Islamic State.
However, Human Rights Watch (HRW) accuses the Malian government and the Wagner Group of committing atrocities against civilians, including killings and torture. HRW has also documented similar violations committed by the Burkina Faso army and its allied militias.
The Flow of “Blood Gold” and Its Hidden Beneficiaries
In exchange for their services, the Wagner Group and Africa Corps often receive payments in gold or mining concessions, according to Alex Vines from the think tank Chatham House.
He states that “very little [of the gold revenues] reaches the citizens of Mali and Burkina Faso.” Alarmingly, the armed insurgents themselves may be benefiting from gold.
Since the military coup in Mali in 2021, the use of brutal tactics against communities suspected of supporting jihadists has increased, leading more civilians to join the very groups being fought.
The Jamaat Nusrat al-Islam wal-Muslimin (JNIM), an al-Qaeda affiliate, has intensified its attacks on the Burkinabe army in the first half of 2025, signaling a concerning strengthening.
Much of the gold extracted in the Sahel comes from the artisanal and small-scale sector, often informal and unlicensed, operating in locations far from government oversight. Armed groups, including jihadists, and the governments of the Sahel compete for control of these small mines.
The metal provides an important source of income for militant groups, which appear to be expanding their territorial influence in Mali and Burkina Faso.
The United Nations Office on Drugs and Crime (UNODC) believes that most of the gold extracted informally in the Sahel ends up in the United Arab Emirates, a global center for gold refining and trade.
The Challenge of Tracking and the Lack of Ethical Standards for Gold
The global peak in gold prices may prolong and exacerbate the conflicts in the Sahel. However, the earnings of artisanal mine workers have not increased proportionally to global prices.
The intervention of human rights groups and the UN led to the creation of the Kimberley Process Certification Scheme in 2003, which has helped combat the trade in blood diamonds.
However, efforts to combat blood gold have been less successful, partly due to the lack of unified ethical standards.
Tracking technology also presents a significant hurdle. The gold is melted early in the value chain, making it nearly impossible to trace back to potential conflict zones.
At the moment, the importance of gold to the governments of the Sahel and the irregular enforcement of ethical standards mean that the commodity will continue to change hands, regardless of its origin. For some communities in the Sahel, this may mean the continuation of trade with blood gold.
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