Beyond ‘blood gold’: understanding the spectrum of illicit gold conflict

(Daniel Watson – IISS) The relationship between illicit gold and violent conflict is commanding increasing international attention and concern, amid high global demand for gold. The association of gold with conflicts in Sudan and the Sahel has led some to speak of ‘blood gold’, while Russia is reportedly recycling gold extracted from conflict-affected African states to finance its own war in Ukraine. The high value, portability and easy convertibility of gold to cash (and increasingly, to cryptocurrencies) make gold an ideal medium of transaction for actors engaged in illicit activity. This includes organised criminal groups, non-state armed groups, and state or military actors trying to circumvent anti-money-laundering requirements or bypass legitimate supply chains. These illicit gold economies can expand across borders, spreading instability and creating transnational networks that carry gold to major intermediary and destination markets. Illicit gold is gradually blended with legitimate gold as it moves through these networks. One way to make sense of conflicts linked to illicit gold is to place them on a spectrum, roughly divided into three segments or tiers, with the scale of conflict intensifying the further along the spectrum a country moves. At the lower end, conflicts tend to be relatively disorganised and localised, gradually becoming more organised as they move along the spectrum and draw in increasingly powerful actors. At the most extreme end, the power of these actors can only be maintained through the continued control of illicit gold, which becomes the foundation of a war economy that draws together rival actors and their allies. Understanding these dynamics can help anticipate which gold-producing countries are vulnerable to specific types of conflict, and under what circumstances. – Beyond ‘blood gold’: understanding the spectrum of illicit gold conflict