KAMPALA (Reuters) - Ugandan authorities said on Wednesday they are investigating the country’s biggest gold refinery over recent imports of an estimated 7.4 tonnes of gold, worth some $300 million.
Ugandan state-run media has reported the gold could have originated from Venezuela, which has been selling gold to prop up its struggling, sanctions-hit economy.
African Gold Refinery (AGR) said that the gold came from South America but gave no further details and rejected allegations of smuggling.
“All the required documents has been provided to them (the police)... AGR transactions are legal and documentations are 1000% legitimate,” the firm said in a statement to Reuters.
Fred Enanga, a spokesman for Uganda’s police, said intelligence reports indicated that AGR received a shipment of 3.8 tonnes on March 2, and then another shipment of 3.6 tonnes on March 4. Neither shipment passed through official customs entry points, he said.
Then, on March 7, police raided the premises of AGR after securing a court order and found the 3.6-tonne batch but the first shipment had disappeared, he said.
“Investigators have already questioned and obtained statements from officials at AGR. We are very much interested in them indicating to us where the 3.8 tonnes of gold are,” Enanga told Reuters in an interview.
“The one who is found in possession of this gold has to explain...they (AGR officials) are a subject of investigation.”
Enanga said the 3.6 tonnes that investigators found have been turned over to the central bank.
Meanwhile, investigators are seeking to establish where the gold came from, who owns it and how it was shipped into the country, he said.
Citing the commander of a Ugandan security unit that oversees the policing of the mining sector, state-run daily New Vision reported on Sunday that the gold was believed to have originated from Venezuela.
Enanga told Reuters that he could not definitively say whether it had originated from Venezuela. “It could be from Latin America or from DRC, investigations will tell us all that.”
Uganda has over the years evolved as a regional gold smuggling and trading hub, with dealers exploiting its proximity to Democratic Republic of Congo, which produces tonnes of gold but has been plagued by decades of conflict and mismanagement.
Rampant corruption, lax rules and weak enforcement mean smugglers face few hurdles as they ship or trade the lucrative metal through Uganda, analysts say.
Last year Uganda’s gold export earnings jumped 23 percent to $514 million from the preceding year, overtaking coffee for the first time as the country’s top foreign exchange earner.
The country shipped 13.2 tonnes of gold compared to 10.8 tonnes exported in 2017.
Venezuela has been selling gold abroad in a bid to provide the cash-strapped country with liquidity. In January, a senior official said that Venezuela planned to sell 15 tonnes of gold from the central bank to the United Arab Emirates in return for euros in cash.
Located in Uganda’s lakeside town of Entebbe, AGR was officially commissioned in early 2017.
The firm has however faced criticism from rights activists, including The Sentry, co-founded by actor George Clooney, who say it could be facilitating gold smuggling from conflict areas in DRC. AGR has denied the allegations.
Additional reporting by David Lewis; Editing by Elaine Hardcastle