The Russian presence in the African mining sector is based not only on companies driven by economic profitability, but also on companies linked to the Wagner paramilitary group, which serve to promote Moscow's geopolitical influence and reduce the effects of Western sanctions.

Beyond its purely economic objectives, Russia's growing involvement in the mining sector in Africa constitutes an important instrument of geopolitical influence and a means for Moscow to avoid Western economic and financial sanctions, according to the French Institute of International Relations (IFRI). ) in a report published on April 7.

Titled “Russian mining strategy: geopolitical ambitions and industrial challenges”, the report highlights that the presence of Russian mining companies on the continent is based, on the one hand, on experience and control of the value chain in certain sectors, and on the other, in security and military assistance. These two dimensions obey different logics.

The first logic is economic. It aims to exploit minerals and metals in which Russian mining groups are present and recognized in this sector. This is the case, in particular, of the diamond company Alrosa (Angola, Zimbabwe and the Democratic Republic of the Congo) and the Rusal company (Guinea), which respectively dominate the diamond and bauxite sectors. Although they may indirectly serve Moscow's interests on the continent, the objective of these established mining players is above all economic.

The second logic concerns Moscow's geopolitical interests in Africa. In this sense, the exploitation of mineral deposits is a means rather than an end. In this context, the Wagner group, led by Yevgeny Prigozhin, a Russian oligarch close to President Vladimir Putin, is far from being a free agent fighting according to its own interests. This private military company largely exchanges its support for rebel regimes in exchange for lucrative mining contracts, to accumulate profits and promote Russian influence on the continent.

In the Central African Republic, the intertwining of Wagner's activities with the mining companies Finans M (Russia) and Lobaye Invest (Central African Republic), supposedly controlled by Yevgeny Prigozhin, reveals the nature of these links, far from the economic logic that traditionally operates in the mining industry. In 2018, licenses to exploit diamond and gold deposits were granted to a Russian company allegedly close to the founder of Wagner. To reinforce this dominance, the mercenary group has even undertaken to modify the local mining code to establish a monopoly on these two precious minerals in the country.

Minerals as an alternative to the traditional financial circuit

In 2017, companies linked to the Wagner galaxy also obtained important mining concessions for gold and diamond deposits in Sudan.

The report also notes that these companies linked to the paramilitary group are proving useful in offsetting the effects of the economic and financial sanctions imposed on Moscow since the start of the war in Ukraine. The exploitation of African mineral resources is a way to circumvent the sanctions regime, in particular the isolation of Russia from the international banking system. As an alternative to the traditional financial circuit, precious minerals such as gold and diamonds are useful for avoiding banking sanctions, as they can be sold and traded without control or restrictions.

Sudan, one of the world's leading gold producers, would be a strategic supplier for Russia, which already has gold reserves equivalent to $130 billion. These continue to be an important shield to mitigate the economic consequences of the war in Ukraine.

The IFRI points out in this context that the Russian mining industry has not been a direct target of the successive waves of sanctions imposed by Western countries on Moscow since the annexation of Crimea in 2014. For Western powers, it is difficult to target a sector that is highly integrated into the value chains of many economic segments (aeronautics, automotive, communications, energy, etc.). Russia is one of the main suppliers of many minerals and metals (aluminum, titanium, palladium, nickel) and therefore has influence on the market for these raw materials.

It is so intertwined with the world economy that the London Metal Exchange (LME) has finally decided not to ban the trading and storage of metals from Russia in its system. The European Union (EU), for its part, withdrew sanctions against the diamond giant Alrosa at the last minute due to pressure from Belgium. The fact that Antwerp remains the world's largest diamond trading center is probably no coincidence.

Source: EcomNewsAfrique