UAE-backed Chinese company acquires stake in Ethiopian gold mine near Sudan war zone

Last week, after protracted negotiations and various plot twists, Canadian mining company Allied Gold sold a minority stake in its assets to China’s Zijin Gold International.

“With the completion of the strategic investment, Zijin Gold holds approximately 9.2 percent of the issued and outstanding common shares of the company,” Allied Gold announced in a statement.

This is the latest, most significant development in a saga that involves investment from the United Arab Emirates, nearby Ethiopian army bases supporting Sudan’s Rapid Support Forces (RSF), and a large stretch of Ethiopian land on the Sudanese border that could now be mined extensively for gold.

The agreement, which is worth just under $300m, grants Zijin, a private company with at least three Chinese state-owned corporations among its leading shareholders, partial ownership of a portfolio that includes mining sites in Mali, Cote d’Ivoire and the Kurmuk concession in western Ethiopia.

The Kurmuk site is in Ethiopia’s Benishangul-Gumuz region, which hosts at least one army base used by the paramilitary RSF, which is supplied by the UAE, currently also the main buyer of Ethiopian gold.

The site is about 20km from the Sudanese locality of the same name, where on Monday last week mass graves believed to contain the bodies of people killed by the RSF were discovered on the same day the deal was announced.

The region, which has a recent history of civilian displacement and conflict, is known for informal, semi-illegal and semi-mechanised mining operations, including in the area marked out for exploration by Allied Gold.

Publicly, the Canadian company is bullish about the Ethiopian site, saying it expects to start operations in August and to produce between 240,000 and 270,000 gold ounces in 2027, a figure that would amount to a value of around $1bn.

UAE and Chinese investment in Ethiopia

The deal ends a year-long saga that has involved two failed acquisition attempts, first by an Emirati company last year, then by Zijin itself. Zijin had initially agreed this year to acquire Allied Gold in its entirety for around $4bn until the deal collapsed because it didn’t obtain Chinese regulatory approval.

With the full buyout scrapped, the parties proceeded with the partial investment instead.

The completed agreement will bring a joint Chinese-Emirati footprint to Ethiopia’s mining sector, as the Abu Dhabi Investment Authority (ADIA), the UAE’s sovereign wealth fund, has been a major shareholder of Zijin Mining, the parent company of Zijin Gold International, since 2022.

There was also a significant financial interest from the UAE in Allied Gold.

In February 2025, the Canadian company announced that it had inked a half-billion-dollar deal giving a 50 percent stake in its mining assets to Ambrosia, a little-known Emirati company headed by prominent Emirati businessman Ahmed Amer al-Amry, who runs the Abu Dhabi-based Al Amry Group.

Months later, Allied Gold announced that the Ambrosia deal had fallen apart, citing unmet conditions and a surge in the valuation of gold.

In January, Zijin and Allied Gold jointly announced their intention to arrange the buyout of the Canadian company but that deal was eventually scuppered.

Months after that announcement, first-quarter reports revealed that the ADIA had poured some $680m into Zijin Mining, listing the UAE’s sovereign wealth fund among Zijin’s top ten shareholders.

There could be subsequent deals, as Allied Gold CEO Peter Marrone has indicated a willingness to sell more of his company to more than one buyer if an offer meets his evaluation.

For now, Allied Gold’s immediate plans for the company is to use the proceeds of the transaction to expand operations at all three of the company’s mining sites, including “operational optimizations, the completion and ramp-up of Kurmuk”.

Middle East Eye asked Allied Gold if it was in a position to ensure that its new partners would not try to exploit the Kurmuk mine's gold to support militant groups in Sudan but received no response on the record.

Ethiopia's mines minister has welcomed "expanding investments in gold, critical minerals, petroleum and fertiliser production".

Zijin Gold did not respond to Middle East Eye's questions. Both the UAE and Ethiopia deny involvement in the Sudan war.

Proximity to Sudan war

With the proximity of the Kurmuk mine to both a major Ethiopian-RSF logistics hub in the Ethiopian city of Asosa and to the war front in Sudan’s Blue Nile State, the new mining acquisition involving investors affiliated with RSF-allied governments could prove a strategic coup for the RSF.

Ethiopia’s Benishangul-Gumuz region is a security-sensitive region. The regional capital of Asosa is, as MEE revealed earlier this year, home to a major logistics hub used by the UAE and Ethiopia to train and arm fighters from the RSF, which has been at war with the Sudanese Armed Forces since April 2023. The site is also about 100km away from Ethiopia’s Grand Renaissance Dam on the Nile river.

It’s unclear what impact mining activity involving investors affiliated with the governments of the UAE and China could have on war-torn Sudan, where three long years of conflict have displaced millions and created what UN officials have described as the world’s worst humanitarian crisis.

Both countries stand accused of fuelling the bloodshed and facilitating the transfer of weapons to the RSF, which has carried out a catalogue of gruesome atrocities, including sexual violence and civilian massacres that UN investigators say amount to a genocide.

The UAE in particular has used illicit gold mining to bolster its support for the RSF, which has its own gold trading company, al-Junaid. The group has accumulated considerable wealth by smuggling gold from areas of Sudan under its control into Dubai.

Human rights researchers and diplomatic sources have long identified the UAE as a major hub of Sudanese conflict gold.

“For gold, in most of these processes – whether it is RSF or SAF territory - the final destination of the gold is still the UAE, especially the gold market in Dubai. It goes through many brokers and mediators,” one Sudanese gold trader, who also runs a small mine, told MEE.

“The production of gold in Sudan is dominated – up to 85 or 90 percent – by artisanal miners,” Suliman Baldo, a Sudanese expert on the gold trade, told MEE.

“Therefore the gold is bought by traders and the export and smuggling of gold is mostly done by private individuals,” he said. “These individuals are wholesale traders who are able to buy the gold from the artisanal miners and smuggle it to the United Arab Emirates.”

China officially maintains a policy of neutrality in Sudan’s civil war, but has done nothing to stop the UAE from transferring sophisticated Chinese armaments, including howitzers, heavy machine guns and armed drones, to the RSF. This is despite the UN’s continuous renewals of Sudan-wide arms embargoes, and demands by the Sudanese government that Beijing take action to curb the flow of its weapons into Sudan.

Canadian mining companies also have a controversial history of chasing mining interests amid conflict in East Africa, including during Ethiopia’s deadly Tigray war, which killed hundreds of thousands from 2020-2022.