20100906
reuters

KHARTOUM (Reuters) - Sudan plans to more than double its gold output in two years partly to help make up for a possible fall in oil revenues if its crude-producing south chooses to secede in a looming referendum, the minerals minister said on Monday.

Abdel Baqi al-Jailani told Reuters in an interview Sudan could raise annual production to more than 40 tonnes by 2012 by regulating tens of thousands of small-scale prospectors, many of whom currently smuggle out finds, and by licensing out new blocks to global mining firms.

His estimate of current annual production at around 20 tonnes -- far above some industry estimates of between 4 and 6 tonnes a year -- included new data he said showed small "artisanal" mining operations already registered with the government produced 10 tonnes of gold between January and June this year.

Sudan has been known as a source of gold since the time of the Pharaohs and its ancient Nubian kingdom. Jailani said large reserves had lain unexploited in modern times because the country had been too focused on marketing its agricultural and oil prospects.

"Historically speaking we know that Sudan is rich. But the reason we are so late to invest in this sector is that we had other easier options."

He added Khartoum now needed to diversify its economy in the build up to a referendum, due on January 9, 2011, on whether south Sudan, the source of most of the state's oil reserves, should split off as an independent country.

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"Frankly ... we don't know if Sudan is going to be split or united. If the south does secede -- you know 60 percent of our budget comes from petrol -- we have to sit and think of another alternative," said Jailani.