Iraq, like many Middle Eastern countries, is popularly known for its massive reserves of oil. It is estimated that the country has over 140 billion barrels of oil reserves and ten years ago, it was the fifth largest exporter of oil globally.
But with years of political instability and falling oil prices, Iraq is looking elsewhere to earn foreign exchange and gold seems to be an ideal bet. Gold mining in Iraq in fact has a very interesting ancient history. In this post, we focus more on the local gold industry, including its past and its future.
Brief Background of Iraq
Iraq is probably one of the few countries in the world that doesn’t require an introduction. It has been in the news cycle for years, and not for good reasons. It is a predominately Muslim country with a population of 38 million people.
Although in the past two decade Iraq has been plagued by wars, the threat of terrorism, and religious and political instability, it remains a significant economic hub in the Middle East. According to data from the World Economic Outlook, the country’s GDP in 2019 topped $250 billion.
Gold Mining Iraq
It’s only recently that Iraq has come to the forefront of gold mining in the world. But the country has a very rich history in this sector. Gold mining activities in the country trace back to 4000 BC during the Sumerian civilization.
There is in fact archeological artifacts that have been discovered in the country, some of which are made from pure gold. It is believed that ancient Sumerians, who occupied the territory of Iraq thousands of years ago, would use these gold artifacts to appease terrestrial beings that according to them, would descend down to earth and help them mine.
There is very little historical evidence to show us the sources of gold during these ancient times. However, ancient Sumerian texts show that most of the gold came from the mythological land of Aratta, the sour Su Land in western Iraq, Meluhha, Delmun, and others.
Recent Gold Discoveries in Iraq
Despite its ancient gold mining history, modern prospecting for Gold in Iraq started in the 1930s. However, early prospectors did not find much evidence of gold deposits. The valuable oil reserved dwarfed anything else that may have been of any interest in Iraq, and the efforts were shelved until 1984 when they began once again.
This came after geologists who were prospecting for Iron deposits in Western Iraq accidently discovered large chunks of gold deposits. In 1986, a formal prospecting team was formed. It collected soil samples from the Gaara Depression and upon further analysis it was deemed that the gold deposits found there were not commercially viable.
Despite this, another team came back at the Gaara Depression. This time round, the team concluded that the gold deposits in the area could be mined commercially. But there have been more and more recent gold discoveries in the country.
For example, there is documented evidence that shows massive gold deposits east of the capital Baghdad. Gold deposits have also been found in the western dessert and some parts of Kurdistan. We also know that Iraq has already commenced mining operations of gold in Aldajh although we do not have data on the amount mined so far.
Iraq’s Gold Exploration Plan
In light of recent gold discoveries in the country, Iraq recognizes the economic potential exploration could have on its economy. As a result, the government has put in place a thirty year plan that involves further exploration and exploitation of gold reserves across the country.
But this fragile country faces monumental challenges in its efforts to become a major gold producer in the region. First, although Iraq currently enjoys relative peace, the government in Bagdad still remains weak and vulnerable to incursions by radical Islamist groups.
Additionally, the flow of foreign investment into Iraq remains very low. It would take massive incentives for foreign companies to put serious amounts of money in the local gold industry. Iraq is also coming out for years of over relying on oil exports to prop up its economy. There is very little technical knowledge on the gold trade.
The local banking industry may also not be strong enough to support and enable a robust gold trading sector. The good news however is that Iraq is not all alone in this. We know for starters that the country is receiving immense support from Turkey to develop its gold sector.
This support has included things like capacity building, especially the training of Iraqi bankers on gold trading best practices and more. There is confidence within the Iraqi government that eventually, the gold sector will boom, becoming an integral part of the local economy in the long run.
