South Sudan delays gold production by a year due to conflict

JUBA, July 31 (Reuters) - South Sudan will delay the start of gold mining by a year from its planned date in 2016, a senior government official said on Thursday, due to fighting between rival political groups in the world's newest country. Andu Ezbon Adde, undersecretary for mining in the Ministry of Petroleum and Mining, told Reuters he expected that "by 2017 our gold will enter into the world market". South Sudan is attempting to diversify its economy away from oil by exploiting its gold deposits. It may also have reserves of other minerals such as copper, uranium and clay, which it hopes to exploit with the help of investors. The country narrowly avoided civil war when troops loyal to sacked Vice President Riek Machar rose against the government of President Salva Kiir in mid-December, but sporadic fighting has continued, breaching a ceasefire agreement. South Sudan, one of the world's least developed countries after decades of civil war prior to seceding from Sudan in 2011, is trying to attract international investors to develop mining. "There are a lot of applications coming in ... not only for gold but also copper, marble and limestone from Kapoeta (town) for production of cement," Adde said following a meeting with Australian government officials. Loisa Cass, first secretary at the Australian High Commission in Juba, said South Sudan's mining sector had potential but required legislation to create a legal foundation. Australia will help South Sudan develop a register that captures data for the development of a licensing system for the mining of the gold deposits, which would ensure transparency, Cass said. Revenue from oil used to make up 98 percent of the budget until South Sudan slashed output by a third from the 350,000 barrels per day it produced before the fighting erupted. (Reporting by Carl Odera; Editing by James Macharia and Jane Baird)