Sudan is in the middle of a gold rush that has prompted tens of thousands to undertake hazardous expeditions across remote desert areas to search for gold, which has reached record highs this year above $1,476 an ounce.

The government has also stepped up focus on the gold sector in a bid to diversify the economy as its oil-producing south prepares for independence in July.

Gold output in Sudan stood at 36 tons last year according to official estimates, but production totalled more than 70 tons if gold smuggled out of the country by unofficial “artisanal” gold seekers is included, the minister said.

“I would say this year we expect to mine 74 tons of gold ... but the majority — 60 or more than 60 tons will be produced from the artisanal sector,” Abdelbagi Gailani Ahmed said in an interview at his ministry overlooking the Nile.

Gailani’s forecasts are well above industry estimates for the country — which put gold output at 4 tons in 2009 based on mine supply data from consultancy GFMS — but the minister said that was because the vast amount of gold mined by local gold-seekers was not being taken into account.

If Sudan’s gold output reached 74 tons, it would make the country the tenth largest producer and Africa’s third largest, behind South Africa and Ghana.

The government is now drawing up incentives to offer local gold-hunters to prevent them from taking gold out of the country and selling it in places such as Dubai or Beirut, he said.

The Sudanese central bank’s effective devaluation of the local currency in November, which aligned the official exchange rate with the dollar rate in the black market, is among measures that has helped, he said.

Sudan also set up a mining services company two months ago to offer drilling, prospecting and laboratory services to gold companies working in the country, he said.

Gold prices have surged to all-time highs this year as investors rush to the safe haven precious metal as unrest spreads in the Middle East, adding to the allure of the sector in Sudan.

Khartoum has already signed 10 mining deals with national and foreign companies this year and expects to have agreed 50 mining deals by the end of the year, Gailani said. That compares to about 48 agreements last year, he said.

Though gold remains the biggest revenue generator among minerals for Sudan — it is expected to bring in $3 billion in export revenues this year including gold mined by small-scale prospectors — interest is also growing in other metals such as chromium, zinc and iron, he said.

Revenues from mining of all minerals other than gold is expected to stand at $1 billion this year, Gailani said.

There are as many as 128 companies working in the gold sector, 37 companies working on chromium, and five working on iron ore, he said.