By Ehi Braimah
THUR, 05 NOV, 2020-theGBJournal- On July 16 this year, President Muhammadu Buhari launched the Presidential Artisanal Gold Mining Development Initiative (PAGMI). On that occasion, the president received the first batch of artisanally-mined gold bar weighing 12.5 kg, and announced that we lost close to $3 billion to gold smuggling between 2012 and 2018 which works out to be about $500 million each year – that is a lot of money, especially now that our economy is bleeding. Unfortunately, smuggling gold out of Nigeria is a lucrative business for the cartel. “Gold is the most smuggled mineral out of Nigeria and it has the backing of some influential people,” Arc Olamilekan Adegbite, Honourable Minister of Mines and Steel Development, once lamented at a media briefing.
This revelation by the Minister is nothing new and it should not come as a surprise. Gold is smuggled through our airports – mostly in private jets — and seaports with the connivance of ranking government officials. This explains why Arc Adegbite has adopted a multi-stakeholder approach in search of lasting solution to this intractable problem by working with the Ministry of Finance that supervises the Nigeria Customs Service and the Ministry of Interior that supervises Immigration Service. These agencies of government should wake up and be alive to their responsibilities – they must constantly confront gold smugglers. The good news is that Adegbite has crafted a vision to revive the gold ecosystem in spite of the menace of smugglers and their collaborators.
After being on the saddle for slightly over one year, the Honourable Minister revealed in his performance review that the country was on its way to becoming a major gold producing hub in the West African region, which would diversify the country’s revenue away from crude oil and create jobs for our teeming youth population. He noted that government was creating an enabling environment across the gold value chain. “Indeed the international roadshows we have had in the past have borne fruits. Today, we have Thor exploration in Osun State through the Segilola Gold project, which is projected to start producing in the first half of next year. The project is expected to create about 400 direct jobs and 1,000 indirect jobs,” Adegbite said.
Adegbite also disclosed that the government had licensed two gold refineries that would refine gold to the London Bullion Market Association, LBMA, standard. Furthermore, the Minister projected that a slew of industries would spring up across the gold value chain. ‘‘Numerous industries will spring off when our gold economy becomes full-fledged. Some of them would include equipment leasing and repairs, logistic and transport as gold requires a specialised means of transport, security, insurance, aggregators, and so on. These would ultimately create tens of thousands of jobs,” he stated confidently.
Adegbite also said that the country, for the first time, had mined, processed and refined gold under PAGMI for use as part of Nigeria’s external reserves. “PAGMI will result in the creation of thousands of new mining and formalised jobs, leading to poverty alleviation for many households. Under the scheme, artisanal and small scale gold miners will earn more from higher productivity, better recovery rates through mechanisation of operations, and better access to reliable geological information,” the Honourable Minister said.
Furthermore, Adegbite disclosed that the Ministry had initiated a process that would lead to local capacity development in the production of barite. He announced that the Ministry has employed a consultant to develop a roadmap for the sector. It is estimated that over five thousand jobs would be created when the nation attains self-sufficiency in local barite production.
The Minister, while reviewing his scorecard after one year in office, said: “Presently, the barite that is used in the oil and gas industry is imported. But we are resolved to reverse this trend. As you may know barite is a critical weighting material in drilling fluids due to its high specific gravity.” He continued: “We are working on a roadmap towards a sustainable barite industry in Nigeria to support, regulate and monitor stake holders along the barite value chain. This process will identify and assist local mining and milling companies which would ultimately lead to the creation of jobs and save the nation foreign exchange expended on importing barite.”
As a deliberate strategy to focus on the upstream sector of the gold sector that deals with exploration, production and refining of gold, the Minister lent his support to a Canadian company, Thor Exploration, that had been granted license to mine gold in Nigeria through the Segilola Gold project. Just before the lockdown, the Minister was at the stone laying ceremony of the Segilola Gold project in Osun State by Thor exploration. It comprises a proposed open pit gold mining project based on an indicated mineral resource defined by a comprehensive drilling programme.
The project will process 650,000 tons of ore, with a target production of approximately 80,000 ounces per year from next year. Adegbite has been actively supporting the project which would help diversify the economy and create thousands of jobs. During the block laying ceremony, the Minister noted that the government was willing to give waivers on equipment and taxes to major investors willing to invest in the sector.
Adegbite has been working tirelessly to ensure that the two companies that were granted licenses to refine gold in Nigeria to London bullion standard come on stream. The two companies are Dukia Gold andKian Smith. They would procure gold from the Segilola gold project by Thor Exploration andartisanal and small scale miners, refining them to meet international standard. Some of this gold would be traded on the bullion trading platform where the CBN and investors — both local and international — would be the off takers.
Focusing on the downstream sector, the Ministry created several buying centers were gold can be traded. The launch of Dukia, a Heritage Bank Buying Centre not too long ago, is a good example. The Minister noted that it would help solidify the gold ecosystem and it is one of the measures put in place by the government to foster growth and bring about the optimisation of Nigeria’s mineral value chain.
This initiative will bring about efficiency and transparency to physical trading and transactions of mineral commodities, resulting in accurate mineral data aggregation and reporting. According to the Minister, the buying centers with minimum guaranteed price thresholds will also ensure that artisanal miners receive the right pricing for their goods relative to illegal off takers, thus breaking the status quo of illegal mining and increasing the royalty revenue accrual to the federal government. At present, there are over 400 licensed mineral buying centers nationwide involved in the purchase of precious and metallic minerals such as gold, lead, zinc, tin, columbite, etc.
The Ministry also plans to embark on an extensive training by bringing in world renowned gemstone makers who would teach Nigerians how to make gemstones and jewelries to international standard. This would spur a huge cottage industry in gemstone production, creating jobs and saving the country foreign exchange spent on importing jewelleries.
This initiative is poised to make Nigeria an exporter of jewelleries and gemstones, which would generate foreign exchange for the country. This milestone is the culmination of 24 months of intense efforts by the leadership of Adegbite through the Solid Minerals Development Fund, Kebbi and Osun States Government, Ministry of Mines and Steel Development, and the Ministry of Finance, Budget, and National Planning under a Steering Committee led by the Chief of Staff to the President, Professor Ibrahim Gambari. It is gratifying to note that Nigeria produced, for the first time ever in June 2020, artisanal-mined gold that was processed and refined according to the London Bullion Market Association (LBMA) standards required for the use of gold as a reserve instrument by the Central Bank of Nigeria.
This means that the Central Bank will be purchasing gold that has been mined, processed and refined under the Presidential Artisanal Gold Mining Development Initiative, PAGMI, which is a comprehensive artisanal and small-scale gold mining development programme.It was launched in 2019 to foster the formalisation and integration of artisanal gold mining activities into Nigeria’s legal, economic, and institutional framework. PAGMI has been designed to integrate social, environmental, health and safety, economic, commercial, and technical considerations, into its implementation.
PAGMI is a broader strategy to create a viable gold economy and address the structural and institutional factors such as rural poverty, lack of alternative livelihoods, and difficulties in meeting legal and regulatory requirements that tend to push artisanal gold mining operators deeper into the informal economy.
Braimah is the Publisher/Editor-in-Chief of Naija Times (https://naijatimes.ng)
Twitter-@theGBJournal|email: info@govandbusinessjournal.com.ng
