Making Nigeria Gold Producing Hub In West Africa

September 6, 2020

ABAH ADAH writes on Nigeria’s readiness to become a gold producing hub, in the West African sub region under the present administration.

Taking stock of his one year in office recently, the Minister of Mines and Steel Development (MMSD) Arc Olamilekan Adegbite, reiterated that Nigeria is on its way to being reckoned with as a gold producing hub in the West African Sub region in no distant time.

One of the visions the Minister had when he was appointed the minister a year ago which he has always mentioned in his speeches was to develop a gold ecosystem in the country that would make it a hub for the precious metal in the West African region. As it stands now Ghana, Mali, and Burkina Faso are three of West Africa’s most active gold-mining countries. Nigeria has all that opportunity but for the huge reserve of the precious metal in the country that is largely untapped as a result of the long neglect suffered by the sector. .


In pursuit of the vision, Adegbite together with the Minister of State, Dr Uchechukwu Ogah worked on a framework that would develop the upstream and downstream sector of the gold sector as evident in the various projects and programmes that sprang up in the last one year.

Talking about 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, a project which comprises a proposed open pit gold mining project based on an indicated mineral resource defined by a comprehensive drilling programme.

The project on completion is expected to process 650,000 tons of ore, with a target production of approximately 80,000 ounces per year from next year. The Minister has been actively supporting the project as part of efforts to diversify the economy and create 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 not relented in his efforts 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 in Kebbi State and Kian Smith in Ogun State. The two companies would procure gold from the Segilola gold project by Thor Exploration and would also procure from Artisanal and small scale miners, refining them to meet international standards. Some of these gold would be traded on the bullion trading platform where the CBN and investors both local and international would be the off takers.

Focusing also on the downstream sector the ministry under the leadership of Adegbite has created several buying centres were gold can be traded. Not long ago the Dukia, heritage Bank buying centre, a private sector initiative was launched. At the launch, the minister noted that it would help solidify the gold ecosystem.

He said: ‘This 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.’ He added, ‘buying centres with minimum guaranteed price thresholds 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 about 400 licensed mineral buying centres including those of gold nationwide involved in the purchase of precious and metallic minerals such as gold, lead zinc, tin, columbite, etc.

On Thursday, 16th July, 2020, Nigeria made history as the world witnessed a virtual presentation of the first locally produced gold bar in Aso Rock to Mr President. The 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.

The mined crude gold was processed and refined according to the London Bullion Market Association (LBMA) standards which is the international standard required for the use of gold as a reserve instrument.

CBN presented a check of N268 million for 12.5kg gold bar which was mined and refined according to the London Bullion Market Association (LBMA) standards required for use as a reserve instrument by the apex Bank. This feat was achieved courtesy of the artisanal gold miner support programme earlier launched by the federal government, known as Presidential Artisanal Gold Mining Development Initiative (PAGMI), the Solid Minerals Development Fund (SMDF) under the ministry being it’s implementing agency. It was approved by President Muhammadu Buhari in 2019 to foster the integration and formalisation of artisanal gold mining activities in the country with Kebbi and Osun as the first pilot states in focus.

PAGMI was designed as a broader strategy to 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.

Explaining, the Executive Secretary of SMDF and PAGMI implementation anchorman, Hajiya Fatima Shinkafi has said: “PAGMI is a special intervention programme approved by President Muhammadu Buhari to formalise artisanal mining and the initiative is designed as a quick win to diversify the Nigerian economy and to improve the social economic development of gold producing areas and the country at large.  “Pagmi is a national programme focused on poverty alleviation which would improve the lives of about one million households. It is a direct win for some of the poorest communities.”

Adding that the programme was also aimed at regulating artisanal gold mining she unfolded the projections for the programme, saying “PAGMI estimates that the federal government could realise an annual average of $150 Million in taxes, $25 million in royalties, and $500 million accretion to foreign reserves from the integration of artisanal gold mining activities implemented by PAGMI.”

Speaking during an interview, the President/CEO Thor Exploration Ltd who commended the Minister’s commitment to the course of solid minerals development in the country disclosed that the Segilola Gold Project currently under construction is projected to start producing in the first half of next year (2021), will provide over 400 direct jobs, 1,000 indirect jobs and huge revenue to the country.

“We, as a Company, have found the Minister very supportive in helping us to navigate successfully through the process, and we believe in his vision, which has been key in creating a gold economy.

The DG, Mining Cadastre Office (MCO), Engr Obadiah Nkom who was also interviewed said “The Minister wants to make Nigeria a gold producing hub in West Africa hence he has made it easier for stakeheolders in the sector to apply for mining licenses.

“We have streamlined our operation at the mining cadre office, making it easier for investors to apply for mining licenses online. There are also waivers for those who want to bring in equipment into the mining sector. Indeed the sector has become more business friendly under the tenure of the minister,” he said.

Commenting also, the managing director (MD), Dukia Gold and Precious Metals Refining Company Ltd, Bose Owolabi noted that Dukia Gold is at the forefront in ensuring the emergence of a full Ecosystem that will guarantee beneficiation and full refining of gold and other precious metals is done in Nigeria, and that better value is retained in country by mining stakeholders in Nigeria and across West and Central Africa Mining Communities.

The MD said, “Nothing could be better for the country; the Nigerian Solid Mineral Road Map put together by the Buhari Administration and being faithfully and transparently executed by the Honourable Minister Architect Olamilekan Adegbite, is a major booster for investors in solid minerals Industry of Nigeria especially for the precious metals sector.

“The enabling environment created by a consistent policy has empowered the people of Nigeria and of course the business of Dukia Gold and Precious Metals Refining Co.

“As we all know, Gold is a very visible and high value precious metal. Nigeria has huge deposits and these are untapped largely. Before now, gold mined in Nigeria is being illegally exported with no value and transparent benefit to the country. The right enabling environment, Policies and Regulatory framework are being put in place by Government to ensure compliance and encourage participation of the private sector in the gold value chain i.e. from Mines to Mint and from Mint to Market. Dukia Gold is playing role in the physical actualisation of government policies and objectives.”

The MD equally stressed the need to improve on the production of gold and other precious metal alloys in Nigeria, adding “The Small-scale mining community need to be complemented by attracting major Miners to operate in Nigeria. Dukia Gold has the refining platform to buy and process the production of Gold Dore from Nigeria and the rest of West & Central Africa.”

Speaking further, she said, “We understand that a lot of effort is also being made through international and local information, communication and education activities carried out by the Ministry to showcase the huge potentials of the Nigerian mining sector and to attract and guide interested participants.

“Capacity building including adoption/ institutionalisation of a mining code that will drive appropriate certification and accreditation schemes for Professionals is also key.”

She said that Dukia Heritage Buying Centres are location-based segments of designated branches of their inaugural financial partner Heritage Bank Plc.

“These buying centres will help us aggregate raw materials like gold items from households as well as from small scale miners across the country. There is now no need for illegal exports to Dubai or anywhere else, because these centres exist and, importantly, purchases are firmly tied to International best practices.

“Total transparency and better enterprise standards are assured for everybody involved at the purchasing stages. We are partnering with financial institutions led by Heritage Bank PLC to actualise this initiative,” the MD explained.

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