NIGERIA – Nigeria has shifted its focus to large scale gold production to diversify the economy and boost government revenues which have been dwindling due to falling oil prices.
A report by Nairametrics indicted that the West Africa nation is set to commence gold production in 2021 after the launch of the Segilola Gold Project in Osun state.
Thor Explorations, the operator of the Segilola Gold Project, revealed to Mining Weekly that the construction and procurement processes are progressing on schedule and on budget.
Given the current progress of works at the mine, Thor Explorations was confident that it will deliver Nigeria’s first gold the second quarter of 2021.
Nigeria’s Minister for Mines and Steel Development, Olamilekan Adegbite said that the project is expected to create about direct 400 direct jobs and 1000 indirect jobs along the gold value chain.
He added that once the project takes off, Nigeria would become a major gold producing country, a move that would hasten the diversification of the economy and reduce unemployment among the youth populace.
According to the Nigerian minister for Mines and Steel development, the government was creating an enabling environment across the gold value chain.
The minister also noted that the government has licenced two gold refineries to refine gold to the London Bullion Market Association, LBMA, standard.
Despite having significant gold deposits very little large-scale mining activity is carried out in the country.
Most of the mining in the country is done at a small scale by artisanal miners who are often exploited by unscrupulous middlemen who buy the precious metal at below market-rate prices.
This not only denied artisanal miners fair rewards for their hard work, but also denied the federal government an estimate US$500 million in annual revenue.
Earlier this year, Nigeria inaugurated the Presidential Artisanal Gold Mining Development Initiative (PAGMI), with the aim of formalizing and integrating Artisanal and Small-Scale gold mining activities into the Nation’s legal, economic and institutional framework.
PAGMI which is anticipated to yield higher returns for artisanal miners and bring more revenue to the government presented its first gold to President Buhari in July this year.
The gold produced is expected to become a part of Nigeria’s external reserve after being purchased by the Central Bank.
The take-off of gold production in Nigeria is expected to open up an industry centered around gold production, from equipment leasing and repairs, logistic and transport.
Note that gold requires a specialized means of transport, security, insurance, aggregators among others.
These, according to Adegbite, would ultimately create tens of thousands of jobs across the gold value chain.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE