- The country’s gold dominates the Dubai market -NMGS
- According to MAN, Chinese are engaging in illegal pricing competition
- How illegal mining paralyses agricultural activities
With crude oil trading around $35 per barrel, undeveloped solid minerals present a potential for Nigeria to diversify and earn more foreign exchange (forex), with gold now trading at $1,683.65 per ounce. The federal government has talked about diversifying the economy for years, but little has been done to assure proper implementation.
With the COVID-19 pandemic affecting energy balance and demand for oil, several governments have been compelled to investigate alternative revenue sources in order to keep oil prices stable.
Given its current economic challenges, Nigeria can use its substantial minerals resources to save the country from looming economic disaster.
According to data from the Ministry of Solid Minerals and Development, gold resources can be found in Abuja, Abia, Bauchi, Cross River, Edo, Niger, Sokoto, Kebbi, Oyo, Kogi, Zamfara, Osun, and Kaduna states.
Experts predict that if the country conserves its gold deposits and assures appropriate utilization, the cash generated will exceed that of oil and gas.
Illegal gold mining has become a culture that has thrived despite the government’s promise to prosecute perpetrators. According to unofficial data from open source websites such as the US Geological Survey, around 18,000kg of gold worth over $1 billion was smuggled out of Nigeria between 2018 and 2019.
In an interview with The Guardian, Abdullahi Binuyo, the Deputy Chief of Staff to the Governor of Osun State, expressed regret over the actions of illegal miners, stressing that no responsible government would fold its arms and watch its territory be defiled by unauthorised persons.
Binuyo discovered that, in addition to commercial leakages, illicit miners had polluted the Osun River with dangerous metals, making it unfit for human consumption and irrigation. He went on to say that anybody detained would be prosecuted and forced to pay restitution.
He also stated that the state government’s enforcement agencies are disrupting illegal mining and drawing attention to the actions of their funders and sponsors, adding, “We will be relentless in this campaign until we rid the land of these miscreants to prevent another Niger Delta experience in Osun.”
When asked if the Federal Government could rely on the gold resource in Osun to diversify the economy, Binuyo responded, “Perhaps’rely’ isn’t the right word here.” Osun’s Solid Minerals Development Programme includes interventions targeted to enhance value at each stage of the gold value chain for Osun indigenes.
“No gold mined in Osun should leave Osun without adding value.” As a result, our program includes projects aimed at improving jewelry manufacturing, logistics, and other value-added firms in the mining industry in general, as well as precious metals and gemstones in particular.”
Dr. Olufemi Ibiremo, a soil scientist at the Cocoa Research Institute of Nigeria (CRIN), told The Guardian that mining continues to have a negative impact on the natural ecosystem of soils. He went on to say that the practice promotes erosion and makes agricultural tasks harder.
Ibiremo said that disorganized mining endangers people’s lives because anyone could fall into ditches. As a result, it makes the environment unfit for cultivation and living.
“Mining is a global activity, and revenue to the government will be difficult if it is not regulated.” They have no idea how many people are involved or how much gold they are receiving; the whole thing is simply too convoluted.
“There must be a discussion that will govern all of these people.” In a place like Ilesha, there is a village where gold mining occurs; I been there. It is unfortunate that agricultural activities are halted in that area. There are many individuals coming in from all across the country at that location, and it is not safe and could serve as a hideout for criminals.”He advocated for legislation that would control gold mining and monitor miners’ activities.
“If proper regulations are in place, miners will be required to remediate the soil after their mining activities.” However, because they are not watched, they leave the holes they dig open, which is extremely dangerous. “There must also be compensation for the community, as they have been deprived of their means of livelihood,” he continued.
Meanwhile, Section 44 (3) of the Nigerian Minerals and Mining Law of 1999 states that the federal government owns and controls all minerals in Nigeria and is tasked with managing such natural resources in the way authorized by the National Assembly.
Operator licenses are granted by the Ministry of Mines and Steel Development. Any operator who does not have a license from this ministry is considered to be engaging in illegal operations. A person like this can be arrested and tried in any Federal High Court. According to information on the ministry’s website, the Federal Government gave gold mining licenses to only 12 businesses in Osun.
Dr. Akinade Olatunji, General Secretary of the Nigerian Mining and Geoscience Society (NMGS), said that the artisanal miners are working on alluvial deposits, which are relatively easy to detect, and that the country requires significant gold exploration activity.
“Nigerian gold is currently known to dominate the Dubai gold market.” So, as long as the gold is properly polished and cleansed, Nigerian gold is as good as gold from any other country,” he stated.
Olatunji stated that a rigorous exploration campaign would assess the quantity and quality of gold occurrences in Nigeria. “Efforts are being made to achieve this, as gold is one of the targeted metals in the National Integrated Mineral Exploration Project, which is being led by the Mining, Minerals and Sustainable Development (MMSD) and overseen by the Nigeria Geological Survey Agency (NGSA).”
“It is expected that when the project is completed, Nigeria will be able to present bankable data on any of the metals being explored, including gold.”
“To talk about reserves, you must have undertaken serious exploration work, and it is not done in a year,” Olatunji told The Guardian of Nigeria’s gold deposits. A detailed exploration effort that will result in an accurate calculation of the reserve of any mineral deposits, in this case, gold, will take at least five years for a chosen area.We haven’t done that for the majority of our gold occurrences, so talking about Nigerian gold reserves is tricky. Nigeria, on the other hand, has massive gold occurrences in various sections of the country, although their reserves have not been confirmed.”
He further stated that Segilola, the country’s first large-scale gold mine to be openly traded on an international stock exchange (Toronto Stock Exchange), located in Ilesha, Osun State, had done substantial prospecting work. It has calculated its reserves and is ready to begin mining.
In response to the likelihood of gold mines decreasing, similar to oil, due to continuous enormous extraction, Olatunji stated that gold, like crude, is a non-renewable resource.
“As you mine, you deplete your reserves,” he explained. However, we cannot put a price tag on it for the time being. As I previously stated, we have yet to conduct major exploration work in the country. Like COVID-19, where the only method to combat the epidemic is to test, test, and test again, the best approach to address these problems is to explore, explore, and explore!”
He advocated for enormous investments in extended exploration to generate the geoscience data and information required to make informed decisions.
Abiodun Oni, the Special Adviser on Solid Minerals Development for the Oyo State Government, stated that Governor Seyi Makinde is willing to work with the Federal Government to eliminate unlawful mining and create a conducive climate for investors. “We are working on getting bankable data on our mineral resources before going to market,” he stated. As a result, we base our decisions on accurate information, particularly when it comes to potential investors.
“Additionally, the Oyo State Minerals Development Agency is consulting with the Federal Ministry of Mines and Steel Development on how to address the problem of illegal gold mining in our industry by developing a tailored and collaborative solution.”
In an interview with The Guardian, Sani Shehu, a former president of the Miners Association of Nigeria, lamented that the local minefields were becoming “nobody’s land.” He implied that illicit miners operate in licensed regions, preventing the owners of such licenses from operating. He went on to say that the Chinese presence would have been beneficial if they hadn’t engaged in illicit pricing competition.
“They live in a nearby village and negotiate the price with the legal owners of mining sites.” If only they would cease conspiring with unpatriotic Nigerians, both inside and outside government. Until all of these terrible activities cease, the presence of Chinese in the mining sector is detrimental to artisanal miners and the Nigerian economy.
“The truth is that artisanal miners have a market, but they are frequently underpriced and exploited.” The artisanal miners face a hurdle due to the lack of well-structured buying centers that are properly supervised by the government.”
Previously, data from the Nigerian Extractive Industries Transparency Initiative (NEITI) audits and international sources revealed that between 2016 and 2018, Nigeria lost around N353 billion in gold smuggled out of the country and sold on the international market.
Furthermore, approximately 35 million metric tonnes of unprocessed solid minerals are purportedly exported from Nigeria each year, resulting in significant income losses because the commodities would have fetched more if processed and transformed into products before being shipped out of the nation.
The mining sector as a whole generated over N3.7 billion in revenue for the government in 2018, reflecting a 68% increase from the N2.2 billion generated in 2014.
Despite rich mineral deposits, Nigeria’s mining sector provides less than one percent of the country’s GDP.
Olamilekan Adegbite, Minister of Mines and Steel Development, has admitted that illegal gold mining has become profitable due to soaring gold prices during the coronavirus outbreak.
The minister also stated that currencies are losing value as a result of the economic challenges related with the pandemic. Gold, on the other hand, is one of the world’s safest currencies. He remarked that the rise in worldwide stock market prices contributed to the increase in illegal mining.
Zamfara State in North West Nigeria is also notorious for illegal gold mining, prompting the Federal Government to halt operations there in April 2019.
Many illegal miners have now relocated to Ilesha in Osun State as a result of the order, just as Adegbite claimed that powerful Nigerians are participating in the illegal exploitation of the country’s resources, with local communities’ assistance.