By Abdulwasiu Hassan
Nigeria may have struck gold with an idea to stop the flight of capital from the country, characterised by illegal mining and rampant illegal export of the precious yellow metal from its abundantly endowed northern and southwestern regions.
Located in Mopa town in central state of Kogi, a gold processing plant commissioned recently is expected to serve a cluster of artisanal small miners for the development of the gold processing industry in the West African country.
Nigeria's outgoing minister of mines and steel development Olamilekan Adegbite believes the facility will formalise artisanal small mining in a cluster and help "curb the exploitation of artisanal and small-scale gold miners".
The goal is to encourage the youth to actively participate in the "downstream gold value chain", he said while launching the plant.
The plant, equipped with gold processing machines and other machinery, also has 30 stalls, a training section, an administrative block and stable power supply, among other requisites.
To minimise illegal mining, the government is capturing the biometric data of all registered small-scale artisanal miners across the country.
"We are currently creating an ecosystem to minimize the high rate of illegal mining and smuggling, increase government revenue from the resource, create jobs and improve environmental and social stewardship," Adegbite said.
Human and capital cost
For long, gold mining in Nigeria has been dominated by artisanal miners who mine and sell gold informally across Nigeria.
This type of mining is the norm across the northwestern, northcentral and southwestern parts. Despite its benefits, artisanal gold mining has come at a huge human and capital cost.
Hundreds of children were killed by lead poisoning triggered by artisanal mining in the northwestern state of Zamfara from 2010 till around 2021.
The good news is that contamination of water, soil and food due to processing of gold deposits by artisanal miners in the area has been arrested through a clean-up by local and international stakeholders.
Flight of capital through illegal export of unprocessed gold from Nigeria, however, remains a challenge because of the systemic loopholes that remain to be plugged. Informal trading in unprocessed gold is still a huge drain on the exchequer, besides causing job loss, the mining minister said.
One of the corrective steps taken by the government in tackling this problem is the Presidential Artisanal Gold Mining Development Initiative (PAGMDI), aimed at buying gold directly from artisanal miners.
The programme was launched in 2019. In 2020, 12.5kg of gold bars mined in Nigeria in accordance with the London Bullion Market Association standards, was paid for by Nigeria's apex bank, Central Bank of Nigeria (CBN), through this very programme.
When the gold bars were acquired in 2020, then-President Muhammadu Buhari had said that improved gold mining in the country would generate 2,50,000 jobs while generating annual income worth $500 million in terms of royalties and taxes to the government.
Gold misses the shine
Although the success of private companies like Segilola Resources Operating Ltd in gold mining has been triggering interest abroad about investment in Nigeria, larger porting of gold mining in Nigeria is still done by artisanal miners, outgoing minister Adegbite said.
This theoretically means that many miners could find the gold processing plant in Kogi useful.
Principal geologist Abdullahi Lawal said the plant would increase the gold recovery rate in the mining process, thus raising the volume of pure gold mined by the artisanal miners.
An increase in productivity would, in turn, "increase mining revenue", he explained. A potential hurdle is the site of the gold processing plant being far from the gold deposits in the northwestern and southwestern parts of Nigeria.
In order to bridge the distance, experts believe the authorities need to walk the extra mile to link up artisanal miners from across the country with the gold processing plant.
Lawal said the country needs to put in place transportation infrastructure between mining sites in other parts of the country and the gold processing plant or establish plants wherever artisanal mining is taking place.
Security hiccups have been hindering gold mining in parts of the country for a while now. Experts think if something is not done to rectify this, security problems can limit the success of the gold processing plant.
With improved security, it is hoped that the gold mining and processing sector in Nigeria will grow, spurring employment and government earnings.
As a country that is trying to diversify its economy from the one that relies solely on export of crude oil, Nigeria can do with the improved revenue and employment opportunities brought about by government intervention.
