Illegal gold mining rips Nigeria off forex revenue
Artisanal mining in Jos Plateau State. PHOTO: NAN
• Nation’s gold dominates Dubai market -NMGS
• How illegal mining paralyses agricultural activities
• Chinese engaging in illicit price competition, says MAN
With crude oil trading at around $35 per barrel, untapped solid minerals offer Nigeria the opportunity to diversify and earn more foreign exchange (forex), as gold currently trades at 1,683.65 per ounce.
The Federal Government had, over the years, talked about diversifying the economy but not much has been done to ensure proper implementation.
With the COVID-19 pandemic altering energy balance and demand for oil, many countries have been forced to consider other revenue resources to contain falling oil prices.
Nigeria, given its current economic challenges can harness the potential in its solid minerals resources to salvage the country from impending economic disaster.
Data from the Ministry of Solid Minerals and Development show that there are gold deposits in Abuja, Abia, Bauchi, Cross River, Edo, Niger, Sokoto, Kebbi, Oyo, Kogi, Zamfara, Osun and Kaduna states.
Experts also believe that if the country conserves her gold reserves, and ensures effective exploitation, the accruing revenue would surpass that of oil and gas.
Illegal gold mining has been a culture and has continued to thrive despite government’s threat to prosecute culprits. Unofficial figures from various open source websites such as the U.S. Geological Survey estimate that some 18,000kg of gold valued at nearly $1billion was smuggled out of Nigeria between 2018 and 2019.
The Deputy Chief of Staff to the Osun State Governor, Abdullahi Binuyo in an interview with The Guardian, expressed sadness over the activities of illegal miners, noting that no responsible government would fold its arms and watch its land being degraded by unauthorised persons.
Binuyo established that beyond the economic leakages, illegal miners had also polluted the Osun River with poisonous metals, thereby making it unsafe for human consumption and irrigation. He added that those arrested would be prosecuted and made to pay compensation.
He also said the state government’s enforcement agencies are disrupting illegal mining, and spotlighting the activities of their financiers and backers, saying: “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 deposit of gold in Osun to diversify the economy, Binuyo said: “Perhaps ‘rely’ is not the appropriate word here. Osun’s Solid Minerals Development Programme has interventions designed for Osun indigenes to add value at each stage in the gold value chain.
“No gold mined in Osun should leave Osun without some value-addition. So, our programme has projects designed to improve jewellery making, logistics and other value additive enterprises to the mining sector in general but also precious metals and gemstones in particular.”
While speaking with The Guardian, a soil scientist at Cocoa Research Institute of Nigeria (CRIN), Dr. Olufemi Ibiremo, noted that mining continues to affect the natural ecosystem of soils dangerously. He added that the practice is a recipe for erosion and makes agricultural activities very difficult.
Ibiremo argued that uncoordinated mining endangers the lives of the people, as just anyone could fall into ditches. It therefore makes the environment unsafe for farming and survival.
“Mining is a global activity and when it is not regulated, the revenue to the government will be difficult. They don’t know how many people are involved, or how much of gold they are getting; the whole thing is just too complicated.
“There must be a deliberation that will regulate all these people. When you go to a place like Ilesha, there is a village where gold mining takes place; I was there. It is sad that agricultural activities are paralysed in that location. At that place, there are lots of people coming in from all over the country, and such a place is not safe and could serve as a hideout for criminals.”He called for legislation where gold mining will be regulated and the activities of the miners would be monitored.
“If there is proper regulation, miners would be compelled to remediate the soil after their mining activities. But because they are not monitored, they leave the holes that they dig open and this is very dangerous. He added, “Also, there must be compensation for the community, since they are deprived of their means of livelihood.”
Meanwhile, Section 44 (3) of the Nigerian Minerals and Mining law of 1999 provides that ownership and control of all minerals in Nigeria is vested in the federal government, which is mandated to manage such natural resources in a manner as may be prescribed by the National Assembly.
The Ministry of Mines and Steel Development is responsible for granting licences to operators. Any operator without a licence from this ministry is deemed to be carrying out illegal activities. Such a person may be arrested and tried in any Federal High Court. Information on the ministry’s website indicates that the Federal Government issued gold mining licences to only 12 operators in Osun.
The General Secretary, Nigerian Mining and Geoscience Society (NMGS), Dr. Akinade Olatunji, disclosed that what the artisanal miners are working on is alluvial deposits, which are very easy to find, adding that the country needs intensive gold exploration work.
“Nigerian gold is known to presently dominate the Dubai gold market. So, as long as the gold is properly refined and purified, the gold from Nigeria is as good as the gold from any country,” he said.
Olatunji noted that a detailed exploration programme would determine the quantity and quality of Nigeria’s gold occurrences. “Efforts are being put in place to achieve this, being that gold is one of the targeted metals that is currently running in the National Integrated Mineral Exploration Project undertaken by the Mining, Minerals and Sustainable Development (MMSD), and supervised by the Nigeria Geological Survey Agency (NGSA).
“It is believed that when the project is completed, Nigeria will be able to present a bankable data regarding any of the metals being explored and in this case that of gold.
On the quantum of gold reserves in Nigeria, Olatunji told The Guardian: “To talk about reserves, you must have undertaken a serious exploration work, and it is not done in a year. A detailed exploration work that will lead to accurate determination of the reserve of any mineral deposits, in this case, gold, will take a minimum of five years for a selected location.
“We have not done that for most of our gold occurrences, so it is difficult to talk about Nigerian gold reserves. However, Nigeria has huge gold occurrences in most parts of the country but their reserves have not been proven.”
He added that Segilola, the first large-scale gold mine in the country to be publicly traded on an international stock exchange (Toronto Stock Exchange), located in Ilesha, Osun State, has done an extensive work on prospect. It has determined its reserves and is ready to start mining.
On the possibility of gold deposits depleting just as in oil, in view of the ongoing massive exploitation, Olatunji noted that like crude, gold is a non-renewable resource.
He said: “As you mine, you deplete your reserves. However, we cannot put a figure on it for now. As I said, we are yet to even do an extensive exploration work in the country. Just like COVID-19 where the best way to confront the pandemic is test, test and test; the best way for these questions to be answered is exploration, exploration, and exploration!”
He called for massive investment in extensive exploration to generate the requisite geosciences data and information needed to make informed decisions.
On his part, Oyo State Government’s Special Adviser on Solid Minerals Development, Abiodun Oni, said Governor Seyi Makinde is ready to collaborate with the Federal Government to ensure that illegal mining is abolished and provides a convenient environment for investors. He said: “We are working on getting a bankable data on our mineral resources before going to the market. So, we are guided by informed data for our decisions especially as it relates to our potential investors.
“More so, the Oyo State Minerals Development Agency is discussing with the Federal Ministry of Mines and Steel Development on how to curb the menace of illegal gold mining that is plaguing our industry by coming up with a customised and joint solution.
Also, in a chat with The Guardian, a former president, Miners Association of Nigeria, Sani Shehu, decried that the local minefields were becoming “nobody’s land.” He hinted that illegal miners operate in licenced areas, thereby obstructing owners of such licences from their operation. He added that the presence of the Chinese would have been a blessing if they didn’t engage in illegal price competition.
“They stay in a nearby village and compute price with legal owners of mining sites. If only they will stop conniving with unpatriotic Nigerians, in and outside government. Until all these heinous practices are stopped, the presence of Chinese in the mining sector is inimical to the artisanal miners and the economy of Nigeria.
“The truth is that there is a market for the artisanal miners, but they are often being under-priced and exploited. The absence of well-structured buying centres that are properly monitored by the government is a challenge to the artisanal miners.”
Earlier, reports from the Nigerian Extractive Industries Transparency Initiative (NEITI) audits and international sources indicated that Nigeria lost about N353 billion in gold smuggled out of the country and sold in the international market between 2016 and 2018.
Also, about 35 million metric tonnes of unprocessed solid minerals are reportedly exported from Nigeria yearly, with attendant huge revenue losses, as the commodities would have fetched more if they were processed and converted into products before being shipped out of the country.
The entire mining sector generated just about N3.7 billion as revenue for the government in 2018, representing a 68 per cent increase from the N2.2 billion generated in 2014.
Despite abundant mineral deposits, Nigeria’s mining sector contributes less than one per cent to Nigeria’s Gross Domestic Product (GDP).
Minister of Mines and Steel Development, Olamilekan Adegbite, recently acknowledged that illegal gold mining became lucrative due to rising gold price amid the coronavirus pandemic.
The minister added that because of the economic problems associated with the pandemic, currencies are losing their value. Gold is however one of the safest currencies in the world. He noted that price hike at the international stock market contributed to the spike in illegal mining.
Zamfara State, in North West Nigeria, is also well known for illegal gold mining, which prompted the Federal Government to freeze operations there in April 2019.
With the order, many illegal miners have since relocated to Ilesha in Osun State, just as Adegbite revealed that powerful Nigerians are involved in the illicit exploitation of the country’s minerals, with support from local communities.
Culled from guardian.ng
