Gold is a precious stone that anyone wishes to have whether legally or illegally. However, the federal government is already set to block every loop holes mitigating the growth of the gold mining sector. With the new Presidential Artisanal Gold Mining Development Initiative (PAGMI) the sector is expected to rake in $675 million annual revenue to Nigeria bringing a win-win scenario to artisanal miners, the government and investors alike. AYONI M. AGBABIAKA reports.
The initiative which was approved by President Muhammadu Buhari in 2019 was to foster integration of artisanal gold mining activities in the country’s legal, economic, and institutional framework.
This integration will create new and formalized mining jobs, fast track economic diversification, reduce incidences of lead and mercury poisoning, encourage safer mining practices, plug economic leakages, tackle economic sabotage, and improve the nation’s foreign reserves.
UN
Using data from UN Comtrade, PAGMI estimates that between 2012-2018, 97 tonnes of gold valued at over $3 billion was illegally smuggled out of Nigeria. In addition to economic sabotage, illegal artisanal mining has fuelled instability and lead poisoning incidents across gold mining communities.
Unregulated artisanal mining places a significant burden on fragile health systems. From 2010 to 2016, there were more than 7,000 incidences of lead poisoning, resulting in 700 deaths related to gold mining activities in Zamfara and Kebbi alone. Bearing in mind the effect of illegality of gold mining in the country;
Nigeria’s gold as reserve instrument
PAGMI will source, aggregate, process, and refine artisanally mined gold under a National Gold Purchase Programme for supply to the Central Bank of Nigeria (CBN) for use as a reserve instrument. “This is the first time artisanally mined gold from Nigeria is refined according to the standards required for the use of gold as a reserve instrument by the CBN.
This milestone is the culmination of 24 months of intense efforts between 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.
Expected good delivery
According to the Ministry of Mines and Steel Development (MMSD) PAGMI will deliver Good Delivery Gold Bars to the Central Bank of Nigeria. “Good Delivery” Bars are those that meet the standards set by The London Bullion Market Association (LBMA) and the OECD Due Diligence Guidance for responsible Sourcing of Minerals.
Good Delivery bars are notable for their large size and high purity. They are the type used in the major international markets (Hong Kong, London, New York, Sydney, Tokyo, and Zürich) and the gold reserves of governments, central banks, and the IMF.
Through PAGMI, the CBN will purchase locally produced gold in Naira to boost the nation’s foreign reserves.
Using a Centralized off-take and Supply System supported by a Decentralized Aggregation and Production Network, PAGMI will buy all the gold produced by artisanal and small-scale miners and aggregated by licensed buying centers and aggregators for supply to the Central Bank of Nigeria.
PAGMI will ensure that responsible sourcing standards, as outlined in the OECD Due Diligence Guidance, are adhered to, and the gold bars delivered to the Central Bank of Nigeria are Responsibly-Sourced, and LBMA Certified.
$675 million annual revenue
On a large scale, PAGMI estimates that the Federal Government of Nigeria could realize 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.
500,000 new mining and formalized jobs
PAGMI will result in the creation of over 500,000 new mining and formalized jobs, leading to poverty alleviation for more than 1 million households.
Under PAGMI, artisanal gold miners will earn more from higher productivity, better recovery rates, mechanization of operations, and better access to reliable geological information. Increased earnings for the miners will have significant spillover effects in the local economies as businesses will grow to cater to the increased consumption per household.
PAGMI is 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.
PAGMI will use better access to market and other incentives aimed at boosting productivity and output to tackle the institutional challenges limiting the integration of artisanal gold mining operators into the formal economy.
Thermofisher and Metler Toledo as partners
In the next couple of months, PAGMI will scale up across the entire gold mining belt of the country, and agreements have been reached with Thermofisher and Metler Toledo, leading producers of gold testing and weight equipment to equip up to 50 buying centers.
Guidelines for participating small-scale miners, buying center operators and aggregators will be released soon
The guidelines for participating small-scale miners, buying center operators and aggregators will be released soon.
This milestone is a celebration of the resourcefulness of our hard-working artisanal miners and the remarkable efforts of the PAGMI Presidential Steering Committee led by the Chief of Staff to the President, Professor Ibrahim Gambari. This milestone is another demonstration of His Excellency, the President’s commitment to economic diversification, rural economies improvement, and job creation.
Minister of Mines and Steel Development (MMSD) Arc Olamilekan Adegbite at an interactive session with journalists in Abuja Tuesday, stated that the initiative is taking the gold mining through a value chain that brings more value to artisans and improve lives as well. “We are attempting to legalise artisanal mining,” He said, adding that the buying centers will serve as aggregators in the value chain.
He implored the private sector to put their money in mining.
“Essentially, in all, our mining is to create jobs for our people and at the same time generate revenue for the government.
“This is not permanent. This should be taken over by the private sector.”
The jewelry move
The minister revealed that, “We are bringing an international expert to Nigeria to train one person per state on the art of making jewelry using our gold.”
60% women participation
“Because of the risky nature of mining gold, the main part women come in is processing. In our processing centers, 60 percent of those that would be employed will be women. 30 percent of those who have registered as processors at the moment are women. We are ensuring that 60 percent minimum of women are brought on board the processing,” Executive Secretary SMDF and secretary of PAGMI Hajiya Fatima Shinkafi said.
Three tones of gold this year
With the new initiative, Shinkafi said that, “We are targeting 3 tonnes of gold by the end of this year and 10 tonnes in the following year.”
Obviously, legitimately mining gold in Nigeria is sure one of the best ventures for any investor.
