Report on Interest
under logo

FG to establish gold refineries, targets $500m annual royalties

By Idowu Abdullahi

President Muhammadu Buhari has disclosed that plans are being concluded to establish gold refineries in Nigeria, saying improved gold mining operations in the country will create no fewer than 250,000 jobs and generate over $500 million annually in royalties and taxes.

He said the refineries would support his administration’s efforts at creation of jobs for Nigerians, diversifying the revenue base, and improving foreign exchange reserves.

The President noted that the establishment of the refineries was part of the apex government’s commitment to combat illegal mining activities and reduce the incidence of revenue being lost to illegal mining activities as against the $3 billion lost between 2012 and 2018 due to illegal smuggling of gold.

Buhari, according to a statement by his spokesman, Femi Adesina, disclosed the plan at official presentation of locally mined gold bars by the Presidential Artisanal Gold Mining Development Initiative (PAGMDI).

He noted that in addition to the potential revenue gains that will occur from mining operations, efforts are being made to enable the setting up of gold refineries in Nigeria.

Buhari expressed optimism that these measures would lead to the creation of additional job opportunities across the gold value chain and also help the nation capture the additional value created from the gold refining process.

‘‘With the implementation of the PAGDMI scheme which will result in the set-up of accredited gold buying centers across key mining areas, artisanal miners and SMEs engaged in mining will be able to capture the value of their work. These operations will help in diversifying our revenue base. The sale of gold by artisanal miners and SMEs at accredited centers will help the government in realizing royalties and taxes from the sale of these assets.

‘‘These developments will also help in improving our foreign reserves by enabling the Central Bank of Nigeria to increase the amount of gold in its reserves. These gold assets which will be purchased in Naira, will not only help to bolster our international reserves, it will also provide a hedge against inflation and other economic volatilities associated with foreign currencies that are held in our reserves,’’ the President said.

He said the impact of COVID-19 and the containment measures designed to slow the spread of the virus, had led to a slowdown in global growth, which is projected to decline into negative territory for the first time since the Great Depression.

‘‘It has also led to a 40 percent drop in crude oil prices. In Nigeria, the drop in crude oil prices has had a significant impact on government revenue, as well as on our foreign exchange earnings.

‘‘In responding to this challenge, it is therefore paramount that we strengthen our efforts at implementing policies and programs that will enable a greater diversification of the Nigerian economy. Enabling investment in the Solid Mineral sector is a key part of the government’s economic diversification program.

‘‘Given our current estimated gold reserves of over 200m ounces, most of which have not been exploited, developing sustainable programmes that will catalyse increased investment in the extraction and refining of gold sourced from mines in Nigeria, is indeed vital,’’ he said.

Leave A Reply

%d bloggers like this: