The government of Nigeria has issued licenses to two gold refineries to produce the metal for export. According to the Minister of Mines and Steel Development Olamilekan Adegbite, the Central Bank of Nigeria will be the main off-taker, holding some of the gold in its reserves. “The CBN will buy the gold at international prices,” he affirmed.
“One of the refineries is in Abuja, which is in the centre of the country, and the other one is in the Southwestern state of Ogun,” he added.
Gold mining in Nigeria
Gold deposits in Nigeria are found in Northern Nigeria, most prominently near Maru, Anka, Malele, Tsohon Birnin Gwari-Kwaga, Gurmana, Bin Yauri, Okolom-Dogondaji, and Iperindo in Osun state it is not very dominant in the country.
Gold production began in 1913 and peaked in the 1930s. During the Second World War, production declined. Mines were abandoned by colonial companies, and production never recovered. The Nigerian Mining Corporation (NMC) was formed in the early 1980s to explore for Gold. Lack of fund, and the lure of easier profits from oil production led to its failure. Today, the activity is largely poverty-driven and supports the livelihoods of at least 500,000 people. Partly due to its informality, artisanal mining is associated with many negative externalities such as environmental degradation, crime and health hazards.
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To address these problems, increase revenues from the sector, and attract foreign investment, the government is moving to formalize artisanal miners. The government has undertaken and is currently pursuing a number of important modernization efforts to reach this goal. It has, for example, moved to strengthen the regulatory framework, designed a strategic agenda for the sector, gained financial support from the World Bank, and made attempts to decentralize the mining license application process and enhance existing geological data.
The government, with the leadership of the Solid Minerals Development Fund (SMDF), has also created the Presidential Artisanal Gold Mining Development Initiative and the National Gold Purchase Program with the explicit mission to formalize the sector.