BusinessDay

Investment in the gold sector has never looked better in Nigeria – Akintola

Akin Akintola, chief technical officer, Dukia Gold & Precious Metals Nigeria Limited in this interview with John Osadolor, speaks on the launch of the first indigenous gold refining firm in Nigeria, issues in the gold sector and how the company plans to change the game in the mining sector.

What does Dukia Gold Precious Metal and Refining Company do?

Dukia Gold and Precious Metal Refining Company Ltd is a licensed refiner of gold and other precious metals. We are a duly authorized gold and precious metals dealer, in Nigeria and in Sub-Saharan Africa. We source, aggregate, refine, buy and sell gold and other precious metals; and we generally deal in precious metals, especially gold within our articulated ecosystem. This ecosystem spans various activities including, but not limited to precious metal laboratories, provision of relevant infrastructure, rural and urban mining, beneficiation, logistics, vaulting and so on.

How is Dukia Gold different from other refiners?

Our vision for the precious metals industry not only in Nigeria but in Africa makes us unique. We are not just a precious metal aggregator.In addition, we provide services across the precious metals value chain, right from the mines, through the process of beneficiation, that is, services to improve the quality of client metals up to the trading (buying and selling) of metals and we also offer other services like vaulting. I need to emphasize however, that our primary focus is the sourcing of raw gold in bulk volume, increasing the purity of the gold, refining the dore to investment gold purity grade and then trading the gold/ engaging in the supply of investment grade gold products to discerning customers. Dukia Gold certainly identifies with other gold sector operators in the industry, because we believe our role is complimentary and we are all in this together.

Will you say, Dukia Gold PM & Refining Co is a ‘pioneer’ Company within the precious metals value chain?

Yes, I will say so. Our vision and strategy, alliancesand achievements so far make us pioneers in several ways. Some of these are in the pipeline and some are already in the public space. We are on track to be the first licensedoperating refiner in Nigeria & once accredited, will be the first LBMA accredited & OECD compliant refiner in Nigeria. As pioneers in this sector, in Nigeria, DukiaGold has been involved with and participated in a number of important initiatives that have created a foundationfor the growth of the industry. And we believe that the mining industry is now primed for accelerated growth. The future, we believe, looks very good, and the sector narrative is positive.

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Nigeria’s Gold sector

What are Dukia Gold PM & Refining Company’s objective and plans for the sector?

The objectives of Dukia Gold include the provision of necessary heavy infrastructure and financial investments to drive the sector. We are pioneering the introduction of cutting-edge technology, particularly block chain and materials inspection labs.We would make these available to industry players, both large and small. For example, our urban mining centers are able to offer services to retail players in line with global best practices. And again, this is with special references to the LBMA, OECD and the World Gold Council standards, which is very important in the international market. Dukia Gold is positioned for recognition, licensing, and certification by these agencies. And we believe that we areinstitutionalizing the pathway to prosperity for all stakeholders from the bottom up.

What specific dimensions is Dukia Gold PM & Refining Co bring into the value chain?

Dukia Gold is playing a key role in buildingthe required structure to supportthe gold value chain in Nigeria and our commitment to this objective remains firm. We believe that our timing is fortuitous, as investment in the gold sector has never looked better or more promising than it currently does.

The Dukia Gold ecosystem is literally a bottom-up system which has been seven or eight years in the making. In dimensioning the industry, it is important to note that several points of mutualized dependencies are critical; from artisanal and cooperatives, all the way up to the policy articulation for an emergent critical sector. Jobs are being created and we have seen convincing corporate social responsibility practices being implemented. Another dimension to note is our strategy of enablement which has at its core the empowerment of small-scale miners who provide feedstock to community schemes.

Apart from delivering refreshing modernization, our close collaboration with raw material providers and governmental institutions contribute to the articulation of policy and sectoral practices. You may want to be reminded of the origins of Dukia Gold in the Focus Labs of the Federal Government, and its Economic Recovery and Growth Plan (ERGP).

For the average person on the street who is hearing about Dukia Gold for the first time and does not know how to reach you, what is the process of getting to you?

I mentioned that Dukia Gold ecosystem covers the full spectrum from mines to the market.

Firstly, within that ecosystem, miners and junior miners can collaborate with us. We have a program that will enable them enter into formal contracts with us, for the purchase of products from their mining activities.Also, within urban areas, we have buying programmes, and we are setting up buying centers all over Nigeria.

Could you tell us where the buying centers are and the processes involved? What are the requirements to be satisfied?

Dukia Gold is about creating a structure which allows the Nigerian economy to drive growth and wealth through the gold value chain. What does this mean? We are opening up a marketplace for gold that is mined, or recycled gold that is purchased through our buying centers. These products become raw material for our refining process, and the refined gold, which is at their highest purity is then available to be sold as investment grade good delivery bar in the world market; allowing Nigerian gold to command the necessary premium for a good delivery bar. Now, that is the ultimate and that is what Dukia Gold is all about; to supply investment grade gold good delivery bar to the market and facilitate Nigeria’s participation in the gold market at global level. Playing at that sort of level makesDukia Gold unique. Currently, people go and buy gold from local aggregators and those aggregators, basically just sell to others. We will source those raw materials as well, but in sourcing, we will comply with the LBMA and OECD Guidelines which ensure that we obtain proper KYC and Provenance documentation from Customers. As I earlier said, we are setting up buying centers all over the country. In Lagos, we currently have buyingcenters on the mainland, and on the Lagos Island.

When dealing with any Dukia Gold buying centers, what will be customer experience be like?

The essence of those buying centers is to cater for what we refer to as the retail side of our sourcing programme, where individuals can take their old-fashioned jewellery into our buying centers for sale. At our buying center, customers would be registered, they would have to pass our ‘know your customer’ (KYC) processes as this is a critical compliance requirement. And while the customers are at the buying center, the recycled gold will be assayed. Assaying means that we will test the material and let the customer know the quantity of gold and the purity of gold that is contained in the lot size, as a basis of agreeing a price based on the carat (which is a measure of purity) of the material they have offered us. Please note that we will offer pricesthat are in linewiththe global market gold price for the day. This makes our transactions transparent in contrast with what currently happens where the pricing is not transparent.

Our urban mining centers form just one part of our sourcing Programme. In the rural areas, Junior miners, aggregators or cooperatives can also approach our buying centers, or they can call us, and then we will send our geologists who would already have known them, because everybody that we deal with must be registered with us. Normally, once they’re registered and we’ve accredited them, they will be given a loyalty card, which tells them that they are a member of our club, and because they belong, they will be given the support that allows them to produce in an OECD-compliant manner, following world standards. Our geologists will be able to tell them the purity of what they’ve got, and we will be able to agree transaction terms.

What other sourcing streams do Dukia Gold have?

Other ways by which we source is that we buy from aggregators, who want to sell, thus allowing us to add value in-country, rather than just send raw gold out of the country. This is a value add that hitherto did not exist in Nigeria and this is one of the benefits the Nigerian government envisaged when the license was granted to Dukia Gold. So we are hoping that by covering both what I call the retail end of the market through our urban mining programme; and the wholesale side of our business through the rural, and other procurement buying processes, we would have covered and opened up this market in a structured mannerand will establish Nigeria as a player in the world market when it comes to trading gold and other precious metals.

Now, how are we going to achieve this? As you know, we are in a hugely capital-intensive sector, which means we would require funding from time to time, not only for working capital, because we have investment projects to execute, but also because we have an aggressive buying Programme, to fund our refining plants. As part of our initiatives going forward therefore, we are working on coming to the market with various investment products, which will appeal to different sectors of the investing market including investors with appetite for gold as an investment asset.and very soon, you will hopefully be called back when we list.

I would just add that the Dukia Gold buying centers are very secure and very professional. We have very high quality equipment, so our clients are always going to get a very high level of service, whether as individuals, or as artisanal miners. Everyone will have a best-in-class customer experience which will set a high level of service standard for our sector..

What are Dukia Gold future plans for expansion of the gold sector in Nigeria?

One of the key projects we are currently working on is our refinery in Abuja. In the interim, whilst this project is ongoing, we have an arrangement with a major refiner in the UK, who we currently use as our tolling plant. This arrangement facilitates the refining and trading of precious metals from Nigeria and which in turn provides a business case for the local mining industry.

 

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