• Thursday, March 28, 2024
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BusinessDay

Nigeria targets $675m annually from tax, royalties, FX accruals from gold mining

Gold mining

The Nigerian government on Tuesday expressed optimism that the Presidential Artisanal Gold Mining Initiative could help it realise on a yearly basis an average of  $150 million in taxes, $25 million in royalties, and additional $500 million accretion of foreign reserves.

The government expressed high confidence that the initiative would result in the creation of over 500,000 new mining and formalised jobs, leading to poverty reduction to more than 1 million households.

Olamilekan Adegbite, Nigerian’s minister of mines and steel development, gave this information while briefing newsmen.

The minister said the Federal Government, working with the private sector, is already getting ready gold refinery plants in Ogun and the Federal Capital Territory, Abuja, to help local miners as well as generate revenue for the government.

He said the ministry is already spearheading safer mining training through extension services for artisanal miners which would enable them work with basic geological data to avoid environmental degradation and formalise their operations.

Adegbite said that artisanal gold miners would earn more from higher productivity, better recovery rates, mechanisation of operations, and better access to reliable geological information.

He said increased earnings for the miners would have significant spillover effects in the local economies as businesses would grow to cater to the increased consumption of households.

Nigeria, it would be recalled, in June produced, for the first time ever, artisanally mined gold that has been processed and refined according to the London Bullion Market Association Standards required for the use of gold as a reserve instrument by the Central Bank of Nigeria.

This means that the CBN will be purchasing gold that has been mined, processed and refined under the Presidential Artisanal Gold Mining Development Initiative for use as part of Nigeria’s external reserves.

Fatima Shinkafi, executive secretary, Solid Mineral Development Fund, told BusinessDay on the sidelines of the briefing that the government is also looking to capture market share of $3 billion to grow the local gold market.

She noted that the risk appetite for mining gold would expand opportunities for banks to come into the business, noting that the government would support willing banks with technical capacity to come into the business and support artisanal miners.