President Muhammadu Buhari has officially presented locally mined gold bars made by the Presidential Artisanal Gold Mining Development Initiative (PAGMI) to the Central Bank of Nigeria for which the apex bank paid the sum of N268m for 12.5kg of gold.
The artisanally-mined gold was processed and refined according to the London Bullion Market Association (LBMA) standards required for the use of gold as a reserve instrument by the Central Bank of Nigeria.
The official presentation is the culmination of 24 months of intense efforts between the solid minerals development fund; Kebbi and Osun States; 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, Ibrahim Gambari.
What exactly is PAGMI?
The acronym PAGMI stands for the Presidential Artisanal Gold Mining Development Initiative, it is a comprehensive artisanal & small-scale gold mining development programme, launched in 2019 to foster the formalization and integration of artisanal gold mining activities into Nigeria’s legal, economic, and institutional framework.
PAGMI has been designed to integrate social, environmental, health and safety, economic, commercial, and technical considerations, into its implementation.
The initiative 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.
How will PAGMI work?
PAGMI will deploy safer and more efficient mining and processing technologies across artisanal mining locations across the country, starting with Kebbi and Osun States as the Pilot States with intervention in Kaduna, Zamfara and Niger States to commence immediately after the Pilot.
Using a centralized offtake 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.
Which States are benefiting from PAGMI?
The main gold producing belt with a history of artisanal workings and exploration activities in Nigeria will benefit from PAGMI. Intervention at artisanal mining sites will take place in Kebbi, Kaduna, Zamfara, Niger and Osun States with Kebbi and Osun States serving as Pilot States. PAGMI will also be setting up gold aggregation centers in addition to supporting licensed buying centers and aggregators with access to financing options, responsible sourcing mechanisms, management and technical expertise including improved testing and processing equipment.
How does this affect me?
PAGMI is expected to create over 500,000 new mining and formalized jobs, thus, 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.
The initiative would also boost national identity management through the biometric registration of thousands of artisanal miners nationwide. About 20,000 miners have already been registered in Kebbi and Osun States. PAGMI will also help bring them into the formal financial sector.
PAGMI will boost productivity and output in the gold mining sector, by deploying safer and more efficient mining and processing equipment and technologies across artisanal mining locations across the country.
Agreements have been reached with Thermo Fisher Scientific and Mettler Toledo, leading producers of gold testing and weight equipment to equip up to 50 buying centers across the country.
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.
PAGMI will allow the Central Bank of Nigeria to purchase locally produced gold in Naira to boost the nation’s foreign reserves. It will also 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.
Effective implementation of PAGMI will help to control the use of lead, mercury, and cyanides. PAGMI will also improve the working condition of artisanal miners, thereby reducing the number of in-pit deaths that are seen on an annual basis.
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. The recorded lead levels, at 23,000 ppm, were more than 55x the maximum acceptable level for environmental lead levels (400 ppm)
Illegal artisanal mining has fueled instability across gold mining regions with intelligence reports confirming a nexus between illicit gold mining and a rise in banditry. For the first time ever, formalization driven by access to markets will give the artisanal gold miners a guaranteed pathway to prosperity. The greater transparency that PAGMI confers on the flow of financing in the sector will help diminish the incentives for criminality.
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