March 1, 2024

Nigeria losses gold revenue to Dubai – Minister


Nigeria losses gold revenue to Dubai – Minister

Nigeria  losses gold revenue to Dubai – Minister

Oredola Adeola

Nigeria is presently losing billions of gold revenue to Dubai through smugglers  for its lack of technical and human capacity to extract, smelt and refine its gold.  This was the submission  of  the Minister of Mines and Steels Development, Mr. Olamilekan Adegbite, in a recent interactive session with journalists in Lagos.

Energyday gathered from World Gold Council that Nigeria’s Gold reserves  increased to 21.46 tonnes in the fourth quarters of 2020 from 21.37tn in the third quarters of 2020. The priced commodity is measured in ounce (troy) or tonne (Metric). 

According to the Minister, gold is largely deposited in Kogi, Zamfara and other states in the country. He revealed that artisanal miners in these areas, process their gold using the crude methods of smelting which often lead to disaster.

He said, “These artisanal miners usually use local methods of extracting gold. You know, when you find gold you don’t find it in pure form, it comes with a lot of dirt. 

“This action often results in leaching in the water, into their stream and all this undesirable chemicals, and sometimes leading to lead poisoning as witnessed in Zamfara recently.

“We have therefore decided to establish gold smelting plant in the country. We are building a modern gold smelting plant that will ameliorate all this harsh chemicals for them. 

“We have also chosen Kano state as gold souk ( being an Arabic word for market).  Kano has been known for gold trade along the international gold trade routes in West Africa. Kano was part of that route, so we are just trying to bring the whole glory of Kano back by creating a gold souk in Kano.

“In improving the value of the gold after exploitation and smelting, hence we decided to evolve measures to upgrade the gold into door bars. Because of lack of technical know-how in this,  gold in its raw form is then smuggled to Dubai and middle East. 

“Smuggling of gold out of the country has been on for age, but this administration has made provision for the gold miners to pass through official documentation process to obtain export certificate and then pay some royalties to the Government for onward sales to the international market.

“Unfortunately most of the smugglers often smuggle the gold (doorbars) to mostly Dubai.

“What we realise is that if the miners take a gold worth N100,000 to Dubai as a door bar, with that ounce of gold, the buyer in Dubai and the middle east countries will add value to the gold to turn it into jewelry. The jewery are then sold to us in millions of Naira. 

“When this happens we would have lost gold value to Dubai that has converted the gold into earrings,  bangles, necklaces, even cufflinks and other fashionable assets.

“We are losing a lot of value on that. So what we are doing in Kano, essentially is not just a market, we are going to have people in the market who can turn the gold into products. We are training people for this as well and it’s another programme we are going to have this year. 

“Since NIMEP came on board to coordinate data collection, investors  can now have an idea of  the quantum of gold to decide whether it’s worth their time and investment. 

 ” In fact, when we went to Canada last year, before the world was hit with the pandemic and in South Africa in February, these are the data marketed to investors. 

“We are marketing this data to prospective investors. It is not  free; it will be put in a bid auction because we have spent so much money. We need to recoup the money and use  it for further exploration.

“Most of the gold that is used for jewelry is sourced from the door bars. Door bars is about 93 per cent purity. For gold to be converted as a measure of wealth it has to be upgraded to 99.9 percent bullion standard. 

“In August last year, we presented bullion to President Buhari, as a way of convincing the international community of the viability of gold in Nigeria.
We converted that specimen to the bullion level; the bullion is what the CBN or vaults can store. This is the standard at which the value of gold can be quoted on the New York Exchange.

“That one presented to the president was worth about N168 million for 12.5kg. We gave it to the president and the CBN purchased it and did a presentation of the cheque that the CBN governor gave to the president.

“We can improve our revenue base with gold. Putting that bullion in the vault of CBN has increased our foreign exchange reserve. Unfortunately, we transformed the gold in its raw format to bullion in Turkey. 

“Interestingly, we have licensed two institutions. The third one is just recently licensed. Two of these refineries are in Abuja and Mowe, Ogun State. These firms have the capacity to refine gold to bullion standard. “With this, individuals and government can keep your cash in gold, in view of the increasing level of inflation in the country,” he concluded.

The Minister however noted that the price of gold has gone up to about 2200 per ounce at the stock exchange. This according to him, means that bullion sold to CBN at about N168m went up within a few months to about N250 million, at that time.

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