As Mines and Steel Ministry sets to embark on Gold Purchase Scheme in 2018
By Michael Peter, The Sight News
Abuja: Following Federal Government’s macroeconomic reforms, there has been an improvement in the nation’s mining investment risk profile.
The Minister of Mines and Steel Development, Kayode Fayemi, who made this disclosure in Abuja on Thursday, noted that reforms in the sector and efforts to make the Nigerian Mining jurisdiction more attractive to investors impacted on Nigeria’s ranking in perception indices in the ‘World Risk Report’, published by the Mining Journal, which indicates that Nigeria has made remarkable improvements in both hard risk and perceived risk factors; making the nation now considered to have a better investment risk profile than several other leading jurisdictions, and among the best in Africa.
The Minister was speaking at his end of year Press Conference, where he reeled out the ministry’s achievements for the year 2017 and the projections for the coming year and promised that the government will continue to work hard to sustain the growth trajectory so far recorded in the sector, in the coming year (2018).
The Minister noted that more efforts will be put into stimulating new exploration activities, increased production from active mining, functional (and expanded) processing and refining capacity, and higher value-addition in exports; resulting in massive creation of thousands of direct jobs and potentially hundreds of thousands of indirect jobs.
While pointing out that the mines and steel sector contributed immensely in the economic recovery this year, Dr Kayode expressed optimism that the sector will contribute to building a strong and diversified economy in 2018.
“Consistently in 2017, the Mining sector featured in the story of our journey to economic recovery and consolidation. For example, in reporting the GDP figures for second quarter 2017, the Nigerian Bureau of Statistics indicated that the economy grew by 0.55%, largely attributed to improved performance of not only the Oil and Gas sector, but other economic activities like mining.
“The Mining sector grew by 2.24% in that quarter. Consolidating on our feat of achieving a 300% increase in revenue (royalties and fees) between 2015 and 2016, we steadily progressed in 2017, and as at November of this year, the sector had already surpassed the entire revenue of about N2Billion generated for the whole of 2016, with over N3.5 Billion naira contributed to the federation account so far”.
“The Mining sector remains a critical factor in the implementation of the Economic Recovery and Growth Plan (2017-2020) which projects that the minerals and metals sector would be one of those to drive Nigeria’s recovery by growing sectoral contribution to GDP from N103 billion (2015) to N141 billion in 2020, at an average annual growth rate of 8.54 per cent.
“To create wealth, we recognize we need to improve on beneficiation as wealth only comes from creation. We recognize the vast value chain of Mining as a potential source of entrepreneurial activities, wealth creation, and jobs creation in Nigeria”.
Fayemi, in disclosing that the sector experienced increased participation of enablers, also revealed that plans are underway to assemble a $600M investment fund for the sector, working with entities such as the Nigerian Sovereign Investment Authority, the Nigerian Stock Exchange and others.
He noted that one of the key projects to be embarked upon in 2018 by the Ministry in partnership with some state governments and the private sector is a Gold Purchase scheme; saying that the mandate of the scheme will include equipping of the artisanal miners; provision of extension services; and the off-take of all the gold produced by the participants in the scheme.
“The aim is to facilitate employment creation, poverty reduction, and increase in revenue to the federation account.
Towards the accomplishment of this presidential mandate, the FMMSD has extensively reorganized the Mining Inspectorate (MID); and Artisanal Small-Scale Mining (ASM); departments and set up an Investment Promotion and Mineral Trade department (IPMT). A Special Purpose Vehicle (SPV) would be licensed by government to manage the gold purchase scheme”.
“Also, in 2018, our ministry would undertake extensive Electromagnetic Airborne Geophysical Survey of promising parts of the country. We aim to work with competent consultants to deploy logistical and technical equipment with radiometric, magnetic, electromagnetic and allied capabilities, to capture and provide analysis of the geology of Nigeria, and the mineralization of the areas covered. We are also working towards the completion of the equipping of the NGRL, as well as the completion of our National Mineral Database, and will, in collaboration with the China Geological Surveys conduct an extensive geochemical mapping programme across the country”.