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Two New Gold Refineries Set to Open in Nigeria

The Nigerian Federal Government has given the nod for two new gold refineries to begin operations in the country. Both companies have recently been licensed to produce commercial quantities of gold for export, government officials have said.

Nigeria’s Minister for Mines and Steel Development, Olamilekan Adegbite, shared information about the newly licensed companies with journalists in Abuja on Wednesday. According to him, they were to be based in the FCT and Ogun State. He said that some of the gold they refine will be held by the CBN in its reserves.

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However, he did not disclose the names of the companies, details about their ownership, or the terms by which they would be operating.

Nigeria had licensed its first gold refinery, run by Kian Smith, a local company, in 2018. The company had initially announced that its refinery would be open for business by 2019; it now says it expects it to start refining gold this year.

Kian Smith’s facility is to be located in Ogun State and will be using ores sourced from states in the southwest, central, and northern regions of the country.

The Nigerian government has become keen on developing the country’s mining sector in recent years, as it battles to diversify an economy that’s heavily dependent on oil exports. It sees the solid minerals sector as a potential foreign exchange generator; the $3 trillion international gold market offers opportunities that indigenous miners could take advantage of.

There are over 40 different minerals trapped in and beneath geological surfaces across Nigeria. Most of its solid mineral deposits remain unexplored.    

The mining sector is also dominated by artisans, many of whom operate illegally. In September 2016, the government had offered tax holidays to businesses in the sector, in the bid to encourage more formal operators to get involved with mining.

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Earlier in February, Adegbite said that the Federal Government intends to raise the mining industry’s contribution to Nigeria’s GDP to 3 percent. Data from the NBS shows that metal ores mining accounted for just 0.01 percent of national economic output in 2019.

Featured image source: Business Day

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Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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