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Nigeria expects gold mining reforms to bring in US$500 million a year

President Buhari of Nigeria says the reforms have made artisanal mining legal and will create buying centres and tax trade in gold

Nigeria hopes changes it has made to gold mining regulation will earn the government US$500 million a year in royalties and taxes and create 250,000 jobs, President Muhammadu Buhari has said.

The reforms have made artisanal mining legal and will create gold buying centres and tax trade of the precious metal, Buhari said in a statement.

“These operations will help in diversifying our revenue base,” the president said.

Nigerian officials have said illegal mining, prominent in the north-west, has fuelled widespread violence they attribute to “bandits”.

Thousands of people have been killed in the region in recent years and swathes of the region are inaccessible.

The military are deployed to tackle the insecurity but the conflict shows few signs of ending.

The additional revenues from gold could be a lifeline as the coronavirus pandemic and resulting global oil price crash has cut off much of the state’s income.

Buhari said the country has lost $3 billion in total from 2012 to 2018 because of illegal gold mining.

Gold refineries

In February, Nigeria licensed two gold refineries mainly to produce gold for the central bank to hold in its reserves but also for export. President Buhari received the country’s first locally produced gold bar on Thursday.

Minister of Mines and Steel Development Olamilekan Adegbite told reporters in Abuja that licences had been issued and the Central Bank would be the main offtaker, holding some of the gold in its reserves.

“We have licensed two refineries in Nigeria. They will refine gold and, of course, produce bullion that the CBN [Central Bank of Nigeria] can buy at international prices,” he said.

He said one of the refineries is located in Abuja, which sits at the centre of the country, and the other is in the south-western state of Ogun.

Nigeria has largely untapped deposits of 44 minerals, including gold, iron ore, coal, tin and zinc, in more than 500 locations, but mining accounts for just 0.3% of the economy.

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