kereman1:
Super story, op just indirectly tell us that he's a writer.

prof2007:
Dark of night was gradually yielding dominance to first light when 75-year-old Yemi Oluwole, a pensioner, took a spot on his veranda. He sat quietly on a sofa, watching forlornly as strangers armed with hand diggers, shovels and buckets stumped along the dusty road that snaked through his frontage to sites they have forcefully taken and converted to gold mining fields in his Itagunmodi village in Osun State.

Oluwole’s expansive farm is one of the hijacked sites, and according to him, the once quiet community has since lost its tranquility to invasion by armed artisanal miners comprising persons from different parts of the country and foreigners alike, including Chinese, Malians and Nigerien nationals.

“Those boys have violated our land and it’s so bad that our traditional ruler was kidnapped and beaten by the criminals before he could escape, yet government folds its hands and watches them steal our assets. When I retired as a civil servant in a ministry in Osogbo, I went into farming to feed my family because my meagre monthly pension is irregular. But everything has gone now; miners have turned our farms to mining fields,” the distressed septuagenarian, who retired into farming about 15 years ago, told our correspondent.

Oluwole is not the only person affected by illegal mining, many others in the community and similar ones have lost their land and livelihoods to the miners.

DEBTS IN THE MIDST OF WEALTH
Meanwhile, inability to pay pensioners promptly is one of Osun State’s economic challenges, despite its enviable gold deposits. The state, like many others endowed with solid minerals, has been enmeshed in huge debts.

As of June 30, 2021, records from the Debt Management Office showed Osun State owed N133.36bn in domestic debt and $90.38m external, as of 30 June 2020. About 2 months ago, Governor Adegboyega Oyetola disclosed the state had no money to finance infrastructure, and his administration had to prioritise payment of salaries and pensions. Sadly, the latter has not even been paid up to date. Yet, migrants are stealing the state’s treasure that ordinarily should turn its fortunes around.

Globally, gold is a treasured, high-priced mineral. In the international market, an ounce of gold, as of Thursday, was about $1,806. According to the 2016 Mining Growth Roadmap by the Ministry of Mines and Steel Development, Nigeria has an untapped 200m ounces of gold, scattered across about 13 states, Osun inclusive. Vice-President Yemi Osinbajo affirmed this figure at a forum in June 2020. Thus, gold alone could fetch Nigeria trillions in dollars, even when the cost of production is deducted.

But for years, government abandoned it and other solid minerals, making it an all-comers affair for illegal and artisanal miners who remit almost nothing to it, while the country battles incredibly low revenue, compelling it to borrow on-stop to the tune of N35tn at the moment, with plans to borrow even more (about N6.2tn in 2022) to finance the budget.

ILLEGAL MINING A NATIONAL EMBARRASSMENT
From Itagunmodi to Igun, Iyere, Igila and other poor, gold-bearing communities in Osun State and Kwali, Daki Takwas, Zugu, Wawan Icce, Yan Kaura and other gold-bearing communities in Zamfara State, and some other states, illegal mining is rife and appears to have come to stay.

President Buhari, Minister of Mines and Steel Development Olamilekan Adegbite, Governors Oyetola of Osun and Bello Matawalle of Zamfara State, and others have condemned the prevalence and involvement of foreigners but nothing has changed.

In addition to those who do it for survival and other economic considerations, some of the miners are believed to be working for top monarchs and government officials, while some security agents protect them on the mining fields. Oluwo of Iwo in Osun State, Oba Abdulrosheed Akanbi, blamed politicians and traditional rulers as sponsors of the miners.

MINING POLICE & MINING BAN
To solve the problem, the President in October 2020 set up a mining police, comprising Inspector-General of Police, Chief of Army Staff, National Security Adviser and others, but one year after, the illicit practice continues unabated.

Even when the President banned mining activities in Zamfara State and declared the state a “no fly zone” due to worsening insecurity, illegal miners simply relocated to Osun State to continue their activities. Instructively, after the ban, two Chinese were arrested for illegal mining. Adegbite later revealed that the miners were working for “Nigerians in high positions of authority” who were mounting pressure on the government to release them.

So far, hundreds of illegal gold miners have been arrested, including some Chinese nationals, but the activity festers like a bad sore. On 4 May 2020 alone, 17 Chinese, 10 locals and one community leader were arrested in Ilesa and Ife areas by Amotekun corps. “The Chinese are the main culprits. Taking gold out of Nigeria illegally is economic sabotage because if you look at the quantum, the value is huge,” Adegbite added.

MASSIVE LOSS OF REVENUE
With the huge revenue the country is losing, Minister of State in the Ministry of Mines and Steel Development, Uche Ogah, advocated capital punishment for culprits. He lamented that private jet owners were aiding gold smuggling.

Sadly, despite volume of activities on mining fields and increasing number of miners, revenue from the sector has remained paltry. Between January and August 2021, Nigeria earned only N2.44bn as minerals and mining revenue, which is less than 1% of N754.16bn received as oil revenue within same period.

Similarly, in 2019, the Nigeria Extractive Industries Transparency Initiative said royalties received from 39 minerals was N2.50bn, with limestone contributing 37.68%, granite 31.31% and gold 0.26%, despite volume of mining activities by illegal miners. The FG revealed the country loses $9bn to illegal mining annually, with little revenue in the sector coming from the 3% royalty paid by few licensed miners.

WHY ARTISANAL MINERS & NOT BIG INVESTORS DOMINATE
Findings by our correspondent revealed that dearth of licensed investors in the sector is largely due to absence of a gold policy and lack of detailed geoscience data that can promote the country’s resource potential, drive investment and help investors make informed decisions.

While many countries, including Ghana, South Africa, Botswana, Democratic Republic of Congo, Guinea Bissau and Asian countries like China and European countries like Russia, have attracted big investors to mine their gold and generating sizeable revenue from the value chain, Nigeria only began the process of coming up with the all-important geoscience data a few years ago.

Director-General of the Nigerian Geological Survey Agency, the agency saddled with the responsibility of generating geoscience data, Dr Abdulrazaq Garba, affirmed that absence of data had made the sector unattractive to big investors. He however pointed out that the National Integrated Mineral Exploration Project, anchored by the ministry and the agency, was among other things, focusing on generating the data.

He told our correspondent in an interview, “You asked why investors are not coming? It is because we didn’t generate our geoscience data in the acceptable format, which is why there is a proliferation of artisanal mining and not the big mining companies. If you don’t have the data, you won’t attract attention. That is essentially what NIMEP is working on providing and our people are on the field already.

“It is an expensive venture but President Buhari is committed to it. If we had started this 10 to 15 years ago, we would have passed this stage and in this time of scarce resources, revenue from that sector would have complemented our revenue, but we depended so much on oil. However, it’s good we are doing it now. Saudi Arabia mines lead, gold and others today because they invested so much of their oil revenue in developing other mineral types. So, if other countries can do it, why can’t Nigeria?”

Garba noted the ongoing process had also helped discover new minerals. “For example, somewhere close to FCT, we were working on gold when we discovered that we have high concentration of wolframite used in toughening steel,” he added. He said if the mineral was found in economic quantity, it would be helpful when Ajaokuta Steel starts operation and could also be exported. In addition to geoscience data, NEITI urged government to expedite action on the proposed national gold policy to arrest further revenue loss and return sanity to gold mining to make it attractive to world class investors.

Also, Vice Chairman, Kian Smith Trade & Co., Ms Nere Teriba, stated that with its huge potential, Nigeria needed a gold policy, adding, “The policy for mining is there and it’s fine. If there is any issue with it, maybe it’s enforcement. The biggest focus for the government should first be the policy for gold.”

NIGERIA’S ENVIABLE MINERAL DEPOSITS
Nigeria is blessed with many minerals, in addition to limestone, crude and a few others already being exploited. Garba revealed that there are about 44 mineral types in 450 locations across the 774 local governments, adding that until their economic quantity was ascertained, they should be regarded as occurrences rather than deposits, even though they have potential for development.

Garba said Nigeria has “very vast” gold with occurrences in Niger, Osun, Kebbi, Kaduna, Kogi, Kwara, Zamfara, Katsina, Kano, Nasarawa and Bauchi states and the Federal Capital Territory, while Wolframite has occurrences in Kaduna, Kano, Bauchi, Niger, Kwara, Zamfara and Nasarawa states same way Lithium has “vast” occurrences and could be found in Nasarawa, Kwara, Kaduna, Niger and Zamfara states.

In Ebonyi, Zamfara, Plateau states, some parts of Benue State and the FCT, there is silver, while Copper associated with minerals like lead could be found in Bauchi, Zamfara, FCT and parts of Nasarawa State. He added, “We also have platinum group elements, cobalt and graphite and from our geophysical investigation, the quality of the graphite we have is good.”

NEITI also added that minerals occurrences in Nigeria include granite aggregate, Laterite, Coal, Shale, Columbite, Tin Ore, Gypsum, Feldspar, Marble, Dolomite, Tantalite, Kaoline, Fluorite, QUARTZ, Basalt, Talc, Manganese, Barites, Zircon, and precious stones like Tourmaline, Topaz, Sapphire, Amethyst and Garnet.

SUFFERING AMIDST PLENTY
Meanwhile, despite being rich in these high-valued minerals, Nigeria has not only left them in the hands of illegal miners, it also spends its limited forex to import some of the minerals. “That is the irony of Nigeria; it imports what it has in abundance and leaves its own resources untapped,” said Dr Akinwumi Adesina, President of the AfDB in his virtual address at the inauguration of Rotimi Akeredolu as governor of Ondo State in February 2021.

For example, Nigeria has huge bitumen deposit – the largest in Africa and one of the largest in the world, but Minister of Works and Housing Babatunde Fashola revealed that government spends millions of dollars to import 0.5m metric tonnes of bitumen for road construction annually.

Adesina noted in the address, “Total value of bitumen reserves in Nigeria could be worth up to $1.5tn, with estimated 16 billion barrels in Ondo State alone. Potential state wealth from bitumen alone could be worth $657bn. The paradox however is that Nigeria spends over N300bn importing bitumen.”

NEITI admitted in its latest report that increased activities in gold mining in recent years did not reflect in production volumes or royalty payments, adding, “Gold has potential to attract foreign exchange for Nigeria. Unfortunately, the mineral has not received the attention it deserves in form of investments. This has been left at artisanal operation and mostly smuggled out of the country.”

While FG’s debt stood at N35tn, the 36 states and FCT that bear the 44 minerals are also enmeshed in debts. Their domestic debts alone was about N4tn as of March 2021, with a state like Zamfara – despite its gold reserve – having N101bn domestic debt as of 30 June 2021 and external debt of $29.64m as of 30 June 2020. In spite of these, governments at all levels are on a borrowing spree to meet their obligations.

Adesina, at the Mid-Term Ministerial Performance Review Retreat organised by the President in October, stressed that the debt issue should be addressed, as he noted that Nigeria’s debt service to revenue ratio was high at 73%.

NIGERIANS PAYING FOR COST OF NEGLECT
The country’s forex earnings have largely been limited to oil revenue accounting for 75.4% of export revenue and 50% of government revenue, which could have been complemented by revenue from solid minerals. Consequently, dollar scarcity has made the naira volatile, pushing the exchange rate to N580 in September. This has however led to high cost of goods, and the impact is severe for many, given the unemployment rate of 27.1% and minimum wageof N30,000 (about $72.9).

Meanwhile, Oyedele noted that the solid minerals sector, if developed, “would provide a source of revenue diversification for the country, including forex earnings to strengthen the Naira in addition to economic development and massive job creation all of which would lead to more revenue for government at all levels.”

IILLEGAL MINING A GLOBAL CHALLENGE
Interestingly, illegal mining is not limited to Nigeria. From Ghana to South Africa, India and several other countries, it is a challenge, but due to regulation and ability to attract major players to the sector, other countries make substantial revenue from mining and it contributes significantly to their GDP.

In 2019 for example, the National Bureau of Statistics report showed that mining and quarrying contributed a meagre 0.26%t to Nigeria’s GDP. In same year, mining and quarrying contributed 12.6% to Ghana’s GDP; contributed 8.2% to South Africa’s GDP and 15.1% to Botswana’s GDP.

The Global Mining Industry Development 2019 Report released by the China Geology Survey under the country’s Ministry of Natural Resources showed that mining contributed over 20% of GDP in over 20 countries, including African countries such as Angola, Democratic Republic of Congo and Equatorial Guinea.

On how Nigeria’s wealth is being siphoned through smuggling, Teriba, who spoke in an interview with CNBC, said government could discourage smuggling by making royalty payable on gold to be commensurate with neighbouring countries, adding that this should be complemented by value addition to gold given the huge demand for products like jewellery by Nigerians.

She added, “If you have Benin Republic and Togo charging 0% royalty, Niger Republic1% and Nigeria 3%, coupled with open borders as a result of ECOWAS treaty, it is regular economics; gold will go to where it is zero per cent.”

NIGERIA, A GIANT MISSING IN aACTION
Despite having huge reserves, Nigeria the giant of Africa, is missing among the big players. Only Ghana, having been able to develop its solid minerals sector, is the only African country among the top 10 gold producers in the world. The World Gold Council in its 2020 ranking released in June 2021 ranked China as the first, followed by Russia, Australia, United States, Canada, Ghana, Brazil, Uzbekistan, Mexico and Indonesia.

Interestingly, Nigeria had a remarkable history in mining, starting with ore mining in 1902, gold in 1914 and coal in 1916, all of which contributed greatly to its development and industrialisation. Specifically, it contributed to construction of its first power plant, rail infrastructure as well as industrial complexes, until things slipped into inertia when government took over mining from foreign companies.

At the moment, only about 4 gold refineries have been licensed in Nigeria, including Kian Smith Trade and Co., Segilola Gold Mining Company, which is listed on the stock exchange for gold mineralisation in Nigeria, and Dukia Gold.

IIN SEARCH OF URGENT & EFFECTIVE SOLUTIONS
Economists and other stakeholders told our correspondent government needs to do more, including formulating right policies and creating investor-friendly environment, if it hopes to generate revenue from the sector.

“Nobody eats potential,” the AfDB president said, pointing out that the insecurity shrinking the investible space should be addressed and the structural bottlenecks limiting productivity and revenue earning potential of the huge non-oil sector removed. “Nigeria should significantly boost productivity and revenues from its non-oil sector,” he added.

But according to a former Minister of Education, Prof. Tunde Adeniran, states should be allowed to tap their resources and pay taxes to the FG. “The constitution that gives the federating units the right to tap their resources and pay taxes to the FG is what we need. These minerals will be properly harnessed for development by the states,” he added.

Speaking on this suggestion as previously canvassed by many other persons, Oyedele said this would help to address neglect of the sector but that more should be done for a definitive impact. He added, “The biggest issue is with respect to ensuring that we have investors-friendly policies and legal framework as well as a safe and secured environment for private sector investors, both domestic and international, to come into the sector.”

Similarly, Teriba stressed need for Nigeria to work on adding value to its gold to maximise revenue. “In Kano market, they have about 20,000 visitors from across West Africa, so the potential is huge,” she said. “From our research, if you go to Italy, Dubai, India, they know Nigerians when talking about Africans who come to buy gold, so the demand is there.”

A political economist, Prof Pat Utomi, shared a similar view. He said Nigeria should be talking about how to add value to its gold as it would generate more revenue and create jobs. He explained a model he believed could work, “We can have an integrated produce and mining city, about 500-hectare estate, which would be focused on mineral beneficiation – value addition.

He stated, “Artisanal miners from several states would go there with their gold. We can locate one or two central processing beneficiation units and add value to them there. Those who want to use the products locally or export would buy from there. You tax the people working in this vast industry and you would generate revenue. That is what we have failed to do. We will make a lot of forex if we adopt this approach because we are adding value to our mineral.”

He stressed that gold was more profitable when value had been added to it, noting that raw gold sold for N100,000 by a miner could be worth $20,000 once value had been added to it. He added, “Chinese and others are taking away these minerals and making huge money from them outside the country, whereas we could have created hundreds of thousands of jobs from that value chain. Government would generate revenue from taxes on the products and on those jobs. That is a lot more than whatever you would get from the raw gold or the stones.”

Meanwhile, the US Agency for International Development warned that illegal and unregulated mining generates billions of dollars in illicit funds for crime, contribute to armed conflict, fund criminal networks, damage the environment and deprive the populace of widespread prosperity they are entitled to. These might continue to be Nigeria’s lot if it fails to quickly sanitise the sector.

SOURCE (abridged): https://punchng.com/illegal-gold-mining-foreigners-steal-nigerias-wealth-amid-dwindling-revenue-mounting-debts/