Two new gold refineries to begin operation in Nigeria soon

Two new gold refineries have been licensed by the Federal Government of Nigeria to begin producing the special metal for export. This was disclosed by the Minister of Mines and Steel Development, Olamilekan Adegbite.

The Minister explained that some of the gold produced by these companies will be held in reserve by the Central Bank of Nigeria, CBN.

Speaking to reporters in Abuja, yesterday, the minister further disclosed that the licensed companies would be based in Abuja FCT and Ogun State. Adegbite said:

“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.”

According to Reuters, the minister did not disclose further details about the names of the companies for instance, or the actual terms and conditions of their engagement in terms of revenue sharing.

[READ MORE: Financial Inclusion: CBN licenses 15 mobile money operators)

It should be noted that this is the first license the Nigerian Government is issuing since 2018 when Kian Smith Trade & Co was licensed to produce gold. The indigenous gold company, which initially planned to fully begin operations in 2019, said it now expects to commence this year.

As Nairametrics earlier reported, Kian Smith Trade & Co had projected that its refinery would start with a production capacity of three tonnes per month of 99.99% gold and one tonne per month production of 99.99% silver.

Nigeria’s gold rush

The Nigerian government has recently demonstrated a keen interest in its abundant solid minerals, particularly gold. Recall that earlier this month, Adegbite disclosed that the government was working towards ensuring that the mining industry starts contributing about 3% of the country’s gross domestic product (GDP) by the next five years.

At the moment, the sector accounts for a mere 0.3% of Nigeria’s GDP. Artisans have mostly taken advantage of the large deposits of solid minerals by engaging in illegal mining operations and pocketing the proceeds. An earlier article by Nairametrics noted that about 80% of the solid mineral mining in Nigeria are carried out illegally.

On a monthly basis, about 500 kg of gold is reportedly smuggled out of the country into neighbouring countries like Niger and Togo from where the raw materials find their way to the Middle East.