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Business News

Nigeria to begin gold production in 2021 with the Segilola Gold Project

The gold produced is expected to become a part of Nigeria’s external reserve.

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Nigeria to begin gold production in 2021 with the Segilola Gold Project, Nigeria to save $300 million from importation of barite 

Nigeria is set to commence gold production in 2021 after the launch of the Segilola Gold Project in Osun state. This was disclosed by the Honourable Minister of Mines and Steel Development, Olamilekan Adegbite, while taking stock of his first year in office as Minister.

In a statement signed by his Special Adviser on Media, Ayodeji Adeyemi, Adegbite said that the project is expected to create about direct 400 direct jobs and 1000 indirect jobs along the gold value chain.

READ ALSO: Why Ajaokuta Cannot Make Steel

He added that once the project takes off, Nigeria would become a major gold producing country, a move that would hasten the diversification of the economy and reduce unemployment among the youth populace.

He noted that the government was creating an enabling environment across the gold value chain. According to him, “the international roadshows we have had in the past have borne fruits. Today we have Thor exploration in Osun State through the Segilola Gold project, which is projected to start producing in the first half of next year.”

The minister also noted that the government has licenced two gold refineries to refine gold to the London Bullion Market Association, LBMA, standard.

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About the Ajaokuta Steel Plant, Adegbite explained that the global travel restriction caused by the pandemic had prevented the technical experts from Russia from coming over to the plant to conduct an audit of the steel plant. He assured that this would be done as soon as the flight restriction was over, and there are hopes to revive the plant before the expiration of President Buhari’s tenure.

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Why it matters

The take-off of gold production in Nigeria is expected to open up an industry centred around gold production, from equipment leasing and repairs, logistic and transport. Note that gold requires a specialized means of transport, security, insurance, aggregators among others. These, according to Adegbite, would ultimately create tens of thousands of jobs across the gold value chain.

READ ALSO: Mambilla Plant: FG disburses N700 million for power project

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The minister further stated that Nigeria has mined, processed, and refined gold under the Presidential Artisanal Gold Mining Development Initiative, PAGMI. The first batch of PAGMI gold was unveiled at a presentation ceremony to President Buhari on July 16, 2020.

The gold produced is expected to become a part of Nigeria’s external reserve after being purchased by the Central Bank.

“PAGMI will result in the creation of thousands of new mining and formalized jobs, leading to poverty alleviation for many households. Under the scheme, artisanal and small scale gold miners will earn more from higher productivity, better recovery rates through mechanization of operations, and better access to reliable geological information,” he said.

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Ruth Okwumbu has a MSc. and BSc. in Mass Communication from the University of Nigeria, Nsukka, and Delta state university respectively. Prior to her role as analyst at Nairametrics, she had a progressive six year writing career.As a Business Analyst with Narametrics, she focuses on profiles of top business executives, founders, startups and the drama surrounding their successes and challenges. You may contact her via [email protected]

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Real Estate and Construction

Why rents increased by 60% in Lagos, border towns

Factors responsible for the hike are rising cost of building materials, lack of transparency between asking and achievable prices.

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Rents across Lagos (Mainland and Island) and Ogun State have increased by over 60% between December 2020 and April 2021.

Findings by Nairametrics revealed that while rent had increased by over 30% in some Lagos border towns like Sango-Ota, Arepo and Magboro, property owners across Yaba, Magodo, Ikoyi, and Lekki axis also inflated their rents by about 33% within the same period.

For instance, rents for one-bedroom (self-contain) and two-bedroom apartments, which are the most sought after in Magboro (one of the Lagos border towns) have increased from an average of N120,000 and N160,000 to N200,000 and N260,000 respectively. This represents a 33.33% and 30% increase respectively.

Similarly, rents in some key areas in Lagos Mainland are not cheaper. In Magodo phase 2, property owners charged between N1 million and N1.2 million for a 2-bedroom apartment, but now, a potential tenant is required to pay between N1.3 million and N1.56 million as rent (depending on how old the house is), an increase of approximately 30%.

Though rents appear relatively cheaper in Surulere, especially around Aguda, they also increased within the period under review. While rent on two-bedroom apartments and three-bedroom in Aguda has gone up from N850,000 and N1 million to N1.2 million and N1.4 million respectively, around Ogunlana drive, two-bedroom apartments that were let out at N950,000 now cost about N1.2 million.

Meanwhile, rents around the Lekki axis have also gone northward, as new tenants are forced to pay more before occupying houses. A 4-bedroom semi-detached house without boys quarters in Lekki Phase 1 and Ajah, which used to cost N3.8 million and N2 million, has risen to N4.5 million and N2.5 million respectively.

In Sangotedo, rent on three-bedroom flats has also increased from N1.2 million as of December 2020 to N1.6 million.

Why the rise?

Industry experts, who spoke with Nairametrics in separate interviews, explained that there are several factors responsible for the development and agreed that some of the reasons are not fundamentally strong.

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Paul Bamigbola, Chairman, Nigerian Institute of Estate Surveyors and Valuers (NIESV), Lagos Chapter, told Nairametrics that a significant factor responsible for the hike is the rising cost of building materials.

According to him, property owners now spend more to build houses, as the cost of cement, iron rods, sanitary wares and tiles, among others, have all risen significantly.

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For instance, the cost of steel, which was sold at N234,000 per tonne as of March 2020, had increased to N380,000 at the end of March 2021. This represents a 62% increase within the period under review.

Dangote Cement increased from N2,600 to N3,800 (though it is sold at N3,600 in some areas in Lagos), Lafarge Cement and BUA Cement increased from N2,400 and N2,250 to N3,600 and N3,250 respectively within the same period.

Bamigbola said, “The high cost of acquiring land, including the actual cost of building, also adds to the reasons property prices in Lagos are high.”

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But when our analyst pointed out to Bamigbola that the hike also affected old houses, he said, “To also increase the rents, most of the owners of the old house renovate the houses a little before letting them out. They do that to increase the rent to about N400,000 if the owners of new houses charge N500,000.”

Another factor responsible for the hike, especially in Lagos, is the lack of formal housing. With over 3.8 million households in Lagos, up to 2.1 million households are without formal housing. This presents a supply gap of over 55%.

Chief Executive Officer, Richfield Limited, a real estate company, Samson Odegbami in a recent interview with Nairametrics said, “As typical in every market, excess demand drives up prices. This could make landlords, who frequently get requests for their available spaces, increase the prices and let out or sell the property to the highest bidder.

Estate Intel, in its report, stated that the lack of transparency between asking and achievable prices was also another factor.

It added that the multiple agents and developers involved in marketing properties typically list these properties for significantly higher amounts than what they are willing to accept.

It stated, “We expect developers or agents to aim to achieve the highest possible price, with a window for negotiation, leaving a wider than usual spread between asking and achievable prices.
A large spread between asking and achievable rent makes average market rent seem artificially high and encourages other developers to hold fast on those artificially listed prices, keeping average rents or sale prices high.”

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Bottomline

Based on the experts’ views, the rent prices could be very misleading, especially because most of the properties on the listed platforms in Nigeria are priced well above what is achievable.

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Business News

NCC discloses application requirements for Proof of Concept trial license

The NCC stated that it had been inundated with requests related to trial frequencies for the purpose of verification of certain concepts.

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NCC Building, MTN, Glo, Airtel, 9mobile, NCC, Acquisition, Teleology

The National Communications Commission (NCC) has released application requirements for trial frequencies in certain spectrum brands under the Proof of Concept (POC) Trial license.

This was disclosed on Wednesday, April 14, 2021, in a statement signed by the Director of Public Affairs, Dr Ikechukwu Adinde; and made public on the Commission’s verified Twitter account, @NgComCommission.

The NCC stated that it had been inundated with requests related to trial frequencies for the purpose of verification of certain concepts.

The requirements listed by the NCC include:

  • The PoC trial license application must only be granted to Original Equipment Manufacturers(OEMS)/Vendors, or operators in conjunction with their Original Equipment Manufacturers.
  • PoC trial shall not exceed a period of three months effective from the date of approval.
  • Equipment for Proof of Concept must be ‘Type-approved’ by the Commission.
  • Appropriate Spectrum fees must be paid in accordance with the NCC’s regulations.

In case you missed it

Nairametrics reported that Nigerian telco giant MTN recently announced its acquisition of an additional 10MHZ spectrum in the 800MHz band from Intercellular Nigeria Limited.

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