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Zamfara establishes its first gold reserve

The Governor disclosed that the gold was entirely mined and refined by local artisanal miners in the state.

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Buhari presented with gold bars mined in Zamfara as Nigerian prepares to launch PAGMI scheme.

Zamfara State Government has established the first of its kind gold reserve in Nigeria, starting with 31 kg of processed gold, that will be deposited in a bank.

The Governor of Zamfara state, Bello Matawalle disclosed that the gold was entirely mined and refined by local artisanal miners in the state.

Commenting on the motive behind the project and its prospects, Matawalle revealed that the decision to undertake and fully establish the project is driven by economic and social considerations that the project will have on the indigenes in the state and country at large, both at present and in the future.

READ: Nigeria to lift ban on Zamfara solid mineral mining by Q1 ending 

“My administration will subsequently continue to buy gold from our local miners so as to gradually improve the reserve.

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“Even though our state, like other states of the Federation, is grappling with competing demands from the public, the resources at our disposal are meagre. We feel it is of utmost significance to invest in the future of our people.

“The establishment of the gold reserve, therefore, is part of the relentless efforts by my administration to diversify the state’s economy by exploring all potentials of the state, and maximally utilizing them for the benefit of both the present and future generations.”

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In the opinion of the governor, the reserve had a relatively better Returns on Investment (ROI) when compared to financial equities such as Stocks. He emphasized the need to diversify the economy, citing the recent collapse of the oil market as justification to diversify into the Solid minerals sector.

Why it matters

Given the present FG’s drive to diversify the economy, this development is a welcome idea and in line with the goal. It has great potential for increased employment generation, higher IGR, savings of hard-earned forex, and other spillover effects on the economy.

1 Comment

1 Comment

  1. Biodun Idowu

    October 8, 2020 at 9:10 pm

    Should a State own any mineral resource such as gold when petrol is controlled by the Federal Government?

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Commodities

Nigeria’s $1.5 billion steel plant set to produce 1 million MT of steel annually

Nigeria nears steel independence as $1.5 billion steel plant in Kaduna is set to produce 1 million MT of steel annually.

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Nigeria's $1.5 billion steel plant set to produce 1 million MT, FG earmarks over N190 billion for road construction in the 6 geo-political zones by 2021, FG approves $3.1 billion for automation of Customs, targets $176 billion revenue, Nigeria close to securing $3 billion World Bank facility, Budget deficit, ECOWAS economy grows by 3.1%, expected to hit 3.3% by end of 2019 , Dangote Refinery would help save $10 billion in forex - FG,, FG monitoring ‘Eco’ adoption by ECOWAS members amidst threat to Naira, FG suspends plan to obtain $22.7 billion loan

The Federal government of Nigeria has disclosed that it is expecting an annual output of one million metric tonnes of steel from its $1.5 billion steel plant in Kaduna.

This was disclosed by the Minister of Finance, Budget and National Planning, Mrs Zainab Shamsuna Ahmed while inspecting the steel plant facility at the African Natural Resouces and Mines Limited in Kaduna.

READ: Why Ajaokuta Cannot Make Steel

READ: CBN restricts forex for milk import to Nestle, Chi, Friesland, 3 others

According to The Punch, Mrs Zainab Ahmed during the inspection of the facility said that the $1.5 billion steel plant which is now nearing completion, would produce one million metric tonnes of steel annually. She emphasized that the facility is critical to the nation as it is tactical to the looming steel revolution in Nigeria.

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READ: Maize Scarcity: Premier Feeds, Crown Flour, 2 others import 262,000MT of Maize

What you should know

The $1.5 billion steel plant built by African Resources and Mines Limited, a subsidiary of African Industries Group (AIG) is at an advanced stage of completion.

The plant which is billed to commence the first phase of production in the mining of Iron ore, and production of Direct Reduced Iron in a matter of months is expected to produce one million metric tonnes of steel annually.

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(READ MORE:FG to provide support to Aviation investors)

Why this matters

This development is expected to resuscitate Nigeria’s steel industry which has been lifeless for a while, and help put an end to the importation of steel in Nigeria. This will also reduce the pressure on the Nation’s foreign reserve, and bolster the foreign reserve of the country.

It is expected to boost domestic steel production and attract foreign investors’ participation in the industry, especially auto producers around the world.

However, the facility will create employment opportunities for Nigerians both directly and directly and indirectly.

READ: House of Representatives oppose concession of Ajaokuta Steel Plant

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What they are saying

Alok Gupta, the Group Managing Director of AIG, said the firm would be mining iron ore to produce direct reduced iron, which would enable the company to produce higher-grade steel more efficiently.

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He explained that the investment by the company in the Nation’s steel industry will dramatically increase domestic production, and this will have multiple effects on the Nigerian economy.

READ: CBN moves to reduce cassava derivatives import worth $600 million  

READ MORE:FG slashes 2020 budget by N318 billion, sends to NASS

The Minister of Finance emphasized that the recent investment in the steel industry by AIG which is about to yield gains both for the company and the economy will attract the auto industries of the world to come into Nigeria and produce cars in Nigeria for Nigerians, and other countries in West Africa.

READ: Kachikwu advocates refineries repair as petrol landing cost reaches N180 per litre

Bottomline

The investment of AIG in the steel industry is expected to drive the country towards steel independence, and pave the way for Nigeria’s steel revolution and the development of the automobile industry in the nation.

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Commodities

Gold prices under pressure, U.S dollar ticks up

Gold remained under pressure at the pre-opening of London’s trading session on Monday.

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Gold remained under pressure at the pre-opening of London’s trading session on Monday. The pressure seen on the precious metal is largely attributed to the U.S dollar rebounding and expectations growing for the U.S. Congress passage of the latest stimulus deal ahead of the Nov. 3 presidential election.

At the time of writing, gold futures prices traded around 1,905/ounce remaining above the $1,900/ounce. The U.S dollar Index was steady in Asia’s trading, up 0.8%.

U.S speaker, Nancy Pelosi, has set a Tuesday deadline for its lawmakers in passing the deal and is hopeful that such a deadline could be met. President Trump also renewed an offer to increase the stimulus deal package.

READ: Gold prices up as U.S dollar value drops

Quick Fact: Global Investors buy the hard safe haven asset mainly to hedge against inflation and for wealth preservation.

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  • Humans are emotionally and physically drawn to gold.
  • Gold traders, global investors also consider buying gold as a way of diversifying risk, via using futures contracts and derivatives

In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on major prevailing fundamentals affecting the precious metal’s prices.

READ: Gold prices shoot up, U.S dollar drops

“Gold prices were pushed down to US$1,900/ounce on Friday, primarily by good retail sales data, which showed sales rising 1.9% m-o-m, above expectations of 0.8%.

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“That would seem to suggest that gold could be sensitive to the degree regarding more or less monetary accommodation from the US Federal Reserve, where more robust data will elicit a less dovish response from the central bank.

READ: Ripple owners say XRP will be worth $100

Near term, direction defaults back to the US dollar and US equity market movement. Gold has found a friend in the Yuan, which is holding the US dollar “safe -haven “ambitions in check.

Fiscal policy support has been a critical support factor for gold, and if there is one sure thing, the stimulus is coming.”

READ: London Stock Exchange seals $5billion Borsa Italiana sale

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Commodities

Crude oil prices end mixed W/W, oil traders grow wary

Crude oil prices ended the week mixed cumulatively amid surging Covid-19 caseloads.

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global oil market, Bonny Light and Brent crude oil, Arthur Eze, Nigeria cuts crude oil production to 1.77mbpd, Nigeria wants international oil companies to pay up now , OPEC+ deal gets a boost as Russia and Saudi Arabia consider further output cut, 4 key reasons why Brent crude might slip back to $35 per barrel, How substantial is compliance for the Oil market?

Crude oil prices ended the week mixed cumulatively amid surging Covid-19 caseloads, as oil traders pondered on what direction crude oil prices will go.

What we know: American-based oil contract, West Texas Intermediate closed at $40.88 per barrel, gaining 0.7% on the week, although it should be noted that it dropped 0.2%, on Friday.

READ: Oil prices drop, currently on anemic demand

  • British-based oil contract, Brent crude, the popular standard for oil benchmark, however, dropped for both the day and week.
  • Brent Crude prices settled on Friday to trade at $42.93 per barrel, down 0.5%. For the week, the global crude gauge lost 0.2%.

The mixed result in crude oil prices is coming amidst a spike in COVID-19 cases across emerged markets that continue to weigh down on oil traders, as it is believed that the virus has curbed demand in two of the world’s biggest crude oil consuming areas.

READ: Bitcoin robbers transfer part of Bitcoin loot worth $1.4 billion

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OPEC+ plans to reduce its current supply cuts of 7.7 million barrels per day (bpd) by 2 million bpd in January, as OPEC Secretary-General Mohammed Barkindo admits that fuel demand is looking “anemic.”

A technical committee of the OPEC+ some days ago expressed their concerns over rising oil supply, since reduced human mobility aimed at limiting the spread of COVID-19 has also curbed fuel usage.

In an explanatory note to Nairametrics, Stephen Innes, Chief Global Market Strategist at Axi, spoke on his outlook for the fragile energy market.

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READ: Apple drops 2%, iphone 12 not exciting

“But the tail risk is how lawmakers deal with this Covid-19 surge and the way consumers interact remains the wild card.

“While a return to draconian confinement measures is unlikely, the most prominent threat to the economic recovery is fear of the virus, not necessarily the soft lockdowns or social gathering restrictions.

“It is fear that could keep people hunkered down until the curve flattens or the vaccine is available. And It could sound a significant downbeat to the economy.”

That said, energy consumption is starting to kick up huge in the world’s second-largest economy China. Such macro is expected to keep crude oil prices far above levels seen in April.

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