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Osinbajo praises reforms in mining sector, links it to 26.7% revenue growth

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Vice President Yemi Osinbajo has lauded reforms which have increased the contribution of revenue from the mining sector to the Nigerian economy by 26.7 per cent.

The Vice President who spoke at the just concluded 5th Annual Nigeria Mining Week with the theme: ‘Top Seven Reasons to invest in Nigeria’s Mining Sector’, said the sector has several incentives for would-be investors.

“It is significant that within the space of a year, we have recorded a 26.7 per cent increase in revenue generation from N2.559billion in 2019 to N3.242 billion in 2020,” he said.

Osinbajo noted that the Ministry of Mines and Steel Development’s Road Map for the Growth and Development of the sector attracted lots of investors in Nigeria’s mining industry.

“The early evidence that our framework is on the right track is the inflow of notable investments. These include Thor Exploration Limited’s Segilola Gold Mine, Osun State, with an initial production capacity of 80,000 ounces of gold annually, representing the first large-scale gold mine in Nigeria.

“In June last year, I also had the privilege of commissioning the Dukia Gold and Precious Metals Refinery(DGPMR) project. The company set out to be a foremost indigenous refiner and trader of gold and other precious metals.

“By providing off-take opportunities through the establishment of precious metals buying centers, it serves as a spur for more small and medium scale mining investment,” he said.

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Minister of Mines and Steel Development Olamilekan Adegbite in his remarks also said the ministry has commenced one pilot project per geopolitical zone in order to enhance local content along the mineral value chain.

He stated further that the ministry has institutionalised business-friendly incentives in order to attract foreign investors.

“We have also institutionalised business-friendly incentives to further make the Nigerian mining sector more attractive to foreign investors.”

The incentives, the minister explained include customs and import duties waivers for plants, machinery and equipment imported for mining operations.

“Tax holidays of between three to five years as applicable, free transferability of funds and permission to retain and use earned foreign exchange,” he added.

The minister said the gold sector has been made more compelling for investors building a gold system that nurtures value across the entire value chain.

“The Segilola Gold Project, which is the first large-scale high-grade gold project owned by the London Stock Exchange, listed Thor Exploration is a testament to such an effort. Located in Osun State, the project has begun the production of gold,” he explained.

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He noted that tho gold refineries Kian Smith, Dukia Gold and Precious Metals Refining Company Limited are currently being built to increase the value of gold in the country for the benefit of stakeholders.

He also stated that through the ongoing Presidential Artisinal Gold Mining Initiative, the Federal Government is organising, formalising and equipping artisanal and small gold miners in Kaduna, Kebbi, Ebonyi, Sokoto, Gombe and Ekiti.

Adegbite also noted that the ministry has a target of increasing the mining sector’s contribution to the nation’s Gross Domestic Product by 5 per cent in 2025.

The Nigeria Extractive Industries Transparency Initiative (NEITI)  Executive Secretary Ogbonnaya Orji had expressed worry that the meagre one per cent contribution of the mining sector to Nigeria’s GDP was unacceptable.

Orji described the activities of illegal minerals buying centres across the country as major revenue leakages to the government, saying that it has become worrisome to the organisation.

The minister said there is an ongoing effort by the Federal Government to formalise the activities of artisanal miners to lessen leakage of revenue in the sector.

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