By Engr Alexander Elemo, MNSE (Nig), FIEAust (Aus), & CPEng (Aus).
Nigeria’s gold mining industry, once a significant contributor to the nation’s economy, has experienced periods of decline and resurgence. Today, it stands at a pivotal juncture, with the potential to become a cornerstone of economic diversification and growth. This article delves into the current status of gold mining in Nigeria, the challenges it faces, and the prospects that
lie ahead.
Current Status of Gold Mining in Nigeria
Historically, Nigeria was a notable player in gold production, especially in the early 20th
century. However, the discovery of oil in the 1950s shifted focus away from mining, leading to a decline in the sector. In recent years, there has been a renewed interest in harnessing the country’s gold resources. Significant deposits have been identified in states such as Osun, Zamfara, and Kaduna. Despite these promising reserves, the sector’s contribution to the Gross Domestic Product (GDP) remains minimal, accounting for only about 0.3% as of recent estimates.
Challenges Facing the Gold Mining Industry
Regulatory and Legal Framework: Nigeria’s mining sector has grappled with a complex regulatory environment. Inconsistent policies and overlapping jurisdictions between federal and state authorities have often deterred potential investors. The need for a streamlined and transparent legal framework is paramount to attract and retain investment.
Infrastructure Deficiencies: The lack of essential infrastructure, including reliable transportation networks and power supply, poses significant challenges. These deficiencies increase operational costs and complicate logistics for mining companies
operating in remote areas.
Security Concerns: Certain gold-rich regions have been plagued by security issues, notably illegal mining activities and banditry. These challenges not only threaten the safety of mining operations but also discourage foreign investment. For instance, in Zamfara State, mining activities were suspended in 2019 due to security concerns, though the ban was lifted in December 2024 following improvements in the security situation.
Environmental and Social Issues: Artisanal and small-scale mining (ASM) is prevalent in Nigeria. While ASM provides livelihoods for many, it often leads to environmental degradation and health hazards due to unregulated practices. Addressing these issues requires a balance between supporting local miners and enforcing environmental standards.
Prospects for the Future
Despite these challenges, the future of gold mining in Nigeria holds considerable promise:
Government Initiatives: The Nigerian government has implemented reforms aimed
at revitalizing the mining sector. Initiatives such as the Presidential Artisanal Gold
Mining Development Initiative (PAGMI) seek to integrate artisanal miners into the
formal economy, ensuring better regulation and economic benefits.
Foreign Investment: Recent policy reforms, including the revocation of unused
mining licenses and offering investors a 75% stake in a new national mining
company, are designed to attract foreign investment. These measures aim to create a
more investor-friendly environment, encouraging both local and international
stakeholders to participate in the sector’s development.
Technological Advancements: Embracing modern mining technologies can enhance
efficiency and reduce environmental impacts. Investing in advanced exploration and
extraction techniques will enable Nigeria to maximize its gold production potential
while adhering to sustainable practices.
Community Engagement and Development: Fostering strong relationships with
local communities is crucial. By ensuring that mining activities contribute to local
development through job creation, infrastructure development, and social programs, companies can build trust and secure social licenses to operate.
Conclusion
Nigeria’s gold mining industry is poised for a renaissance. By addressing regulatory, infrastructural and security challenges, and by leveraging government initiatives and technological advancements, the sector can significantly contribute to economic diversification and growth. With concerted efforts from all stakeholders, Nigeria can unlock the full potential of its gold resources, paving the way for a prosperous future.
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