- Mining sector lacks basic infrastructure to transport minerals and a dearth of geological data
Ilesa, Nigeria – LOCALS have always known that a vast deposit of gold sits underneath the cocoa trees and towering thickets of bamboo in the tropical jungle of Osun state in southwest Nigeria.
The country’s focus on oil has meant the gold has been ignored for decades. But the government is now looking to revive the moribund mining sector as it seeks to diversify revenues following the 2014 crash in global crude prices.
A few companies are already venturing into the sector, hoping to repeat the success of mining in nearby west African countries Ghana, Senegal and Sierra Leone.
On a humid morning, Segun Lawson, chief executive of gold mining firm Thor Explorations, leads a site visit of his proposed mine. “No one has a clue about mining in Nigeria,” said Mr Lawson, dressed in a white shirt, chinos and construction boots as he walked down a red dirt road swatting away tiny insects. The Nigerian government mined the vein in the 1980s “but oil was so prolific they just left it”, he added, stopping at an abandoned 20-metre deep trench. “The gold runs 210 metres deep,” the geologist said, rattling off statistics about the deposit to the group of investors.
One British broker sounded impressed by the numbers. Mr Lawson hopes to start production at Nigeria’s first large-scale gold mine in early 2020. “This is the low-hanging fruit. This is a small gold province that no-one has explored with modern technology,” he said.
Gold-mining has a long history in West Africa. The region was home to the powerful Asante and Mali empires, who were a major source of bullion to the Mediterranean and Islamic worlds in medieval times. The trade took a back seat to slavery before being ramped up again in the late 1800s, when Europeans introduced industrial mining techniques. In the 2000s, a commodity “super-cycle” drove another boom, with technical advances helping to discover new sites and make mining more efficient. But this new technology has been slow to come to Nigeria.
Down the road from Mr Lawson’s mine is a small gold market in the city of Ilesa, where artisanal miners sell alluvial gold extracted from the earth with backbreaking labour. People can only dig so deep. “We’ve always had the gold but we haven’t had the people to mine it,” said traditional ruler Adeyeye Bamidele Adeniji at his house in Ilesa. My mind is very clear, I want to start the work.” “My expectation for you people is to let us benefit,” he told Mr Lawson and his team.
Across Nigeria and West Africa, tens of thousands of people work in dangerous open pit mines, digging everything from gold and tin to sapphires. “Their sheer numbers combined with the weak regulatory framework surrounding their work has alarmed many environmentalists in the region,” said Cassandra Mark-Thiesen, Africa researcher at the University of Basel. “The use of child labour, accidental deaths among miners and the smuggling of winnings are other troubling aspects.”
But this is what most mining looks like in Nigeria, which has a sophisticated oil and gas industry at the expense of everything else. Africa’s largest economy depends on oil for 70 per cent of its government revenue and almost all its foreign currency, despite being rich in iron, bitumen and gold.
Since coming into power in 2015, President Muhammadu Buhari’s government has tried to wean the economy off crude. Last year, the World Bank approved a US$150 million credit to support growth in Nigeria’s mineral sector, which currently represents less than one per cent of gross domestic product.
Nigeria’s mining sector faces big problems, including lack of basic infrastructure to transport minerals and a dearth of geological data. “You have to be long-term greedy to make it in Nigeria,” said Gabriel Olumide Odediran, head of investment at the Lagos-based Asset and Resource Management Company. “Trying to make money quickly won’t work here.”
Mr Lawson, who had been eyeing the mine for years before buying it, hopes to lead the gold pack. But he has to publish the definitive feasibility study before starting construction of the mine. Then there’s an issue about equipment: Nigeria currently doesn’t even have the proper machinery in the country so Mr Lawson will have to import crushers and mills from China. Yet the end is in sight. “Developing the mine is quite surreal,” said Mr Lawson. “We had no idea it would get this far.” AFP
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