People & MoneyUncategorized

Investor Signs Agreement with FG over Nigeria’s Gold Industry

In addition to being Africa’s biggest oil producer, Nigeria has huge untapped deposits of several minerals including gold, iron ore, coal, tin, lead, and zinc, in more than 500 locations but almost all extraction is done on a small-scale and manual basis. As a result, mining makes up just 0.3 percent of the gross domestic product.

In July, President Muhammadu Buhari expressed hopes that Nigeria’s newly implemented gold reforms will earn the government up to $500 million a year in royalties and taxes as well as create 250,000 jobs.

The reform is in addition to other significant efforts aimed at reviving the abandoned sector. In February, Nigeria licensed two gold refineries mainly to produce gold for the central bank to hold in its reserves and also for export. The goal is to raise the mining industry contribution to GDP to 3 percent by 2025.

In line with the above, the government said this week it has signed an Express of Interest Agreement with Messrs La Mancha, a Luxembourg-incorporated private gold development & mining company, to begin gold mining operations in Nigeria.

The Cairo-based company is expected to commence operations by the first quarter of 2021 according to the deal signed with the Federal Government through the Ministry of Mines and Steel Development.

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A statement signed by the Director, Press Department, in the Ministry, Itore Thomas said the signing ceremony was coordinated by Egyptian African Arab Company for Development (EGAAD) in Cairo, Egypt, where the Minister of State, Mines and Steel Development, Dr. Uchechukwu Sampson Ogah said Nigeria stands to benefit immensely from the partnership.

He expressed optimism that with the signing of the Expression of Interest by La Mancha, the efforts to attract big investors into the Sector will continue to yield the expected result, and that it would boost the government’s diversification of the economy through the minerals and metals sector.

Following the signing, the Minister also said the collaboration between the Federal Government and La Mancha Holdings Incorporated, which has portfolio companies including Endeavour Mining, Golden Star Resources, and Altus Strategies, others, and with a market capitalization in excess of about $10 billion and over 1.2Moz of gold production.

While noting that the collaboration would further cement African brotherhood in a way that ensures development within the continent using its abundant gold resources, he said: “Our ultimate goal is to attract investors with the technical and financial competence to invest in our solid minerals sector, from detailed exploration to mining, development, processing, and refining to producing standard ores in Nigeria.”

Also Read: Coronavirus Resurgence Poses Risk to Nigeria’s 2021 Nigerian Budget 

Ogah however assured La Mancha of the Nigerian government’s readiness to provide an enabling business environment for the timely realization of its investment interest and provision of available geoscience data and necessary support.

Speaking earlier, La Mancha Chairman, Naguib Sawiris, said the signing of the document was its way of formally expressing the Company’s interest to begin earnest operations in Nigeria.

He further stated that La Mancha has been looking at new opportunities to expand its investment in Gold mining across Africa, adding that Nigeria possessed enough gold deposits to bid for investment.

Sawiris acknowledged that Nigeria apart from being the largest market in Africa, there has been political stability in the country since the inception of democratic governance for over a decade, and that also attracted his company to invest in Nigeria.

The Nigerian Ambassador to Egypt, Prof. Dandatti Abdulkadir, who also was present at the signing ceremony to witness the signing of the Expression of Interest between the Federal Government and La Mancha, promised that the Embassy is willing and ready to provide necessary bilateral support for La Mancha to actualize its investment interest in Nigeria.

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