NIGERIA is looking to revive the moribund mining sector as it seeks to diversify revenues following the 2014 crash in global crude prices.
The country’s focus on oil has meant gold has been ignored for decades. But locals have always known that a vast deposit of gold sits underneath the jungle of Osun state.
A few companies are now venturing into the sector, hoping to repeat the success of mining in Ghana, Senegal and Sierra Leone. On a humid morning, Segun Lawson, CEO of Thor Explorations, leads a site visit of his proposed mine.
‘No one has a clue about mining in Nigeria,’ says Lawson.
The government mined the vein in the 1980s, ‘but oil was so prolific they just left it,’ he says.
‘The gold runs 210 metres deep,’ he says, rattling off statistics to the group of investors.
Lawson hopes to start production at Nigeria’s first large-scale gold mine in 2020. ‘This is the low-hanging fruit. This is a small gold province that no one has explored with modern technology,’ he says.
Gold mining has a long history in West Africa. The region was home to the Asante and Mali empires, which were a 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.
But new technology has been slow to come to Nigeria. Down the road from Lawson’s mine is a small gold market in the city of Ilesa, where artisanal miners sell alluvial gold extracted via back-breaking labour.
‘We’ve always had the gold but we haven’t had the people to mine it,’ said traditional ruler Adeyeye Bamidele Adeniji. ‘I want to start the work. My expectation for you people is to let us benefit,’ he told Lawson.
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 percent of its government revenue and almost all its foreign currency, despite being rich in iron, bitumen and gold.
Lawson, who had eyed 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 is an issue about equipment. Nigeria currently does not even have the proper machinery in the country so Lawson will have to import crushers and mills from China.