5th Annual Nigeria Mining Week

Featured Image: Gas flaring in Nigeria

The 5th edition of the Nigerian Mining Week (NMW) started a bit patchy, but one thing was for sure the main point: mining needs to become a driver of economic recovery. Amid the COVID-19 epidemic, the government seems to think that the challenges created by the new world situation are an opportunity to reassess their strategy and to 'build a more resilient economy' as the Honorable Minister of Mines and Steel Development, Arc. Olamilekan Adegbite said in his opening speech. The consensus is that everyone needs to partake in the development of Nigerian mining, and there is no doubt that both the Executive and Legislative bodies of the country agree on it. That is why the Nigerian Mining and Geosciences Society (NMGS) had been instructed to develop for years a comprehensive geodatabase, and the Senate made a point in creating and developing laws that are clear, inclusive, and trust-generating for anyone willing to invest in the mining industry. But, is the country actually ready for receiving capital and dealing with foreign investors?

Figure 1. 5th Annual Nigeria Mining Week
Figure 1. 5th Annual Nigeria Mining Week

There is more to it than just data availability to make a desirable investment destination out of a country. The government of Nigeria is eager to attract more investors - both national and international - to create a more dynamic industry. This event served well for the broadening and strengthening of the mining sector, as it had great series of panelists – from honorable ministers to interviews with founders and CEOs both major distribution exploration and venture companies -, as well as a topic of discussions, and it added an overly-positive picture for the future of Nigeria and its industrial sectors.


The NMW was build-up on the former Lagos Round Table event. This year's event was definitely more intricate and definitely using more technology than its analog predecessor. Yet, it had at its core the same desire of creating better opportunities for Nigerian people in a sector dormant for more than half a century.

The main four components in the governmental strategy were presented as: 'local economic development for artisanal and small-scale mining, strengthening governmental transparency, private sector development, and project coordination and management.' So far, the Nigerian government seems to be on track with achieving its Federal Gold Reserve Scheme goals. As part of their identification of the seven strategic commodities that Nigeria can rely on, the government developed a sustainable gold ecosystem in which workers in mining cooperatives would be integrated under the new mining framework.

The government also makes a point to centralize the artisanal and small-scale mining works by identifying the mining areas using the remote-sensing center, taking them biometrics off the workers, and encouraging them to have an active role in their communities. ASM workers also benefit from free industry training and equipment leasing. The affordable funding for ASM workers is also a great selling point for the governmental agenda.

So far, the government, as well as key national industry players seem eager to develop the mining sector, but the question remains, are there any prospects of future major foreign investment in Nigeria?

To find out a series of straight-forward questions need to be answered in the eyes of Bert Koth, a Partner at the Australian Denham Capital Mining Fund.

Does the country provide the right operating environment?

As the representative for the Minister of Environment and Compliance stated in his first-day speech, 'you cannot separate mining and environment.' Of course, he didn't mean the economic or operating environment, but the protection and development of ESG criteria are vital nowadays to create the right operating environment. One of the other main talking points during the week what that generation of solar energy, as well as various other renewable energy resources, would increase the demand for base and critical minerals. The country plans to be powered by renewable energy by 2030 in a proportion of 30% of its total energy. The development of this ambitious project will create a market for the mining sector to develop, as the authorities hope. This means the Nigerian people are looking forward to a symbiosis between the energy and the mining industry.   Alongside gold, the government wants to target specific minerals such as bitumen, calcium carbonate, and phosphate minerals to restore the sector's glory from the 50s and 60s. The country has been aided in their efforts to develop, by the World Bank. However, these plans seem to be ambitious, taking into account the lack of infrastructure, alongside other critical issues that hider the Nigerian mining sector to realize its potential.

Figure 2. Earlier this year, the Central Bank of Nigeria presented a cheque of N268 Million for the country’s first artisanally-mined and refined gold.
Figure 2. Earlier this year, the Central Bank of Nigeria presented a cheque of N268 Million for the country’s first artisanally-mined and refined gold.

Does Nigeria foster a good business culture?

Many panelists seemed to agree on the point that Nigeria has been ready for a long time and that the new transition to the eventual medium of resource and information spreading when indeed aid the attraction of foreign investors.

So far, the Canadian Thor Explorations Ltd. (THX:TSX-V) is the only international player, who shares the government's vision. The company set a new standard in Nigeria for production and exploration in the gold sector when they decided to open the first operationally-advanced mine. since the Civil War broke in the 1960s. Based on the Canadian company's investment, the government hopes that they will become an example for investors by generating proof-of-concept that business in Nigeria is worthwhile.

Did the Nigerian Government and Senate work on developing a good fiscal reality?

As many panelists made it quite clear from day one, the Nigerian Minerals and Mining Act (2007), as well as the Nigerian Mineral and Metals Policy (2008), are put in place to aid the sustainable use of national resources program.

Transparency seems to have improved, as well as the interest and support of the government. Views of industry analysts have confirmed the statements made by the government officials, but there is still skepticism regarding the government's measures to get rid of the so-called 'petro-corruption', which can easily translate into the mining sector.

Would a Nigerian-based project deliver, for the efforts to risk capital investment be justified?

Due to the lack of a better example given, during the NMW, the comparison used by the majority was Thor Explorations Ltd., and its new Segilola Gold Project, located in Osun State, Nigeria. The 4.2g/t grading for an open-pit mine is not bad at all.

Figure 3. Segilola Project location
Figure 3. Segilola Project location

Despite its promising resources, foreign interest seemed to lose momentum after the start of the COVID-19 lockdown. It appears there are too many risks associated with the Nigerian oil and gas sector for foreign investors to place their capital. Threatens of corruption, environmental damage, and international deception seemed to still make Nigeria as a likely less desirable place to invest, even after many counts where the panelists proved its potential metal reserves and constant governmental support. That is why only a handful of small foreign exploration companies decided to show some superficial interest after the announcement made by Thor Explorations Ltd. about opening their gold mine.

The future:

The Segilola Gold Project has an 'indicated resources of 556,000 ounces grading at 4.2g/t, an inferred resource of 306,000 ounces grading at 4.7g/t and a probable reserve of 448,000 ounces grading at 4.2 g/t', according to Thor Explorations Ltd. reports. The project will assure the development of the Osun State area, as well as a continuous stream of jobs for locals. With the help of the government initiatives to train workers in the sector, the project seems to be having an influx of local skilled workers, which benefits all the stakeholders involved in it.

The development of the energy sector, as well as the long-waited infrastructure upgrade, will make it more imperative for the country to source its prime materials from inside its borders. Also, the transparent collaboration between ministries gives assurances that the environment will be as protected as it can be for reckless exploitation.

In terms of Artisanal ad Small-Scale Mining (ASM), the initiative to collectivize the workers in this sector, and to offer them training, as well as creating a database of them, and to offer financial support for their endeavors seems to be one of the points that the Nigerian leadership takes very seriously.


For sure, Nigeria is one of the Western African countries that take the ESG policies as seriously as they can, but there's still a lot to be expected from the government that promises a bright future for its country. Their lack of infrastructure is still a problem that dents the legislative advancements done for this country. However, there is still time left between now and 2030, when the Nigerian government promises to deliver a better people outreach and a better standard of living, based on the due diligence and cooperation between their mining power and environmental ministries. The country seems eager to use its potential, and it made clear improvements in a lot of areas over the years, all of which are commendable. But, will they be able to use the COVID-19 pandemic as a reflection period, or will it just make Nigeria lose momentum on capital retention and attraction? This is probably a question better answered in a year from now, at the next Nigeria Mining Week.

Alexandra Comaniciu

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