Exclusive: Zamfara State Has No License To Mine Gold, Says Adegbite


Horatius Egua

Abuja, Nigeria: Minister of Mines and Steel Development Arch Olamelekan Adegbite has dismissed claims that Zamfara State has been granted license to mine the gold deposits in the state.

He said that no state under the Nigerian law is permitted to get a license to mine any mineral resources in the country.

The controversy over the mining license was triggered by the visit and presentation of gold bars by the Zamfara State Governor Muhammad Matawalle, in 2020, to President Muhammadu Buhari, in Abuja.

Following the visit, many state governors, especially those in the oil rich South-South claimed that Zamfara state had been secretly granted a gold mining license by the Federal Government and wondered why similar gesture was not extended to them in the exploration of oil and gas resources in the region.

In an exclusive interview with The Bridge News, on Monday, in Abuja, Adegbite dismissed the report stressing that no state in the country has been licensed by the Federal Government to mine gold or any other mineral resource in commercial quantity in the country.

According to Adegbite, “What was not communicated was that through Zamfara State Mining Company they got a license to buy gold as a private mineral buying center. What they were doing essentially was to take the gold away from the bandits,” disclosing further that “The miners sell to anybody that wants to buy from them and the government put a premium on it. If for example you are selling to the bandits at N10, I will buy it from you at N12, so that’s how the governor started acquiring gold. That gold now belongs to that company that bought it. It is not Zamfara State Government, it is a company and that was what I was saying then”.

He further stated that “If you have a company, whether Osun State Mining Company or Rivers State Mining Company, or Zamfara Mining Company, you can apply for Private Mineral Buying License” adding that under the Mining Act 2007 state can participate in buying and selling mineral “only as a cooperate body not as sub-national”.

The minister further noted that the Zamfara State governor “only applied for a license to enable it trade in gold like every other company or individual businessman” emphasizing that the 2007 Act does not permit the granting of mining licenses to individual states.

Recounting what led to Zamfara state’s acquisition of the half refined gold bars known as Dore Bars, he said “the Zamfara governor was worried by the banditry going on there and the fact that it was been fueled by gold trade, the bandits were getting gold and they were exchanging gold for ammunitions, the governor went to see the president and took some gold bars which they had purchased from these people, the artisanal miners”.

Adegbite was however quick to add that the gold bars presented to Mr President by the Governor were half refined gold (Dore Bars) and not refined ones (London Bullion Market Association (LBMA) gold) which have no value at the international gold market.

“These are what the Zamfara governor took to the president, to tell the president that this is what is fueling insecurity in the state and he wants permission to get involved in buying these things with the knowledge and permission of the ministry”.

Explaining further, Adegbite said “Even you as an individual you can trade in gold. We have what we call Private Mineral Buying License. If you say for instance you as an individual you are interested in trading in gold, of course you have to incorporate a small company to do that. Come to us, it will cost you N50, 000 (fifty thousand naira) and some documentation. That means you can now buy gold from artisanal miners, aggregate and trade in it. You can sell to some other people, maybe people who will refine it locally or sell it to who will take it abroad through the legal route”.

He said “Anybody can buy gold and sell from anybody that wants to buy from you. Central Bank of Nigeria (CBN) will not buy gold in Dore Bars, they can only buy LBMA. All those gold that Zanfara government handed over to Mr President, CBN will not buy it because that gold is not tradable internationally. It must be LBMA before you can put it as your foreign reserve. It has to be a bullion. All the gold that Zamfara State governor was showing were all Dore Bars, 94.% (processed) and nobody is going to buy that from you. People who will use it for jewelries will buy it but it is not tradable internationally. You cannot quote for it. CBN cannot use it as foreign reserve. If they like let them load the whole of this building with Dore Bars CBN cannot say they have $1 foreign reserve, no, it has to be LBMA”.