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Niger Delta: FG Responds to Claims on Zamfara Gold Ownership

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The attention of the Ministry of Mines and Steel Development has been drawn to media reports on reactions of individuals and groups to the purported news report about Zamfara State Governor buying gold from artisanal miners in the state and selling same to the Central Bank of Nigeria (CBN). Ordinarily, the Ministry would have been silent but for the negative impression those views are portraying; seemingly that states in some parts of the country have right to aggregate minerals resources within their domain to their use.

To set the record straight, mineral resources remain on the Exclusive Legislative list as enshrined in the 1999 Constitution (as amended). For the benefit of doubt, Section 44(3) states “the entire property in and control of all minerals, mineral oils and natural gas in, under or upon any land in Nigeria or in, under or upon the territorial waters and the Exclusive Economic Zone of Nigeria, shall vest in the Government of the Federation and shall be managed in such manner as may be prescribed by the National Assembly.” Likewise the Mineral Act of 2007 is very clear on issue of minerals ownership and exploitation,

It is line with this that the Ministry of Mines and Steel Development is saddled with the responsibility for identifying the nation’s solid minerals, advising government on the formulation and execution of laws and regulations guiding the various stages of prospecting, quarrying and mining, and handling sale and consumption of solid minerals in the country, through the issuance of permit, licenses, leases and collection of rents, fees and royalties.

As part of strategies to implement policies/programmes in the Mining Sector to broaden revenue generation  and employment opportunities in line with the economic diversification agenda  of this administration, the Presidential Artisanal Gold Mining Development Initiative (PAGMI) is being implemented. The components of the initiative included but not limited to:

–         Formalization of the artisanal miners into cooperatives This is to integrate their activities into the economic and institutional framework that would eliminate illegality;

–       Registration of Buying Centres and Aggregators, to provide market access for artisanal miners, etc.

Like in the oil and gas sector, revenues generated from mineral resources are paid into the federation account, and shared among the states during the monthly meeting of Federation Allocation Account Committee (FAAC). 13% derivation is paid on mineral resources exploitation from minerals producing states as done in the oil and gas sector.

On Zamfara State gold

Zamfara State has security challenges and the State government discovered that bandits were exploiting the ignorance of the artisanal miners, buy off their gold at very cheap price, take the gold across the border and sell at market price and  exchange for ammunitions and guns, which was fueling banditry.

Zamfara State government through a registered company, with a buying centre license is now buying gold from the artisanal miners at market price. This has no doubt discouraged the artisanal miners in the state from selling to bandits.

Though states through their licensed corporate bodies can buy and sell gold to any interested persons or company, it is worthy of note that CBN did not and will not buy gold from Zamfara Government.

The gold displayed by Zamfara State government is called dore bars (semi-processed gold). CBN buys gold that is processed to 99.99% purity which is LBMA standard, tradable all over the world.

The Federal Government encourages state governments to be part of exploitation of minerals in the country by incorporating a limited liability company with which to approach the Ministry for a license for Mining or Buying Centres. Such corporate body/company must go through normal processes for approval and issuance of license. This license allows such company to exploit minerals in any given location which is called Cadastre Unit.

Head of Press & Public Relations


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