Gold in Nigeria


“Congratulations,” said the voice at the other end of the call. It was the fifth call Nere Teriba received in less than 10 minutes. There are also messages on her phone, which she plans to read much later. They are all congratulatory messages. “Go, girl. You rock!” reads the message staring at her as she peeped at her phone for the last time, repeating the words she had read almost inaudibly. Surprised at the sudden frenzy about a gold refining license her company secured months earlier, Nere smiles as she recalls months of hard work. Kian Smith can finally start smithing.

Starting in 2019, Nere Teriba, Vice Chairman of Kain Smith Trade & Co Ltd., will become the first and youngest Nigerian to refine gold locally.

“On one hand, we can say it took a few months, on the other hand, it took seven years,” says 36-year-old Nere Teriba as she tells The Nerve Africa how long it took the company to secure the gold refining license.

It was a meeting of preparation and opportunity for Nere, who had a proposal on a gold reserve buying programme for the country ready when she was invited to join the Economic Recovery and Growth Plan (ERGP) focus labs. Her proposal highlighted the need for a gold policy and a framework for gold refinery license permit structure for anyone who wants to apply for one.

The proposal by Nere’s Kian Smith made a case for the establishment of a Nigerian Gold Council which will be in charge of the country’s gold policy.

“The establishment of the council will drive innovation, stimulate the economy, and generate income for government coffers,” the proposal states. “Nigeria can become a gold economy irrespective of whether it mines gold or not. India, UAE, Singapore, Italy, Switzerland, Turkey and London are renowned world gold markets without the classification of gold mining countries.”

Kian Smith raised some important questions in its proposal, some of which formed the basis of our (TheNerve Africa) discussion with Nere when we met her at an art-themed tea room in Victoria Island, Lagos in October, weeks before the groundbreaking of her refinery.

Nere paused at different intervals during our conversation, politely explaining, each time, why she had to answer her phone calls. Nere runs a multimillion-dollar minerals, commodities and mineral services company, which has grown tremendously over seven years. Sleeves always up, ready to work, Nere plays in a male-dominated industry, where women sometimes have to work twice as hard to make desired impact. To Nere, mining is a calling and she would give all it takes to help Nigeria and by extension, West Africa harness the mining economy.

How can the existing gold value chain be organized and strengthened? One of the questions posed in Kian Smith’s proposal stems from Nere’s belief that the Nigerian mining industry is not as broken as most people believe.

“The issue is not that there is no regulation, it’s just that they are not enforced,” explains Nere, who has plans on how to help the government solve some of the major challenges faced in the mining industry, especially as it concerns artisanal and small-scale miners.

Mining in Nigeria

Organized mining in Nigeria started in 1903 when the British Secretary of State for the Colonies established the Mineral Survey of the Southern Protectorate of Nigeria. In 1904, a survey of the Northern Protectorate was also established as the exploration of mineral resources for use as raw materials in Britain began. As a result, several mineral deposits including Columbite, Bitumen, Coal, Iron Ore and Gold were discovered. However, it was not until 1913 that Gold production started, peaking in the 1930s before World War II brought about a decline.

Nigeria had no choice but to participate in the war, being a colony of Britain. With Britain’s economic, industrial and military power weakened by World War I, the kingdom fell back on its colonies, using both their human and natural resources to prosecute WWII. Colonial companies abandoned mines during the war and the gold mining industry has not recovered since then.

Although in the 1980s the Nigerian Mining Corporation (NMC) resumed gold exploration, it could not sustain it. Fast forward to the 2000s, artisanal mining has become a thing in Nigeria, from Bin Yauri in northern Nigerian’s Kebbi State, to Bagega in Zamfara State where 163 people died from lead poisoning in 2010.

Artisanal Mining

Artisanal mining had peaked in Bagega when gold prices skyrocketed during the Great Recession. Even farmers left their crops and focused on mining. During the period, the price of gold went as high as $1,000 per troy ounce, so much that even small finds by small-scale miners paid well.

Till date, most of the mining done in Nigeria is done by artisanal and small-scale miners (ASM), making regulations difficult to enforce.

Illegal Gold Mining In Nigeria

“The thing is, there has been a huge gap. We abandoned the sector, went for oil and the people took up the vacuum,” Nere explains, adding that their activities, while artisanal are not necessarily illegal.

“So, illegal miners are not necessarily artisanal miners. Sometimes, there are huge companies mining illegally. Mining illegally is if you are mining off permit and not following due process,” the Kian Smith boss explains.

With a renewed commitment to developing the mining industry, the Nigerian government, like others across Africa, is beginning to recognize how important artisanal and small-scale miners are to the growth of the industry. Hence, the government ministry in charge of mining in Nigeria is trying to formalise artisanal mining to ensure some form of regulation in the space.

Kian Smith is working with small and medium scale miners to source gold for its refinery. The company is also working with artisanal miners, whose activities it is going to be an important part of formalising.

“One of the major reasons several small-scale miners are not formalised is because of royalty payments, but we have found a way around this,” Nere says, explaining how Kian Smith will ensure the ASMs it works with are formalised. “One of the incentives we want to give our suppliers is paying royalties on their behalf.”

The idea seems to be working fine, as Kian Smith has been able to sign up 200 suppliers in less than three weeks. “We will help them get registered with the Corporate Affairs Commission in January,” Nere says.

Kian Smith will also be sourcing gold for its refinery from other parts of Africa, including Ghana, Sierra Leone, and Tanzania. One supplier working across Ghana and Sierra Leone has already committed to supplying Kian Smith 100Kg of gold per month. In all, the company has signed Memoranda of Understanding with about 200 suppliers.

Although Nigeria is believed to have gold reserves of up to 200 million oz, there are no records to show exactly how much gold is mined in the country.

“But from my research, there are about 2 tonnes of gold physically in circulation each month,” says Nere. However, she admits that “we can’t quantify how much of that 2 tonnes is from neighboring African countries, and how much of that 2 tonnes is mined locally”.

Nigeria’s neighbors have been more productive, with Ghana producing 95 tonnes of gold in 2015. Mali produced 50 tonnes in the same year and Burkina Faso produced 34 tonnes, but Nigeria could only manage 4 tonnes, as records show. Nere believes this figure shows how much the country could be losing by not formalising artisanal mining which even accounted for a huge percentage of the 4 tonnes reported in 2015. Most of the countries with decent gold production records in Africa have begun to recognise artisanal mining and are looking for ways to formalise their activities.

In Ghana, artisanal, small-scale miners, popularly known as galamsey have become increasingly important. They are responsible for all diamond production in the West African country and their contribution to gold production is increasing. The government is now training small-scale miners in sustainable mining methods as part of a roadmap that seeks to address illegal mining in the country.

Nere also thinks there is a tech solution Nigeria can adopt. The Computer Engineering graduate said her company created a mobile solution — Zokia system, a mobile platform to register and bank artisanal miners.

“When we were doing our pilot in Chikun, Kaduna state, we registered 1200 artisanal miners, tagging the gold from mine, through the value chain, all the way,” she says. “We also used mobile money, as a way to eventually sensitize them, to get them off cash payment and keep their monies safe. More than 300 of the registered 1,200 use mobile money for payments.”

Nere explains that as good as the solution could be for formalising mining of all scales and reducing the incidence of illegal mining, artisanal and small-scale miners have no reason to spend money on tech, as they do not see it as essential to their business.

However, governments committed to reducing illegal mining to the barest minimum can pay for a tech solution such as Kian Smith’s and make it accessible to artisanal miners for free. That could be a huge step in formalising artisanal mining, especially in Nigeria.

Nere Teriba, Kian Smith, Nigeria's 1st Gold Refinery

Investing in Mining

There have been attempts in the past to bring the mining industry up to date to make it attractive to private investment. Beginning in 2007, the Nigerian Minerals and Mining Act was introduced, setting the rules for the exploration and exploitation of solid minerals. The law stated that the government owns all the country’s mineral resources. However, in 2011, the year Kian Smith was registered in the country, the government released new mining regulations, which was believed would bring about greater accountability in the sector. This also, was reviewed, leading to the Roadmap for the Growth and Development of the Nigerian Mining Industry which was adopted in September 2016.

The country is gradually getting it right, showing an unprecedented commitment to the growth of the mining industry, with the issuance of a gold refining licence to Kian Smith one of the recent wins in the industry. The company has already started work on the site of its new refinery in Ogun State, south west Nigeria. Nigeria’s Minister of State for Mines and Steel Development Hon. Abubakar Bawa Bwari broke the ground at the site on December 13 as construction began.

“During the focus labs of the Economic Recovery and Growth Plan (ERGP) of this administration, we discovered that a well organised gold value chain can trigger an economic revolution like it did in India, South Africa, Switzerland and others,” Hon. Bwari said at the groundbreaking ceremony. He explained that his Ministry was determined to develop the mining sector to increase its contribution to Nigeria’s GDP, improve its capacity to create jobs and engender sustainable mining.

Ongoing construction work at site of Kian Smith Gold Refinery in Nigeria’s Ogun State.

Nere says the refinery will be ready to start production by the end of the first half of 2019.

While Nere did not disclose details of investment in the new refinery, which she says include both local and international interests, she says Kian Smith is working with several banks, including Stanbic IBTC Bank and Zenith Bank Plc. According to her, Kian Smith is also in talks with the African Finance Corporation (AFC).

“The truth is, we need banks,” says Nere. “Not even so much for the setup; we need banks for the trading. To buy an unlimited amount of gold, at any time, to refine; we need the banks,” Nere says

She dismisses the widely held belief that banks are not committed to the mining industry.

“The issue with banks is ‘show me your bankable feasibility study (BFS)’, and most Nigerian miners cannot show that, because they haven’t got the investors who will do the work to produce the BFS. So, the thing is banks are looking for that; Nigerians don’t have that.”

She adds that a bank would like to see a supply contract, a buying contract; “those are the transactions that banks are considering”.

Nere believes that for every player in the mining industry who can get their acts together, banks are always ready to do business. After all, she’s working with some banks to bring her refinery to life next year. Nere says the refinery has the potential to provide more than 500,000 direct and indirect jobs. But beyond jobs, Kian Smith is interested in helping to build the gold value chain in Nigeria.

Nere is hopeful things will get better but admits the mining industry in Nigeria is a tough one to play in. She highlights policy inconsistency and the reaction of mining communities to operators as two of the major challenges the industry faces.

“The reason why the sector has struggled and even investors have issues is because the Nigerian ecosystem does not encourage long-term investment and perseverance to get anything,” Nere says. “Everybody wants money now.”

One of the issues Nere’s Kian Smith is taking up with the government is how to grant gold a VAT-free status. She explained the dynamics of VAT as it concerns gold.

“Gold should be VAT-free because it’s a financial instrument. However, even if there will be VAT on gold, it should not be too high so as to encourage export. We need the government to review VAT status on gold bars and coins,” Nere says.

According to her, the Nigerian government is working with the United Nations Industrial Development Orgasnisation (UNIDO) and other bodies to decide an efficient policy on gold products and alloys.

Kian Smith is also working on seeing import duties on gold and gold doré reduced.


Nere says Kian Smith is committed to maintaining high standards, from purity of gold to sustainability in production. The company’s refinery in Ogun State has the capacity to produce 3 tonnes of gold and 1 tonne of silver per month, both at a purity of 99.99 percent.

UNIDO will help Kian Smith in sustainable mining, supporting ASMs that want to supply Kian Smith and are committed to sustainable mining. Kian Smith is also working with international development organization Pact, to ensure due diligence and safety of miners, as well as curb illegal mining.

Once Kian Smith produces its ethical gold, it will be looking towards central banks, jewelers in the Middle East, Turkey, Switzerland and several parts of Africa.

Already, the Central Bank of Nigeria (CBN) has committed to buying gold from Kian Smith as it stocks up the country’s gold reserves.

“CBN has not said volume, but they are ready to buy gold in either naira or USD. We are hopeful that by the end of second quarter, their terms and conditions will be clear,” Nere says.

Kian Smith is also in talks with other central banks. The company has also met with the London Bullion Metal Association (LBMA), Responsible Jewelry Council (RJC) and World Gold COuncil (WGC) towards international certification process for Nigeria’s gold.

The Call

When TheNerve Africa first spoke with Nere in October, she was facing some challenges at her refinery site in Ogun, but she told TheNerve Africa that none of the things happening then would affect plans for the Kian Smith refinery to start working in 2019. “I’ve been here before,” Nere said, exuding the same confidence that has made her successful in a tough industry. The confidence, she says, stems from knowing that mining is her calling.

“Mining called me,” Nere declares. “It didn’t make sense when it was calling me because I was like ‘what is it about mining? This is a capital-intensive sector and am I sure this is the right sector to be calling me?’

“I wanted to meet people, so I met people in the sector and got their opinion: what do you think? Why are you in it?”

She continues: “It was interesting because they all talked about how horrible the experience is and I am like, but you are still there.

“I did some research, connected with some people in the sector here and they did their best to discourage me from getting into the sector but I still went in and I haven’t looked back.

“So I will say there is a mining bug; if it bites you, if it’s meant to be, no matter how hard it is, you will stick to it but if it is not meant to be, you will run.

“The people I talked to were all saying do not do it, it is challenging, it is rewarding, it’s amazing, but do not do it. So, I had to figure out the way to enter, because it is capital intensive and I didn’t have that kind of funds. So I entered by trading. Almost the same principles you use to trade anything else like land, supplies, and all of that. So that was how I entered. I entered by trading.”

The Kian Smith boss was in South Africa for a mining conference. There she met someone who wanted to bring his company to Nigeria. “I said I can do it for you, and that was how I did it. That was how I started trading.”

Nere says business has been good for Kian Smith despite the tough operating environment. “It is a difficult sector,” she reiterates. “It has its ups and downs. It has been challenging and there have been issues all around, but overall, if I look back, we have seen a steady progression. We see opportunities, we see challenges but we still said this is the sector we want to be in.”

Speaking on how hard Kian Smith had worked to get to its current level, Nere recalls her three months in Abuja for the ERGP focus labs. The Lab process is one of the several initiatives by the Nigerian government to fast-track the attainment of its ERGP objectives. The government had invited potential and existing investors, both foreign and Nigerian, who may be interested in investing in any of the three areas of focus — Agriculture and transportation, Power and gas, Manufacturing and processing (including solid minerals) — to attend closed-door sessions where prospective investors will have access in one location, to all the officials of government whose support, or approvals, they might need to enable them commit to an investment decision.

“I think after the first few days, we lost half the people because we spent several months in Abuja and you footed your own bills; the cost of your hotel, the cost of everything; this is not a government sponsored thing,” Nere explains. “For a lot of business people … like for me, I’m still recovering from putting a lot of things about the business on standstill for about 3 months.”

Nere says business owners had to ask themselves pertinent questions such as the wisdom in leaving their businesses for about 3 months at their own expense, “and at the end of the day you’re not even guaranteed that the government will even proffer a solution for you”.

She thinks Kian Smith was fortunate to be part of the focus labs and have its proposal accepted. “We were at a standstill for a major project. We were fortunate enough that we could take on that expense. It was huge because a lot of businesses that have a lot of better ideas and bigger problems did not have the opportunity to foot the expenses for three months in Abuja.”

The gold refining licence in hand, Nere has crossed another big hurdle as Kian Smith continues its growth, but again, she recalls one of the tough periods in the business’s growth and sighed.

“I have suffered,” she says. “But if you wait long enough … if you are patient long enough, things always work out fine.”

Sadly, “our generation has lost perseverance,” says Nere, who would love an opportunity to one day “genuinely talk to young people”.

“Our generation is a microwave generation,” Nere adds, stressing that social media has made success look easy so much that “young people are looking for shortcuts”.

Nere says she learnt doggedness from her father, the former Olu of Warri, who due to his Christian faith attempted to denounce a 500-year-old title Ogiame, which he said, was associated with a sea goddess. Kian Smith started before Ogiame Atuwatse II died in 2015, but Nere says she has never had a free pass using her father’s name or influence. She admits that her background played a huge role on the woman she has become but at the risk of sounding overly spiritual; Nere says her business achievements are so massive they couldn’t have been due to her background. She says they are supernatural.

“This is for the future of Nigeria; this is going to change Nigeria. It’s going to change Africa’s history. Africa will never remain the same again.”

Source: The Nerve Africa