By Modupe Gbadeyanka
A deal has been struck between Heritage Bank and Dukia Gold to facilitate access to local miners and artisans to get value for their commodity at international market price after being registered with the firm.
Managing Director of Heritage Bank, Mr Ifie Sekibo, while speaking recently at the Nigeria-Canada Investment Summit in Abuja, said the gold market in Nigeria worth £4 billion with high prospects of profitability for all players in the subsector.
He said based on this, the Nigeria’s most innovative banking service provider decided delve into the mining sector despite enormous risks.
Mr Sekibo, who was represented by the Team Lead, Agric Finance and Export, Adelana Ogunjirin, explained that prior to now, local miners of gold found it difficult to trade their commodities favourably, but with the involvement of Dukia and its partner, Heritage Bank, a Quality-and-Quantity test will be conducted based on the arrangement they made with Dukia Gold and that will lead to additional value to the small holder miners. He explained that this will leverage the small miners the opportunity to also trade their commodities at international market price.
He further stated that a metric tonne of Gold is currently valued at $30million adding that it is worth investing in the industry, especially as gold is a kind of commodity that does not easily lose its value.
“Mining sector is an area which has not been fully tapped in terms of the potentials around it, as there are quite a lot of opportunities around that sector. Recently we secured $1 billion funding line with our funding partner AfreximBank, which also is to support areas like solid minerals.
“Now with respect to this we have looked at the value chain of this space and we have looked at the opportunities that are there. A lot of fund providers have not really delved into this and it is because of the lack of understanding of the market,” he said.
“In terms of value, gold is an area where you can enhance the value. You hardly see Gold losing value and you see that in different exchanges you even trade those commodities.
“Looking at it in terms of trend, you see that gold is something that will appreciate definitely. So in terms of the profitability of this business, we have looked at it, the crunch, the numbers we see that is a space that the bank will definitely earn a lot of income,” he added.
The bank chief also expressed optimism that other banks would like to come into the Nigerian mining sector, but may be studying to understand the sector properly.
“Definitely other banks will come into the sector. For us we are leading, but the truth is they need to play in an area and space that they understand, as not everybody would be able to play in that space.
“Heritage Bank has already carved a niche for itself in agribusiness space, just like the Gold commodity, this would be exported. So, in terms of export proceeds too, there are opportunities to be explored. Generally, looking at the Nigerian outlook, on the long run, this will also enhance the country’s external reserves. There are multiplier effects of what we are doing today and that is why we are also moving in this direction,” the MD noted.
Also speaking, Managing Director, Nigeria Export-Import Bank, NEXIM, Mr Abba Bello, revealed that the bank had gone into high level discussions with heavy equipment manufacturers and suppliers that would lease equipment to miners for exploration and processing, adding that this was expected to make the equipment accessible and affordable.
“For equipment supplier or outright purchase of equipment, we have gone into discussions with Bluecare and now Mantrac for the supply of heavy equipment for gold processing or exploration on lease basis and, it is something that does not exist currently within the industry.
“Barrick Gold and Bullion Mart is something that happen in the mining world. You don’t have to own the equipment, but there are vendors who supply the equipment for explorers to hire.
“Discussions have gone very far with the equipment suppliers and very soon we will announce the programme,” Mr Bello said.
Meanwhile, the Country Manager, ITM, Nigeria, Ms Habibah Waziri, raised concerns on human resources development that would sustain the sector.
Ms Waziri also said there is need to formalize the sector and also invest in human capital in the sector for growth and development.
more recommended stories
COVID-19: Heritage Bank Disinfects Ikeja Branch
An Experience Centre (EC) branch of.
Ecobank Nigeria Reaffirms Support for Agric, SMEs
By Modupe Gbadeyanka Stakeholders in the.
Nigerian Banks to Witness Acute Funding Challenges
By Adedapo Adesanya A global rating.
Zenith Bank Retains Spot as Number One Tier-1 Bank in Nigeria
By Dipo Olowookere The Banker Magazine.
Ecobank in Final Lap of 5-year Growth Strategy
By Dipo Olowookere The growth strategy.
Fidelity Bank Supports Contractor of $2.8bn AKK Gas Project
By Dipo Olowookere The chief executive.
32.9% of Banking Sector Loan Portfolio Going Bad—CBN
By Modupe Gbadeyanka There are strong.
Stamp Duty: Access Bank Makes Refund to Customers After Uproar
By Modupe Gbadeyanka The management of.