FG ignores Nigeria’s multibillion naira gemstone deposits
Gemstone business is a big income generator and Nigeria should be making good money from it. But it is not. Nigeria is endowed with abundance of precious and semi-precious stones that can fetch billions of dollars on the world market. Gemstones like sapphire, ruby, aquamarine, emerald, tourmaline, topaz, garnet, amethyst, zircon and others are available in large quantities. Paraiba tourmalines found in Oyo state, for instance, could go for as much as $5,000 per carat, say experts.
A global report asserts that scarce precious gems like beryl and aquamarine, sapphires, zircon in bubble-gum pink and watermelon tourmaline grades from green to red can be sourced from only Tibet, Nigeria, Afghanistan and Brazil.
Gemstone mining has boomed in various parts of Plateau, Kaduna and Bauchi states for years. However, the availability and distribution of these minerals is not the subject matter; what is is the seemingly lack of information on the investment opportunities available in this sector.
In the international market, there are many factors that determine prices between one gemstone and the other. For example, a carat of ruby can cost $10,000 depending on its quality. The better the clarity, the higher the cost. Also sharp coloured and smoothly cut stones attract higher costs. The bigger the stone, the more it is per carat. Within each variety, prices are based on these qualities, with colour being the most important factor.
According to Mrs. Winifred Ekanem Oyo-Ita, lately Permanent Secretary Federal Ministry of Science and Technology, who is now the acting Head of the Civil Service of the Federation, at a recent gemstones exhibition held in Abuja, gemstones can command premium prices in both local and international markets only when they are carefully cut, shaped and polished. Oyo-Ita lamented that sadly, the gemstone processing stage is lacking in Nigeria.
“There is no official market for gemstones display in Nigeria, neither has there been any estimated reserve of the quantity being mined or traded,” she added.
Oyo-Ita further illustrated the foreign exchange potential of the resource. “A Nigerian blue sapphire that weighed 4.03 carats was sold for $8,625 in the United States of America recently. That is to say that it cost about $2,140 per carat. It therefore shows that good quality Nigerian sapphire can fetch a lot of money. One kilogram of polished sapphire is 5000 carats, hence 5,000 by 2,140 equals N2.1bn, which is equivalent of 214,000 barrels of crude oil at $50 per barrel,” she said.
Interestingly, in September 2014, the Gemological Institute of America (GIA) reported that a source of high quality blue sapphire was found in the Mambilla Plateau, of Taraba State. According to the report, samples were taken to the GIA laboratory in Bangkok and the rough gems were found to be not only of good quality but were also available in large sizes, some ranging from 100 to 300 carats.
From the laboratory analysis, the first elements that were pointed out suggested that the sapphire deposits provided “a winning combination of size, high clarity, attractive colour and good crystal habit from a cutter’s perspective.” The discovery reportedly caused considerable excitement in the Bangkok marketplace.
Oyo-Ita further illustrated that a Nigerian rubelite tourmaline of 5.62 carats was also sold for $1,011, approximately $180 per carat. According to her, “one kilogram of polished tourmaline, which is 5000 carats, will sell for $180 by 5000, which equals $900,000 by N198 to give a whopping N178.2m, which is equivalent to 18,000 barrels of crude oil at $50 per barrel.
Godfrey Uche Nwadike, an International Coloured Gemstone Association (ICA) for anyone willing to make the needed investment.
In 2005, a home-grown mining intervention was conceptualized. The Sustainable Management of Mineral Resources Project (SMMRP) was provided with a $120m World Bank credit to increase government’s long-term institutional and technical capacity to manage Nigeria’s mineral resources in a sustainable way. It was also meant to develop nonfarm income generating opportunities through smallscale artisanal mining.
The immediate past Minister of Mines and Steel Development, Architect Musa Sada put in place a comprehensive gemstone development programme. It included a training on gemstones awareness and identification, gemstone Artisanal and Small-scale Mining (ASM) mastermining techniques, the establishment of an international lapidary and the development of gemological training platforms and gem-buying centres.
But if all of these developmental strides have been properly put into use to achieve the desired results remains an issue of debate. A gemstone expert and professor of Mining Engineering, Zaccheus Opafunso, in a recent chat said Nigeria has failed to harness the full potential of the available gemstones due to the overdependence on crude oil.
“The gemstones sector in Nigeria is severely constrained, with most operations unguided and unregulated. Policies in place are inadequate, and generally gemstone miners are untrained and contribute hugely to environmental degradation, poor quality operational techniques and loss of minerals. This has caused substantial losses in revenue to the country by way of exports, as well as through royalties and taxes,” he lamented.
While calling for a total overhauling of the legislations regulating the titles and licences for mining operators, Opafunso believed that an improved and adequate legal framework would phase out illegal mining and full potentials of the nation’s gemstones achieved.
In her submission, Mrs OyoIta promised that as the nation seeks to diversify into a non-oil revenue base, the government would continue to partner with relevant stakeholders to create a conducive environment and attract potential investors into the solid minerals sector through necessary incentives and support. According to her, efforts are already being put in place to rejuvenate activities in the gemstones mining sector to minimize smuggling and at the same time attract huge investments into the sector.