Nigeria’s most innovative retail bank, Heritage Bank Plc, has disclosed its readiness to be a major player in Nigeria’s rich Gold market said to be worth £4 billion Pounds.
It said it intends to bring high prospects of
profitability to all players in the subsector.
The MD/CEO, Ifie Sekibo, stated this at the Nigeria-Canada Investment Summit,
held in Abuja.
He also disclosed that the enormous potential of
the industry was one of the reasons why Heritage Bank delved into the mining
sector despite the enormous risks.
According to him, the bank has Dukia Gold as its partner that would facilitate
access to local miners and artisans to get value for their commodity at
international market price after being registered with Dukia Gold.
Sekibo, who was represented by the Team Lead, Agric Finance and Export, Adelana
Ogunjirin, explained that the involvement of the bank in the sub-sector has
removed the challenges besetting local miners of Gold who have found it
difficult to trade their commodities favourably, adding that the involvement of
Dukia Gold 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 opportunity will enable small miners 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 depreciate.
He said: “Mining sector is an area which has not been fully tapped in terms of the potentials around it. Recently we secured $1 billion funding line with our funding partner AfreximBank, which meant 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. Fund providers have not really delved into this and it is because of the lack of understanding of the market.
“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 it is a space that the Bank will definitely earn a lot of income.”
He 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, 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.
Bello said, “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.”
Meanwhile, the Country Manager, ITM, Nigeria, Habibah Waziri, raised concerns on human resources development that would sustain the sector.
Waziri also said there is need to formalize the sector and also invest in human capital in the sector for growth and development.