The 10-year mining roadmap also aspires
to build a world class minerals and mining ecosystem designed to serve a
targeted domestic and export market. This became imperative to utilize the vast
opportunities in the mines and steel sector and bring about a significant shift
from the series of illegal activities and sabotage occasioned by illegal
mining. The roadmap also plans to address the numerous issues affecting the
sector and placing it on a global map. It highlights immediate, short, medium and
long-term timelines for key actions.
The number of minerals in the country
does not count for much, given that the mining sector does not seem to have a
single mineral resource that is proven to be of significant economic quantity.
In order words, the mineral deposit that is termed commercial in one location
may not be of economic value in another.
At best, what this sector shows is promising
potential which suggests that the country is not a mining nation. Botswana is
the leading country in Africa with the highest GDP (38%) contribution from
mining, with heavy reliance on diamond. Ghana’s pride is gold which contributes
about 7% to its GDP. It is ironic to know that around 2013, President Alpha
Conde of Guinea asked Nigeria for help to develop his country’s mineral sector
which is the mainstay of that country’s economy. When there was a change of
government in Guinea that led to the lockdown of the country, they ensured that
the mining sector was not affected. That was significant. That played a huge
role to give investors a sense of protection of their investments.
What Nigeria needs is to steadily invest
and grow the available mineral resources to a point where they become viable
for mining. There are risks involved and that’s why banks find it difficult to
lend to the sector at this level. Until minerals are mined, they don’t
constitute any economic value. Minerals in the ground are worthless unless they
are taken out of the ground. The various aero-magnetic or geological surveys
carried out don’t generate information for commercial exploration mining. There
is the presence of mineral deposits which are not commercially viable. The
geological survey data is supposed to attract investors who will do more work
to generate data that can lead to mining through exploration.
The cost of generating data is quite
high. Local miners don’t have the resources and know-how to generate their own
data. They even require approval from government to proceed with generating
data because some data are of strategic nature.
Mining exploration takes time.
Investment in exploration was done for over 30 years before Oloibiri was
discovered. Where there are explorations certified by Competent Persons Report,
there will be mining jurisdictions and bankable data that can attract big
investors. There are also junior mining
companies that generate information and sell it to the bigger players who in
turn add value to exploration work.
There have been enough road shows to
promote the mining industry internationally but the big names are not coming to
invest in the manner expected. The reasons are not far-fetched.
The 2021 NEITI Audit report revealed
that the mining industry produced inverted economic results. The mineral that
is mined the most is limestone which constituted almost 47% of the mineral
production in a given year of the audit. Construction materials - granite, sand, laterite, dust, among others,
constitute about 48% of mineral production. Coal used for cement making constitutes
about 2%. It appears it is only in this country that coal is used to produce
cement because of lack of energy. The audit report shows that the mining industry
has not grown through exploration the reserves that it needs for mining.
Nigeria’s inability to fully exploit its
solid minerals potential is largely due to the absence of requisite mining
infrastructure. Mining today in the country is still predominantly artisanal
with the preponderance of illegal miners whose activities do not generate
revenue for the government.
Artisanal miners are not considered as
illegal. It is the responsibility of the Artisanal Small Scale Mining
Department to organize them to form cooperatives so they can become
co-guarantors and be granted small scale licences to operate. At the moment, there
are foreigners who ride on the back of artisanal miners to commit illegalities.
A lot of solid minerals leave our shores
in raw form; they get beneficiation and imported back into the country having
been processed into semi-finished products for use in the paint and
pharmaceutical industries, among others.
The 2007 Minerals Act has certain
contradictions that need to be straightened out to make it seamless to operate
in the sector. There has been the lingering frosty relationship between state
governments and the federal authorities. The problem emanated from the emerging
policies or laws in the sector. Essentially, operations in the sector are on
the Exclusive Legislative List. There are instances where the state would like
to partake in the implementation of some of the policies but they meet a brick
wall because those leverages are only exclusive to the federal government. The
states are encouraged to participate in mining as corporate entities. There is
a body that state governments set up to liaise with artisanal miners. What is
not clear is how much of this is a challenge to miners in terms of either
overlapping or conflicting jurisdictional authority over sites and mining
operations.
Before the 1972 Indigenisation Decree,
the mining sector was contributing well to the economy because it was more or
less 100% privately run. But with the introduction of the Decree, the government
nationalized businesses in the country. The mining sector was grounded through
government control of parastatals.
There have been efforts at revitalizing
the mining sector with a view to diversifying the economy. The reconstitution
of the Board of the Solid Minerals Development Fund (SMDF) and the Bank of
Industry’s launch of N5b fund to provide single digit interest-free loans for
mining projects, set the ball rolling.
The Nigerian Institute of Mining and
Geo-Sciences Jos Establishment Act received presidential assent in November
2016 for research and training of manpower for the sector. The federal
government in 2018 also presented a roadmap for the development of Nigeria’s
industrial minerals developed by the World Bank-assisted mineral sector support
for economic diversification projects.
There was the Buhari-led government
launch of gold purchase programme as part of the presidential artisanal gold
mining development initiatives designed to put a stop to illegal mining,
standardize the activity and mobilize the enormously untapped resource
potential in the sector.
There’s also a strategic focus on
bitumen and steel to harness their full potential for economic development and
to position the sector to contribute 3% to the country’s GDP by 2025. This is a
far cry from expectations but quite an ambitious attempt in the short-term.
There is a need to do some reengineering
of the solid minerals sector. The creation of the Mining Surveillance Police to
check insecurity at mining sites is good. The federal mines officer in each
state is mandated to go to remote locations. The Mineral Resources and
Environmental Management Committee (MIREMCO) at the state level is supposed to
be the fulcrum on which the Mining Act rests. The role of the committee is to,
among other functions, address the activities of illegal miners.
These steps including road shows have
been taken to attract investments. Unfortunately, it appears the efforts have
not gained traction in terms of attracting the right investments. There are the
challenges of security and mining infrastructure, among others.
There are certain ingredients that a
typical international mining investor requires. There must be the endowment of the
minerals they are looking for. That means the terrain of geology is known to
have possibilities for commercial discovery for a particular mineral.
There should be the security of the
mineral right holding. Every investment is tied to a mineral permit. Government
should not revoke mining licences no matter how bad they are but should use the
instruments of regulation to deal with any licence that is not legal. This is
important because whenever mention is made of mining licence cancellation, other
investors get jittery.
Incentives should be given to investors for
repatriation of capital and deferment of payment of taxes, among others.
Moses Amadi
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