Tuesday 17 November 2015

Maximising Nigeria’s Solid Minerals Potential

Solid Minerals in Nigeria
by: Jide Ojo

A recent news report on the African Independent Television on Nigeria’s solid mineral industry got me thinking. Nigeria is too rich to be poor. Our only poverty, to my mind, is poverty of the mind to do the right thing. How can a country so richly blessed in natural resources be complaining of being broke? 

Countries like Cuba, Israel and Japan do not have a fraction of the natural endowments of Nigeria, yet they are developed countries by virtue of their ability to think out of the box. I know that many countries envy Nigeria and will like to trade position with us for the gargantuan natural resources at our disposal. They are ashamed for us; indeed mock us, for our inability to harness these God’s gifts for our national development. They term our experience a resource curse. Are we cursed or are we the cause? My humble submission is that we are the cause, and not that we are under any curse.

From time immemorial, successive administrations in this country have been parroting the same thing. They all pledge to diversify the country’s economy and wean it off its eternal dependence on a monoculture – oil. They promise to make agriculture the focal point of the economy. They talk of agric-business. Towards this end, they launched all manner of schemes such as Green Revolution, Back to the Land, and Operation Feed the Nation. They also pledged to focus on exploration and exploitation of Nigeria’s vast solid mineral deposits. Sadly, the initiatives have turned out to be largely a lip service.

My research findings on the state of Nigeria’s solid mineral sector were overwhelming. Did you know that this suffering motherland has 44 mineral resources many of which are in commercial quantities? Nasarawa State goes by the appellation “Home of Solid Minerals”. Indeed, it is, as it is, one of the most endowed states in Nigeria in terms of the availability of economically and commercially viable natural resources. These include clay columbite, ilmenite, mica, barytes, pyrite, galena, limestone, sodium chloride, ephalerite, silica sand, granites, and tantalite. Others are sphalerite, talc, gemstone (tourmaline, aquamarine and sapphire), halcopyrite, topaz, cassiterite, emerald, heliodor, amethyst, quartz, coking coal, marble, and iron ore.

Did you know that solid mineral explorations preceded oil and gas explorations in the country? While organised mining began in 1903, oil was discovered in Oloibiri, Bayelsa State in 1956. Have you heard that the commercial value of Nigeria’s solid minerals is estimated to run into hundreds of trillions of dollars, with 70 per cent of these buried in the bowels of Northern Nigeria?

In 2012, the Permanent Secretary of the Ministry of Mines and Steel reportedly said that from our precious metals, specifically from gold exploitation alone, Nigeria was losing N8tn ($50bn) annually. Sad, very sad! Experts are of the opinion that at the moment, mining of minerals in Nigeria accounts for only 0.3 per cent of its GDP due to the influence of oil resources.

According to NEITI audit report on solid mineral operation in Nigeria, there are six buying centers, nine dredging companies, 11 exporters of solid minerals, 14 medium scale mining companies, 35 commercial quarries, 54 construction quarries, eight quarries for manufacturing giving a total of one hundred and 37 activities in the solid mineral sector of the Nigerian economy.

A report on the Physical and Process Flows in Nigeria Solid Minerals Industry 2011 prepared by Haruna Yahaya & Co. (Chartered Accountants) reportedly indicates that there are no adequate records of operations in the sector. It further reveals that though the Nigeria Minerals and Mining Act 2007 requires that any exporter of solid minerals must request permit to export minerals, in defiance to the Act, there is no available evidence of request for permit or approval to export minerals by the companies.

The report further says, “The informal players are mostly artisan miners, medium scale operators and illegal miners who hardly keep any record. Some of the minerals mined in Nigeria are exported out of the country by both formal and informal players. There are no official records from the Ministry of Mines and Steel Development on the actual volume of minerals exported out of Nigeria within the period under review.” Isn’t this mind-boggling!

Experts say that development of mineral resources is the foundation upon which an industrialised economy is built, and this is essential if Nigeria is to reduce over-dependence on the oil industry – a sector which, despite the revenue it generates, provides employment for just six per cent of the Nigerian labour force. At present, the Federal Government owns, controls and monitors the exploitation and exploration of natural solid mineral resources. However, nothing stops the various states where these solid minerals are located from applying for licence to explore and exploit them just like private investors currently do. Quite unfortunately, low level capacity to manage solid mineral exploration, lack of political will, and corruption have made this option to be unsuitable to them.

It will be recalled that government-owned solid mineral exploration companies in the past have had to be sold off completely or concessioned to private investors. The unpleasant stories of Ajaokuta Steel Complex, Aladja Steel Rolling Mills, Osogbo Steel Rolling Mills and Oluwa Glass Industry in Ondo State still rankle.

It has been suggested that a simplification of the procedures for obtaining mining licences is key to future development of the solid mineral sector. In the past, efforts to generate growth in the industry had allegedly been thwarted by bureaucracy and the absence of a focused federal policy. Therefore, the emphasis should be on providing transparent procedures that will help develop an industry led by the private sector. Tax concessions, deferred royalty payments, availability of social infrastructures such as good roads and rail network, electricity, pipe borne water, security, and reliable dispute adjudicatory systems are among the incentives that can encourage investment.

While President Muhammadu Buhari’s administration works at that, it is also important for the regulatory bodies in the solid mineral industry to enforce punishment against legal and illegal miners who are daily causing environmental degradation in their host communities. In the earlier referenced AIT news report, there were footages of how artisanal miners dug over 300 mining pits in an Ijesha community in Osun State. A similar story was reported at a limestone mining site in Kogi State. All licensed miners must be forced to adhere strictly to their corporate social responsibility initiatives while the illegal miners must be apprehended and prosecuted in courts for their illicit acts.

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