By Dele Alake
….A significant and interesting fact is that the solid minerals sector that was exploited by the colonial government for export contributed 4.5 percent to Nigeria’s Gross Domestic Product in the ’60s, and 5.6 percent by 1980 accounted for less than 2 percent of Nigeria’s GDP last year. To demonstrate the gravity, compare this performance to the records of less-endowed countries such as Senegal (20%), Mauritania (24%), and Namibia (50%).
How did a country with industrial, energy, metallic, construction, and precious minerals, including gold, manganese, bitumen, lithium, iron ore, lead, zinc, limestone, uranium, columbite, barite, kaolin, gemstones, coal, topaz, copper in massive proportions fail to use these resources to liberate the citizens? At the last count, our estimated reserves include Gold (1 million ounces); Limestone (568 metric tonnes), Lead/Zinc, Baryte (15 million metric tonnes), Bitumen (N1.1 billion barrels), Iron Ore (3 billion Metric Tonnes) and Coal, (N396 million). How did a sector with over 2 million operators, including over 633 small-scale companies and 251,500 registered miners, struggle to give the economy capital and human development?
The reasons are no longer invisible. Studies and practical experience in the field have identified several factors, such as inefficient geo-data, weak implementation and enforcement, poor environmental, safety, and health policies, fragility and conflict, unregulated artisanal mining, low technical capacity, lack of access to financing, weak inter-governmental and inter-agency co-ordination and weak federal/state relations over mining land as the severe barriers to the development of the sector.
I wish to commend my predecessors in office for their strenuous efforts in responding to these challenges. These efforts have led to the adoption of a roadmap that prioritises the need for precise, geoscientific data, better investment climate, intervention in the solid minerals value chain to promote additional value, options for funding the sector, and improvement in fiscal relations between the Federal Government and the state as regards lands used for mining.
Presidential Mandate
In line with the Renewed Hope Agenda of Mr. President, the Solid Minerals Ministry is mandated to develop the Solid Minerals Sector by learning from the achievements and mistakes of the domestic hydrocarbon petroleum industry and applying international best practices. We have been mandated to improve on the formulation and regulation guiding prospecting, quarrying, and mining; improve data gathering; monitor and organize more efficiently the sale and consumption of minerals and increase revenue accruable to the Federal Government from the issuance of permits, licenses, leases and the collection of rents, fees, and royalties.
The Transformation Agenda
• Nigerian Solid Minerals Corporation
• Joint Ventures with Mining Multinationals
• Big Data on specific seven priority minerals and their deposits
• 30-day grace for illegal miners to join artisanal cooperatives
• Mines Surveillance Task Force and Mine Police
• 6 Mineral Processing Centres to focus on Value-Added products
President Bola Tinubu has taken firm, courageous decisions that have reset the logic of the Nigerian economy. The removal of subsidy and the adoption of a single exchange rate are among the fundamental transformational policies of this administration. This radical approach to making the economy resilient in the long term is the guiding principle of the management of the Ministry. The Ministry has to take the bull by the horns if the country must reap the harvest of the trillion dollars worth of minerals under the ground across the country. To achieve this laudable objective, there has to be a paradigm shift in the strategy by re-positioning the sector in terms of the human and capital factors that can drive its transformation.
The defining characteristic of a serious mining industry is capital formation based on investment activity powered by precise geoscientific data that is transparent and accessible.
Mining is big business. Nigeria must assert its presence in this environment by replicating its strategic positioning in the petroleum sector by setting up a corporate body that plays in this field. Consequently, the Ministry shall work towards the incorporation of the Nigerian Solid Minerals Corporation. This is a corporate body that will have subsidiaries doing business in the seven priority areas that require immediate intervention and focus: Gold, Coal, Limestone, Bitumen, Lead, Iron-ore and Baryte. Existing enterprises, such as the National Iron-Ore Company, and ongoing arrangements, such as the Bitumen Concessioning Programme, will be reviewed to fit into this new system.
The proposed corporation will seek and secure partnership investment agreements with big Multinational companies worldwide to leverage on the attractive investment-friendly regime operating in the country to secure massive Foreign Direct Investment for the mining sector. The positioning of the national corporation as a guarantor and protector of the partnership agreements is expected to assure partners of our seriousness and fidelity.
Similarly, the Solid Minerals Corporation will provide robust support for Nigerian businessmen seeking funding abroad and help to authenticate their investment proposals to speed up the commitment of their partners to invest.
Domestically, the Solid Minerals Corporation will engage the Nigerian financial system, which has demonstrated palpable reluctance to support mineral prospecting and mining because of the long-term gestation of value generation by developing a Fund to facilitate investments in mining at interest rates that will be mutually agreed.
The emergence of the Corporation in the business of mining will enable the Ministry to focus more on its core regulatory and promotional mandates of sanitizing the sector and developing ideas, processes, and institutions that facilitate the ease of doing business in the industry.
Gathering the Big Data
Accordingly, the most urgent, immediate, and critical precondition for the real take-off of the sector is the gathering of precise geological data. Don’t get me wrong. A lot of funds have been expended on gathering data on the occurrence or incidence of minerals across the country. This significant exercise has been very positive in uncovering the locations of minerals in each town or local government in the country. The Cadastral agency has elaborate data and a map depicting the areas of mineral deposits.
However, as resourceful as this is, it is grossly insufficient to make investment decisions. An investor is not just interested in the location of a particular mineral. They want to know the quantum in depth and area before deciding on the cost and profitability. This lack of precision of our current data has impeded investment. It has turned licensees into star gazing, uncertain, unsure entrepreneurs praying for luck to strike the amount of deposits that can offset their investments instead of confident, assured risk takers sure that the accurate, scientific data at their disposal are reliable enough for their investment projections. Without robust, precise, and accurate data internationally authenticated by the geoscience community and transparently published for easy verification and adoption, international investment will be a pipe dream. The Ministry of Solid Minerals shall soon propose to the Federal Executive Council a precise investigation of selected deposits of the seven priority minerals- Gold, Coal, Limestone, Iron-ore, Bitumen, Baryte, and Lead/Zinc – to scale this hurdle. Other minerals will feature in subsequent investigations under the National Integrated Mineral Exploration Project, NIMEP.
Promoting International Investment
Such fundamental progress, as outlined above, will provide content for aggressively promoting our mineral deposits for investment. We shall organize country visits and tours, exhibitions, conferences, advertisement campaigns, and presentations to tell significant stakeholders in the global industry that Nigeria is the next profitable destination for investment. Already, we are reviewing the draft Nigerian Mining Act in comparison with economies that have recorded significant achievements in Foreign Direct Investment in Mining to introduce international best practices. We are also exploring how to secure local content in the emerging industry to ensure a fair deal for Nigerians by reviewing the reports of the Nigerian Extractive Industries Transparency Initiative on the Solid Minerals Sector.
Securing the Investment Environment
An equally necessary precondition for investment in the sector is securing the investment environment. There is a consensus among all stakeholders in the industry that the most pernicious obstacle to the security of the investment environment is the massive presence of illegal miners. It is quite understandable that mining activities are like a second occupation for many farmers and traders in areas where deposits are found. The demographic, economic, and security implications of their roles have encouraged, on the part of the government, the formalization of their role by organizing them into co-operatives registered by the government for the transition from illegal miners to artisanal co-operatives; this strategy has led government through the Solid Minerals Development Fund and other agencies to foster their human capacity development through training in modern mining methods or technical competencies in information communications technology, mechanical and electrical repairs of mineral exploration machinery and business methodsbookkeepingk keeping.
Furthermore, the strategy has led to institutional formalization through the construction of various markets by the Ministry. Such markets include the International Gemstone market, Ibadan, Oyo State, Kaolin Processing Centre, Alkaleri, Bauchi State; Lead/Zinc Processing Centre, Ubulu, Abakaliki, Ebonyi State; Baryte Processing Centre, Ogoja and the Gold Souk, Kumbosto, Kano State.
It is obvious that government’s strategy for the development of the sector has been driven by the accommodation and mainstreaming of artisanal miners. However, despite these generous and patriotic gestures, there exist till exists those who have defied all entreaties to join co-operatives and be formalised. They prefer to continue to operate as illegal miners.
For the last time, let me declare that the Ministry is giving such persons 30 days grace to join a miners’ co-operative or find another vocation to do. On the expiration of the period, the full weight of the law will fall on anyone seen on a mining site without a determinable status. This message will be interpreted into Nigerian languages and broadcast on the radio to ensure no one is ignorant of this directive.
From October, a rejuvenated security regime will become active in the solid minerals sector. This will include the Mine Police, sourced from the Nigeria Police and specially trained to detect illegal mining and apprehend offenders. The new Mines Surveillance Security Task Force will coordinate the Mines Police and pro-actively address high risk incidences of breach of Mining Laws. The Federal and State governments will also be encouraged to allocate the prosecution of cases against illegal miners to competent courts.
A regular source of conflict and insecurity is the management of community relations by mining licensees. Whereas the Mining Act recognizes minerals under the ground as the exclusive property of the Federal Government, it also elaborates the need to engage communities whose hitherto peaceful and orderly environment may be disrupted by the investor about to activate a mining license. It is in the interest of peace and order not to arrogate reckless appropriation of communal resources in the guise of executing a license.
Therefore, while the Ministry will continue to review the standard operating procedures for engaging communities within mining licences, communities are hereby encouraged to form committees which can address the concerns of their members on compensation before exploration, employment during exploration, quarrying, and mining and sustainable community socially responsible programmes during and after rehabilitation of mined sites. Officials of the Ministry have been mandated to prioritize this and facilitate the appropriate appropriation to maintain peace and harmony in the communities.
▪︎ Alake, the Minister of Solid Minerals, presented this address at a press conference in Abuja on Sunday, September 2, 2023. His address was titled: AGENDA FOR TRANSFORMATION OF THE SOLID MINERALS SECTOR FOR INTERNATIONAL COMPETITIVENESS AND DOMESTIC PROSPERITY
