MONDAYBUSINESS Solid minerals: States wake up to explore potentials
The first Northern Nigeria Solid Minerals Fair and Workshop organised by the Kaduna State Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA) in collaboration with PROEDGE Limited brought voices to the table on how to revamp the ailing solid minerals sector in Nigeria.
The fair and workshop which lasted for three days from May 16 to 18, 2017, brought experts from the Northern Region together to brainstorm on how to explore the nation’s solid minerals for successful integration to diversify the economy from the over dependence on revenue from oil.
Nigeria is blessed with a huge endowment of solid minerals widely distributed across the different geographical belts of the country. Prior to the crude oil boom of the 1970’s and 80’s, solid minerals such as coal, tin and columbite, among others, contributed immensely to the Nigerian economy. In fact, it was gathered that coal was the major source of power generation, as well as the main source of power for the railway transport system in Nigeria then.
Also, earnings from solid minerals were used to develop roads, education, hospitals, as well as the petroleum industry. Alas, the decline in the solid minerals industry in Nigeria began with the discovery of crude oil which resulted in the country becoming a mono-product economy.
Speaking at the fair, Minister of State, Ministry of Mines and Steel Development, Abubakar Baba Bwari, called on state governments in Nigeria to provide infrastructures, including roads and electricity, among others, in mineralsendowed areas for the purpose of making such resources attractive to investors, thus creating additional window for improving their internally generated revenues.
Bwari, who was represented by the Director, Nigerian Geological Survey Agency, Luke Abu, also urged state governments to establish purpose vehicles for their states for the purpose of partaking in mineral resource development and exploitation. According to him, Nigeria used to be the sixth producer of tin metal in the world and the leading producer of Columbite arising from tin ore and columbite mining on the Plateau, parts of Kaduna, Bauchi, Nasarawa and Kogi states.
He said the exploration activities of the agencies and the Ministry of Mines and Steel Development, as well as the activities of mining operators in the region had confirmed the existence of a variety of mineral resources, including metallic minerals such as iron ore, gold, lead, zinc ores, tin ore, columbite, tantalite, nickel etc, as well as non-metallic minerals such as limestone, calcite, barite, kaolin, talc, bentonite, feldspar and trona, among others in the region.
Others include mineral fuel including coal, gemstones such as tourmaline, aquamarine, sapphire, topaz, amethyst, etc; dimension stones such as sand and stone aggregates.
The current administration, in its quest to diversify the nation’s economy away from oil improved funding and support to the mining sector through improved budgetary allocation with the approval of N30billion intervention fund and the Natural Resources Development Fund, as well as the $150million World Bank Assisted Mineral Sector support for economic diversification projects, he said the bulk of the money would be utilised for geosciences, data generation, as well as providing necessary infrastructure and support for monitoring and enforcing the provisions of the Nigerian Minerals and Mining Act 2007, especially illegal mining and mineral commodity smuggling.
While he stated that the minerals and metals sector had in place a conducive policy, laws and regulations, as well as attractive incentives for investors; he appealed to KADCCIMA to assist the ministry in curtailing illegal mining operations by urging members to operate in line with the provisions of the Nigerian Minerals and Mining Act 2007 and its regulations of 2011, in addition to other laws regulating mining operations in Nigeria.
Also, the Minister of Mines and Steel Development, Dr. Kayode Fayemi, maintained that the solid minerals sector held the key to the successful implementation of the general well-being of the nation. “In order to achieve this, adequate regulatory frameworks and investment friendly policies have been put in place to attract genuine investments and fast track effectiveness in the sector. The policies include security of tenure of mineral titles, transparent procedures for granting access to mineral titles on a first come first serve basis, internationally competitive mining incentives, comprehensive geosciences data of mineral deposits and their locations in Nigeria, among others,” he stressed.
On his own part, the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Waziri Adio, stressed that the exploration of Nigeria’s solid minerals to diversify the economy would not attract requisite foreign investment except commitments were made by government to check fiscal instability, multiple taxation and outrageous demands by host communities.
Presenting a paper titled ‘Transparency and Accountability in Improving Performance in the Solid Minerals Sector’ Waziri, who was represented by Engineer Ahmed Bassi, said that an enabling environment for guaranteed solid minerals investment might not be attained until matters of multiple taxation and uncertain fiscal environment were addressed.
Similarly, the Director General of the Raw Materials Research and Development Council, Dr. Hassan Doko Ibrahim, in his contribution, disclosed that as at 2015 more than 4,000 mineral titles were granted, two-third of which were issued to operators in Northern Nigeria. He, however, condemned the attitude of Nigerians selling titles to investors for immediate financial benefits.
Sokoto State Commissioner for Solid Minerals and Natural Resources Development, Barrister Bello Muhammad, in his remarks, expressed support for the establishment of a Solid Minerals Bank, and also cautioned state governments against imposing tax burden on miners in the guise of revenue drive.
He suggested that part of the 13 percent Derivation Fund in the bill sponsored by Senator Tijani Kaura from Zamfara which was before the National Assembly, be devoted to developing the solid minerals sector.
To the Bank of Industry, a key challenge in the solid minerals industry is inadequate access to loan facilities to procure site equipment based on long term loan. The acting Managing Director, Bank of Industry (BOI), Waheed Olagunju, while presenting a paper titled ‘Enhancing Capacity of SMEs in the Solid Minerals Sector’, the BOI template noted that banks favoured short term loans as opposed to long term financing required in the mining sector.
He stressed that high cost of capital remained a huge challenge in the steel industry owing to the capital intensive nature of the sector. He further identified inability to raise enough equity and the unwillingness of financial institutions to fund the sector as challenges, saying it required huge capital to set up a steel plant and long gestation period for profitability.