LCCI calls for revatilisation of mining industry to drive investments
AS the federal government revoked 924 dormant mining licences, the Lagos Chamber of Commerce and Industry (LCCI) is calling on the government to revitalise the industry to drive investments.
Chinyere Almona, the director-general at LCCI said the organisation is deeply concerned about the performance of the Nigerian solid mineral sector and urges the government to be intentional about the revitalisation of the industry.
“We urge the government to review the mining industry strategy to attract mineral exploration investments, reignite mining project development, accelerate new mineral discoveries, and encourage optimal utilization of Nigerian mineral resources in line with the Environmental, Social, and Corporate Governance (ESG) principles for sustainable growth,” she said.
She noted that LCCI urged the government to address the sector’s funding issues and enable enhanced access to finance for processing value-added minerals based products by establishing seed funds and special incentives to attract foreign and domestic investors.
She stated that the Nigerian mining industry has recorded low performance in the last two quarters. Citing data from the National Bureau of Statistics (NBS), she said the mining and quarrying sector contributed 4.47 percent to the overall GDP in the fourth quarter of 2023, lower than the contributions recorded in same period of 2022 at 4.51 percent and lower than the previous quarter at 8.32 percent.
She said that despite the immense potential of the sector, the mining industry has been hampered by many obstacles, including inadequate infrastructure, regulatory inconsistencies, limited access to financing, and security concerns in mining locations.
“These challenges have collectively contributed to stifling growth, deterring investments, and impeding the sector’s ability to fulfill its role as a catalyst for industrialisation,” she noted.
As contained in the National Development Plan 2021-2025, Nigeria planned to have laid a solid foundation for the minerals sector to begin catalysing growth and industrialization in an environmentally sustainable manner by 2025, a year from now.
In response to the sector’s poor performance, the government launched a new mining roadmap in 2016 with the objective of building a world-class minerals and mining ecosystem designed to serve a targeted domestic and export market.
All of these were planned to position the sector to contribute 3.0 percent to GDP by 2025. Reaching this goal would lead to Nigeria’s global competitiveness and industrialisation aligned with the African Mining Vision, she noted.
“With just a year away, little has been achieved regarding Nigeria’s mining sector,” she noted
Despite Nigeria’s enormous mineral resources, the minerals sector is not a major engine of economic growth and receives little investment. The sector produces less than 0.5 percent of GDP with limited value chain in the economy. Nigeria’s solid minerals are exported with little or no value added.
While Nigeria intends to capitalise on the mining sector’s potential, it faces numerous challenges in mineral beneficiation and value addition. These regulatory and legal challenges include inconsistent policies, unclear land tenures, and issues between federal and state governments, particularly in the collection of royalties and taxes from licensed miners operating in their domains.
She advised the government to seek innovative ways of revitalising the Ajaokuta Steel Company Limited (ASCL) and the Nigerian Iron Ore andmining Company (NIOMCO).
“We have consistently advised that the model of the NLNG management can be adopted for this purpose. To ramp up investments in this sector, we need to deploy more relevant research and technology to trace more mineral deposits, and make more relevant data available to interested investors,” she reiterated.”