Solid Minerals: Nigeria’s neglected cash cow
Mining as major economic activity has a long history in Nigeria. Its importance could only be compared to agriculture as both sectors were once the only sources of production in the Nigerian economy. To this day, mining is still a source of livelihood for a vast community of artisanal and small-scale miners spread across the country.
Coal and tin were mined and exported on a large-scale for many years prior to the oil boom of the mid 1970s. However, the discovery of crude oil in commercial quantity in the Niger Delta in 1956 led to a sharp shift of focus away from the development of the solid minerals sector. This neglect lasted long, and was further compounded by the global energy crisis of the 1970s, which created a windfall in foreign exchange earnings for crude oil producers worldwide.
A frontline mining consultant and one-time coordinator of the World Bank-Assisted Sustainable Management of Minerals Resources, Mr. Linus Adie decried the near state of neglect which the sector has found itself in Nigeria. According to Adie, the economic potentials lying untapped in the solid minerals sector are enormous, and can completely transform the economic fortunes of the country.
“With dedicated funding and strict supervision of the sector, developing our solid minerals
a sphere is capable of elevating the country’s economic status beyond imagination,” he said in a recent chat.
According to a report by Wardell Armstrong in May of 2007, there is documentary evidence that not less than 75 solid minerals of economic and commercial relevance abound in Nigeria. According to the report, economic minerals like coal, bitumen, iron, gold, emerald, diamond, limestone and feldspar are spread abundantly in almost all the states of the federation.
It was, thus, heartwarming, when in 2005, the government secured a $120 million concessionary loan from the World Bank to develop the sector. The project was coordinated by Adie.
“The Sustainable Management of Minerals Resources Project (SMMRP) was one of the best things to have happened in the solid minerals sector. The first thing we did was to come up with baseline studies of the field and offices and then identify areas of intervention. We introduced the mining code and then did a study of the fiscal regimes that were competitive with other countries in the world,” he said.
But from the time of the launch of the SMMRP till present, not much can be said to have been achieved in the sector, especially as it concerns contribution to the country’s gross domestic product index and job creation, as well as exportation potentials. Rather, the sector has been subjected to the crude implements of artisanal and small-scale miners, illegal foreign miners and, most unfortunately, environmental degradation, illhealth and preventable deaths in local mining communities.
Statistics show that the country has about 210,000 miners of which 90 per cent are currently informal, and according to the Nigerian Gross Domestic Product report of the National Bureau of Statistics, the contribution of mining and quarrying to the nominal GDP in the third quarter of 2014 was recorded at 10.26 per cent. This, according to stakeholders, can be considerably improved upon.
“In terms of the upliftment of the general economic standard of this country, mining holds the key. It may not be to the extent of crude oil, but we can go very far. But most importantly, in terms of employment generation, it will definitely surpass that of oil,” were the words of Mr. Ndubusi Nwegbu, the Director-General of the National Geological Survey Agency (NGSA).
Unfortunately, successive Nigerian governments have shown little interest in adequately funding the minerals sector, leaving the Mines ministry to grapple with very scarce resources, which mostly is used to fund staff remuneration packages and other skeletal projects.
According to Mr. Adie, if only government would re-orientate itself on the enormous benefits of properly funding the sector, the Nigerian economy would be better for it. “What we should be talking about now is a dedicated fund if we wish to develop the sector. Government needs to set aside funds to revamp the sector; making budgetary allocations alone won’t be of much help as there would be the regular political interference coming to bear,” he noted.
But apart from dedicating special funds to the sector, experts also believe that proper government legislation would go a long way in addressing some of the bottlenecks encountered by prospective mining investors in the Nigerian solid minerals sphere.
To this end, the immediate past minister of Mines and Steel Development, Architect Musa Mohammed Sada, set in motion a number of activities aimed at getting Nigeria a sector-oriented, globally-attractive mining regulation document. Sada upgraded the Mining Cadastre Office, an agency responsible for granting and administering mining titles in an objective, efficient and transparent manner.
“Architect Sada’s tenure witnessed policy stability and sustained implementation of the mining reforms programme. He broke the logjam on mining regulations, and consolidated the gains of mining reforms through strict adherence to policy stability and consistency. He also took farreaching steps towards the Solid Minerals Development Fund. He strove to achieve a lot but was greatly constrained by inadequate funds,” Adie commended.
But for all of these policies to be sustained and brought to fruition, experts believe more needs to be done in order to properly harness the potentials of the sector.
Professor of Mining Engineering, Olaniyan Zacheus Opafunso of the Federal University of Technology Akure (FUTA), said the creation of a solid mineral market would facilitate the growth of the sector and increase earnings, especially for small scale miners.
“The federal government should create mineral buying and selling markets for small-scale miners. If properly managed, the markets can generate a large proportion of earnings from artisanal and small-scale mining. Also, mining consultants and mineral property agents must be involved. These agents will facilitate the growth of a thriving minerals industry in Nigeria,” he suggested.
But facilitating the growth of a thriving minerals industry might not be complete without removing bottlenecks such as the illegal activities of foreign miners. According to the president of the Miners Association of Nigeria (MAN), Alhaji Shehu Sani in an interview he granted Daily Trust recently in Abuja, illegal activities of some foreign miners, if not checked, would continue to impede the growth of the mining sector in Nigeria.
“As far as mining in Nigeria is concerned, it is open to different players, some of them international players. This is because Nigeria, like most mining nations, is interested in attracting foreign investments. As such, encouragement is given to these foreign mining companies. “However, some of them come with questionable motives. They simply come to study government’s weakness in mining regulations, obtain exploration licences and start mining without legal mining permits. This is unacceptable,” Sani declared.
Adie advised the present administration to give the sector the much-needed attention, saying it would be an economically wise decision if the country indeed wants to diversify its income source.
“Going forward, government needs to scale up the level of exploration on minerals considered to be strategic to the economic development of the country. The financial systems also need immediate strengthening. Mining must be mainstreamed in the MSME programmes.
“Capacity building to local banks in evaluating mining projects is also important. The artisanal and small scale operators should be organized and given extension services, facilitate their access to finance and provide basic infrastructure for their growth. Short-term strategies should be articulated to add value and beneficiation of mineral products such as gemstone polishing and jewelry making, dimension stone and coal briquettes,” he advised.