FAYEMI: INDIGENISATION POLICY OF 1970S DESTROYED NIGERIA’S MINING INDUSTRY

organising them so that they have safer mining practices, access to finance and tools rather than using shovels and diggers.

…Hold on first because on the second part we are still going to talk about the illegal mining. But beyond that what else are going to do with that fund?

Beyond the illegal mining, we are going to use it (the grant) to improve the geological prospectivity. Mining is about research, it’s about data. If you don’t have information on what you have that is bankable, nobody is going to come into your country? So we are spending a lot of that money to improve the quality of the data we have, on mineral resources we have in Nigeria.

That’s a very good thing to spend your money on. I think a lot of people will agree with that. But you know Minister; you are not really diversifying properly. Are you? Because with Nigeria shifting from dependency on oil, which is one commodity to mineral resources, which is another set commodity, you are still stuck in commodity rot and therefore, subject to the vagaries of fluctuations of the commodity market, which is what has forced you to attempt to diversify away from oil in the first place?

Yes and no. Ultimately, we are not going to ignore the resources that God has endowed us with. However, I said something earlier that ultimately, it is the human capital in Nigeria that will take us out of this poverty trap. That is why if you look at the Economic Growth and Recovery Plan, we are investing on people.

…we are talking about industrialisation?

Yes. We are looking at industrialisation particularly of the small and medium scale. In fact, in the mining sector one of the core priorities is beneficiation and processing, and discouraging people from taking raw minerals out of Nigeria so that we put it to use here. Take bitumen, we import 80 percent of bitumen in this country. This country is the 3rd largest reserve of bitumen in the world. So it’s incongruous for us to have something and still be importing it into our country. So we need to get people who can set up processing plants here in order to produce asphalt that is in so much demand in fixing our roads.

So you are saying we need to get…?

We are doing that now, in fact that’s one of the priorities issue that we have in our roadmap. And before the end of this year, we are rolling out a major programme on bitumen development in the country.

In 2016, you said that informal mining is conducted at level as high as 80 percent of activity. Some will say higher, and you needed to bring these illegal miners you mentioned into a legalised framework that will make real start-up miners and ensure that they pay taxes and royalties. Where are you now with that?

We are making significant progress with that. We are working with Miners Association of Nigeria. They represent the small scale minerals, artisanal mining and the states. We want to ensure that we build partnership because there have been some tensions between the federal governmnent and states over mining. And one of the ways we are going bring them in is to ensure that they retain the registration of miners within their jurisdiction and then we support the process with some finance and some equipment that the miners can use. Also on our part, we will provide them some tenement areas that they can legally mine from and then get small scale licenses for their operations. That is ongoing now.

The problem of course has been week enforcement against the illegal miners. How have you tightened the enforcement?

In enforcement, we approach this through carrot-and-stick. carrot is what I have just told you and in enforcement, we have what we called the Mines Surveillance Task Force which comprise of all our security agencies, Ministry of Interior, Civil Defence, the Police as we revived that is the Mines Police that used to be very active in the 60s, the military as well as the various components of the security agencies. What we have also decided to do is to limit some areas as special mining zones that government can take charge of and look for serious mining mega players to operate on. That way we can have a broader outlook on this and all the security agencies I am talking about have set up units in the states level that are specifically designated as Mines Unit and they are working together collaborating with our own mines officers . I am on tour of the mining jurisdictions across the country now and this is beginning to create a much more serious impression. The important thing is the enforcement as you said, if you do not enforce… our mining laws is one of the most progressive in the world but enforcement is still a problem.

Now the illegal miners have said publicly that if the government ends corruption they will start paying taxes. Are they correct to the extent that all of this is tied to good governance and by dramatic reduction in corruption that is the only way to make it efficient?

Clearly there is a challenge, I can’t here and tell you that we are realizing all that we ought to realise from mining even as low based as our mining sector has become in the country. There is a lot of underreporting that is still taking place; underreporting royalties, underreporting fees, underreporting of taxes and we do have a duty in wearing another hat, I am the chair of NEITI. And I know from my involvement at the level of NEITI that a lot of what we should be realizing from the sector we are not. So one of the things we have done as a government is to decide that we are going to do a back review of all taxes, fees and royalties in the sector and the National Economic Council (NEC) chaired by the Vice President has endorsed this, all the governors has endorsed this and the President has said, go ahead with this so that we can get appropriate sense of what is actually should be coming into mining.

That is a very good point. Now the other thing is that the small scale miners as well as the illegal miners have said that they don’t want you to bring in foreign investors. They actually got their own union and they said that you should leave mining to just Nigerians. Is that a challenge or something like an additional pain for you?

I really don’t think it’s within the law. If we are going to grow this country, Nigeria operates within a global environment. We cannot pretend as if we are in isolation and go into some form of hybrid economic nationalism that will not produce the results. So if we need to sell our products to the outside world, we will necessarily open our market to the outside world. What is important is to attach them particularly because of their technical expertise in mining, to our own local operators and grow the skills of the local operators in a manner that they can take over the industry in the shortest possible time. Outside of that I don’t think it’s a realistic objective for any miner to say “leave it to us”. It’s clearly not possible and if you look at our Economic Recovery and Growth Plan, we made it very clearly that we are going to leverage the market and we won’t define that market as a local market.

So you want to bring in the big players…? Yes. Obviously.

…the likes of Glencoe, Anglo-America, Rio de Tinto, etc.?

Absolutely. I was in a mining gala in Cape Town, talking to these guys recently.

So what bait are you offering them? Are they nibbling, biting or ignoring that bait?

The bait we are offering them is that they will get as good a regime in Nigeria if not better than what is obtained in mining organisations where they have been operating like Ghana, South Africa, Mali, etc. And that is...one, you will have a tax-free holiday from the time you set up and the next three years after setting up in Nigeria. You can own you company 100 percent if you want to. You can have a lease of up to 30 years, if that inclined and we will let you bring in your mining equipment to Nigeria duty free. These are things that can compete with Australia and other countries.

But one of the big complains have been the ease of doing business in Nigeria. Will these foreign investors find it easy to operate in today’s Nigeria with all the difficulties in the communities like the players in the oil sector had to face. Not to mention red tape bureaucracy, lack of infrastructure, lack of power and all of that?

You see, if we allow ourselves to be dissuaded by all of these we can as well just sit back. But these are what we are already tackling that; at least those operating in my sector. Let me give you an example, if you are coming to work in my sector and you want to come to Nigeria to have visa on arrival, you have no problem.

When you are talking to these businesses, are these the concerns they have?

These are the concerns they have and I assured them that Nigeria has since moved on. These are challenges that we have but we are tackling them and that we are going to provide the infrastructure. Power is a major infrastructure for mining and many of them are setting up their own independent power projects in Nigeria. Yes it adds to the cost but ultimately we let it off by the gains that they make.

Mining have a very debilitating effect on the environment. If you go to Jos, you can still see the scars from the days of mining on the land, much of that area still hasn’t recovered but left the people with an impoverished lifestyle. How much is an environmental protection being emphasised as you attract foreign investment because there are simply no way anybody can benefit from this country’s mineral potentials without disturbing the ground?

Absolutely! You just hit the question on a very good note. One, we have a Mining Compliant Directorate within the ministry. It’s a major provision and in the Mining and Mineral Resources Act. So we do not take it lightly and we work collaboratively with the Ministry of Environment and the Ministry of Health. In fact, you cannot have a title in Nigeria without providing the environmental impact plan.

And what about compensation to these people where the mining actually takes place because these communities are usually left with one of the most difficult environmental legacies?

For the very first time, we learnt from the experience in the Niger Delta and we have placed host communities front and centre in the Mining and Minerals Act in Nigeria. So we ensure that you have to take them into consideration in what you are doing. We also have different programme at the level of government on reclamation of abandoned mines. In fact, that’s another thing we will be spending some of the money that I spoke about earlier on particularly in the Jos area, in the Abakiliki area where we also have a lot of abandoned lead-zinc mines and in the sheath belt. The whole belts of Nigeria where a lot of illegal activities are happening and we are working with groups….to also train the artisanal miners on some safe mining practices.

So the Minister, your final word. What is the future of solid minerals in Nigeria?

The future is significant progress. It may not be perfection but it is also not about an immediate quick-win. Mining does not lend itself to quick-win but we are plugging the leakages, we are working with the miners, we are working with the industrial union in the sector and we are determined to ensure that it becomes a significant aspect of the Nigerian economy.