Valedictory Ministerial Accounts of Stewardship

Protocols

 

  1. Distinguished ladies and gentlemen, it is with mixed feelings that I address you today on this occasion of the valedictory ministerial briefing marking the conclusion of my tour of duty as Minister of Mines and Steel Development. On one hand, I have a deep sense of pride about my contributions to the landmark achievements we have been able to achieve in the sector and I am thus transitioning out with my head held high. On the other hand, I am overwhelmed by emotions as I bid goodbye to a sector that I, together with other patriots, have invested a great deal of passionate and patriotic efforts over the past 2 years.

 

  1. My exit from the ministry today follows the acceptance of my resignation by His Excellency President Muhammadu Buhari, GCFR, effective today, May 30, 2018, to allow me pursue other political interests.

 

  1. As you may recall, I assumed duty as Minister of Mines and Steel Development on November 11, 2015, following my appointment by the President, Commander in Chief, Muhammadu Buhari,

 

 

  1. The period of my stewardship in the Ministry has been strategic as it coincided with this administration’s determination to reposition the Minerals and Metals Sector to serve as a frontier of economic diversification, the creation of jobs and the broadening of the range of economic opportunities available to Nigerias. The overall goal has been to ensure the sector contributes optimally to the building of a strong and virile economy that supports our human development goals.

 

The Broad Mandates of the Ministry have been as Follows:

  1. In greater detail, the broad mandates of our ministry has been to:
    • Increase the revenue generated from the sector and its contribution to national GDP, thus contributing to this administration’s objective of diversifying our country’s revenue base from the historical dependence on crude oil
    • Develop the sector and improve its capacity to create jobs and broaden the range of economic opportunities available to Nigerians.
  2. The ministry’s interventions in the sector pursuant of our mandates have also been guided by other strategic goals of this administration namely:
    • Promote and ensure Environmental Justice and Sustainability in mining operations.
    • Work with security institutions to ensure Safety and Security in the country, by the strict monitoring of the movement and usage of explosives.
    • Contribute to this administration’s fight against corruption by identifying and bringing economic saboteurs in the mining sector to book.
    • Promote Peace and Unity in the country by working to ensure all stakeholders in the sector, especially host communities and state governments are able to beneficially participate in the sector.

The Legacy Challenges

  1. May I take this opportunity to remind you all of the legacy challenges in the sector that this administration inherited:
    • Insufficient Funding
    • Lack of Geological Data
    • Weak Institutional Capacity of the supervising ministry
    • Limited Supporting Infrastructure
    • Limited Cooperative Federalism in Sector Governance

 

  • Low Productivity
  • Illegal Mining and Community Challenges
  • Weak Ease of Doing Business and Perception Issues
  • Protracted Litigations on Legacy Assets

Successes

  • I must at this point state that the successes we have achieved so far are numerous, and time would not allow us to touch on all of them in detail. They are however available in greater details in our handover notes which includes Departmental and Agencies reports.
  • Highlights of our achievements under the visionary leadership of Mr. President are as follows:
    • Roadmap for the Growth and Development of the Nigerian Mining Sector:
  • The document was produced through a robust process of consultations and stakeholders’ engagements and was approved by the Federal Executive Council on August 31, 2016. This document prescribes collaborative actions of all stakeholders to guide the growth and development of the sector over the next two decades.
    • Improved Funding for the Sector:
  • The ministry sought for and obtained approveal for N30bn (approx. $100m) intervention fund from the Federal Government, partly to help provide cheap loans and grants to industry participants as well as for directly investing in foundation infrastructure. For the first time since 2004, we got FEC approval in October 2016 for this amount by securing access to the revolving mining sector component of the Natural Resources Development Fund.
  • We also secured support from the World Bank for the funding of the Mineral Sector Support for Economic Diversification (MSSED or MinDiver) program, a critical component of which is to provide technical assistance for the restructuring and operationalization of the Solid Minerals Development Fund, which would make finance available to ASM operators through micro-finance and leasing institutions. The fund will also help to bring back on stream previously abandoned proven mining projects like tin ore, iron ore, coal, gold and lead-zinc.

 

  • Similarly, we have reached an advanced stage in assembling a $600M investment fund for the sector, working with the Nigerian Sovereign Investment Authority, the Nigerian Stock Exchange and other financial institutions.
    • Addressing the Lack of Geological Data
  • We have facilitated payment and the release of the results of the aeromagnetic survey of the whole country carried out since 2006, but which had not been released due to non-payment.
  • Our Nigerian Geological Survey Agency (NGSA) has undertaken additional ground investigations nation-wide to upgrade our National Minerals Database and to further ascertain the assays of our mineral assets to the level that can easily attract financial investments and assure operators of the scope of operations required for further exploration and/or mining.
  • The Nigerian Geological Survey Agency (NGSA) has also signed and operationalised MoUs and Technical Cooperation Agreements with the China Geological Surveys, Shandong Mineral Exploration Agency and the National Office Hydrocarbons and Mines ‘ONHYM’ of Morocco. The collaborations are intended to leverage on the expertise and state-of-the-art technologies of these organizations in assisting Nigeria generate investor friendly geoscience data.
  • The Ministry has initiated engagements with SGS, a world-renowned material testing company, to strengthen the capacity NGSA Laboratory Facilities in Kaduna towards achieving ISO 17025 accreditation within the shortest possible period. The objective is to significantly reduce the thousands of mineral samples being shipped abroad for analysis thereby reducing the huge revenue loss and correspondingly incentivize the mining sector.
  • As part of the support we received from the Natural Resources Fund, the Ministry has finalized exploration initiatives totaling N15 billion allowing successful entities help with the exploration of priority minerals like Gold, Lead, Zinc, Rare earth metals to mention a few.
    • Addressing Weak Institutional Capacity
  • We have initiated the establishment of the National Minerals Commission (NMC), which would harmonise the functions of the Cadastre Office and a number of key departments in the ministry, under a unified administrative structure for greater efficiency and effectiveness in sector governance. This has been approved by the FEC and passed 2nd reading at the National Assembly.

 

  • We have overhauled the administration of mineral titles. For the first time in very many years, we implemented a provision in the Nigerian Minerals and Mining Act, 2007, which allows for the revocation of non-performing or defaulting mineral titles. This exercise led to the revocation of a number of titles, and the generation of revenue to the federation account from titleholders who met the deadline to regularize their payment statuses. The exercise which made non-performing mineral titles available for acquisition by serious operators/investors, also sent a strong signal to the mining community of our improved capacity to properly regulate the industry and penalize those that deprive the country of due revenue.
  • We have strengthened the capacity of the MCO to ensure a seamless process for obtaining exploration licenses, permits, and approvals for willing and credible investors. We have also set in motion parameters to decentralize the operations of our cadaster office by establishing six (6) regional outposts for the MCO to further fast track the procurement of licenses and titles.
  • We have reviewed the explosives act and stemmed cases of explosives’ proliferation, pilfering and diversion, in partnership with the NSA’s office. We have also improved collaboration between the ministry and our security agencies, especially the Nigeria Customs Service, in addressing illegal exportation and smuggling of minerals; and the NSCDC in checkmating cases of illegal mining activities.
  • We have improved sustainability in our mining sector by producing the Mining Environmental Regulatory Compliance Handbook, as well as the guidelines for Environmental Protection and Rehabilitation Programme to ensure sustainable mining in Nigeria.
  • We have reinvigorated our Mines Surveillance efforts, with the deployment of newly trained and empowered officers across the federation. Today, we would also be commissioning 38 new vehicles which have been procured for our officers in the field for greater efficiency.
  • We have facilitated delivery of a centralized GIS Web portal; as well as ICT Infrastructure upgrade and automation of the monitoring of mining activities.
    • Addressing Limited Supporting Infrastructure
  • Infrastructure required for the proper functioning of the minerals and mining ecosystem such as railroads, competitive financing

 

systems, mine and asset security and related support services are being developed in concert with other government entities. For instance, as part of our efforts to de-risk the sector, we are in discussions with the Bank of Infrastructure, as part of a consortium, to attract private capital investments for critical mining infrastructure.

  • We have also commenced the development of mining resource corridors around contiguous States and along key infrastructure like railways, to help establish cluster industrial zones, which will become the fulcrum for increased economic opportunities and growth. We believe that when states are able to determine their comparative advantage within the mining resource corridors, they can also make meaningful infrastructural investments to support our modest efforts.
    • Addressing Limited Cooperative Federalism
  • In order to encourage beneficial participation of state governments in the mining sector, we have gotten approval for the implementation of the constitutionally guaranteed 13% derivation for mineral revenue to states, similar to the derivation that oil-producing states currently enjoy from the federation accounts.
  • Furthermore, we have also reviewed our approach to licensing with regard to state ownership. While in principle, we cannot give states licenses as separate legal entities, companies in which the states have an ownership interest can bid for and receive licenses. We are also working closely to build the capacity of state governments in structuring Special Purpose Vehicles to participate in Mining in their jurisdictions, without undermining private sector players and ultimately discourage mining activity within their states.
  • We believe that these administrative mechanisms will help to douse the tension of subsidiarity between the Federal Government and States, pending the enactment and institutionalization of a more enduring resolution of the FG-SG relationship in regards to natural resource governance.
    • Addressing Low Productivity
  • We have improved the productivity of the sector by tripling the ministry’s contribution to the federation account to about N2Bn in 2016, up from N700M in 2015.
  • The sector also recorded a 7% increase in GDP in 2016, in spite of the country being in a recession.

 

  • The Nigerian Bureau of Statistics also recently affirmed that revenue from exports in the mining sector grew by 592% between 2016 and 2017.
    • Addressing Illegal Mining and Community Challenges
  • We have delivered on the objective of building a collaborative sector security framework by working extensively with state governments and relevant ministries to formalize and manage our artisanal miners, while also working with defense and security agencies to curb the actions of illegal mining in the country.
  • Under the MinDiver program, we have commenced the modalities for capacity building in community-based organizations and other community representatives, helping them participate in key decisions in mining operations and processes.
  • We are also providing guidance on suitable benefit sharing mechanisms (e.g. foundations, trusts and funds) and their applicability in different mining operations at all levels of engagement on behalf of mining communities.
  • Furthermore, we have engaged our artisanal miners to organize them into effective cooperatives that has facilitated their access to improved financial and commodity markets through grants and the establishment of mineral buying centers.
    • Addressing the Weak Ease of Doing Business and Perception Issues
  • With a view to encouraging new investments in the sector, we have facilitated the robust implementation of the statutorily guaranteed 3-year tax holiday for new investors in the mining sector.
  • Other provisions of the Minerals and Mining Act 2007 are also beginning to see determined enforcement. In particular, our offer of 100% foreign ownership of mining projects to willing investors, and the elimination of import duties on mining equipment brought into the country.
  • We have worked in collaboration with the Federal Ministry of Finance to streamline monitoring of mineral exports at all ports of entry in the country.
  • We have built a new atmosphere of trust and conviviality with the investing community, thus improving their confidence in the governance of the sector.
  • Also, the Federal Government’s efforts to improve our ranking in the World Bank’s Ease-of-Doing-Business index, has greatly impacted on the mining sector, with improved rankings in sector specific assessments of our mining jurisdiction such as the Fraser’s Investment Attractiveness Index.
    • Addressing Protracted Litigations on Legacy Assets
  • We have made progress in resolving the legal issues around our legacy projects, particularly Ajaokuta. We have signed a Modified Concession Agreement (MCA) that has allowed for the commencement of the return of the entity to the Federal Government of Nigeria. We have in place a timeline of action which would see the legacy plant become operational in the near future. We are at this time concluding an audit process, further to which we would fully take over the plant. We are taking the most appropriate steps in our national interest to ensure Ajaokuta is finally put to work after several false starts in the past.
  • On ALSCON, we have also made significant progress in our efforts to bring the Company back to life with the approval of the National Council on Privatisation that the company be given to UC Rusal with clear conditionalities for resuscitation.
    • Secured FEC approvals to undertake critical projects and programmes

To enhance the operational efficiency and effectiveness of the Ministry and her agencies, our ministry has secured the approval of the Federal Executive Council to execute critical projects and programmes, including;

  • Procurement of 12 No. 4-wheel drive vehicles by MMSD to monitor mining activities in remote areas of the country to ensure compliance of the rules and regulations of the mining environment.
  • Procurement of 2No. drilling rigs for National Steel Raw Material Exploration Agency Kaduna to enhance its operational capacity and expansion of research activities on steel and other important minerals;
  • Establishment of the National Council on Mining and Mineral Resources Development to create a forum for periodically brainstorming with stakeholders in the mining sector value chain on policy matters with a view to improving on the cooperative governance of the sector;
  • Development of IT integrated Automation and interactive Web portal for the MMSD to create One Stop Shop online interface for investors and other players in the sector to obtain data on a broad range of subjects about our jurisdiction, and process a number of key applications from anywhere in the world;
  • Approval and procurement 2No Drilling Rigs for Nigerian Geological Survey Agency (NGSA) in 2017 Budget. The project is to enhance the Agency’s capability in its field work to determine mineral occurrence, quantity and quality for geological data;
  • Approved, anchor and monitor the promotion of a strong mining stakeholder engagement between States, Federal, Civil Societies, Operators, Industry players along the entire Mining Value Chain. Hitherto, the absence of this concept had greatly affected the Ministry’s aspiration in promoting the Mining Sector Governance which is an important part of the provisions of the African Mining Vision;
  • Encourage the engagement of stakeholders, especially the State Government for the establishment of a Special Purpose Vehicles (SPVs) to have a stake in mining activities;
  • Constitution and inauguration of the Board of the Solid Minerals Development Funds (SMDF);
  • Launched a N5 billion fund (made up of N2.5 billion by SMDF & a counterpart fund of N2.5 billion by Bank of Industry) to provide single digit interest loans to Artisanal and Small & Medium scale miners;
  • Secured, through the Federal Government, a $150million loan from the World Bank to commence the Mineral Diversification (MinDiver) Project aimed at funding strategic interventions in the Sector;
  • Re-activation and funding of the activities of the moribund Presidential Special Mines Surveillance Task Force Team to fight the increasing menace of illegal mining which is a source of major revenue leakage for the sector;
  • Inauguration of Mining Implementation and Strategy Team (MIST) to support the implementation of the Roadmap.
  • Successful inauguration of the Boards of Parastatals of Nigerian Geological Survey (NGSA), National Steel Raw Materials Exploration Agency (NSRMEA), National Metallurgical Development Agency (NMDA), and COMEG in March, 2018.
    • Other Projects/Programmes Completed
  • The Re-activation of the Mineral Resource and Environmental Management Committees (MIREMCO) in 20 states. Ten (10) States have so far been mobilised with take-off grants and operational vehicles;
  • Establishing and equipping the Mines Environmental Analytical Laboratory in the Ministry to enhance a reliable data collection from mines field for compliance monitoring and maintenance of data bank;
  • Procured 40 Field Vehicles for the Presidential Special Mines Surveillance Task Force to monitor illegal mining activities;
  • Operationalised several existing MoUs and a number of new ones between the Federal Government and other countries like the Republic of South Africa , the Peoples Republic of China, e.t.c. Provisions of such MoUs include partnerships on Capacity Building, Knowledge Exchange, Improvement of Geological Prospectivity, e.t.c.
  • Held Stakeholders engagements in collaboration with UNDP on the alignment of the African Mining Vision by establishing Gap Analysis Framework alongside Ministry’s Roadmap;
  • Inaugurated the Committee of Donor Agencies for the Solid Minerals sector;
  • Implemented the Executive Order 001 on Promotion of Transparency and Efficiency in the Business Environment;
  • Received Waiver from the Office of the Head of Civil Service of the Federation to fill positions as follows; Fifty-Three (53) positions for Critical Professional/Skill; and Eighty (80) positions for Drivers/Mechanics. The staffs recruited are waiting to be captured by IPPIS;
  • Received approval of the Acting President to recruit Forty (40) Geologists/Inspectors of Mines/Scientific Officers;
  • Establishment of the Investment Promotions & Minerals Trade Department as an upgrade of the now defunct Minerals and Metals Promotion Unit;

On-Going Projects

  1. A number of projects are yet ongoing. I am however delighted that the ministry is in the hands of very competent principal officers who would ensure the continuity of our programmes and policies in line with our Roadmap. Some of the ongoing projects at different phases of completion include:
    • Implementation of various projects/programmes under the Intervention Fund;
    • We have initiated the optimization of the Gold Value Chain with a view to Instituting a Federal Gold Reserve Scheme, in which the Central Bank of Nigeria shall be involved. This initiative would also include a National Gold Purchase Scheme that would involve cultivating partnerships with state governments towards improving their beneficial participation in the gold value chain especially as it touches on production, technics, trading, health and safety, and environmental protection.
    • Demobilization of M/S KOCH Nigeria Limited from NIOMCO, Itakpe Site. The demobilization has progressed extensively and nearing completion;
    • Harmonisation of the Report on Gemstone Certification and Export/Trade Guidelines with the Mineral Trade and Export Guidelines being developed by the MinDiver Project and Department of Investment Promotion and Mineral Trade;
    • The Ministry successfully participated in the National Economic Recovery Growth Plan (ERGP) Focus Labs initiative of this administration and has been tasked with driving key deliverables as one of the 4 pillars in the Manufacturing and Processing Workstream. Many projects in the processing sector (Metal & Solid Minerals) were evaluated, rated, and estimated to attract estimated private investments of $3.32 billion, estimated public investments of $154.50mil, and to create an estimated 238,000 jobs by 2020 to ensure full impact on the economy.
    • Installation of the Super-Concentrate Plant, Weathered Ore Treatment Plant. This project is however discontinued due to the complete demobilization of M/S KOCH occasioned by the execution of the Modified Concession Agreement (MCA) on NIOMCO
    • Procurement of Testing Equipment for the mini Metallurgical Testing Laboratory being established.
    • Various capital projects aimed at improving the efficiencies of the ministry.
    • We inaugurated a Six-member Steering Committee on Research Collaboration with the Universities. This programme is aimed at creating research innovation hubs nationwide and also to create effective Interface with research institutions to deepen knowledge and expertise to support sector growth and competitiveness. The sum of N100million has been appropriated for this activity;
    • Ongoing capacity development programmes for ministry staff including 11 Technical officers who are currently attending Professional Technical (Internship) Training in South African active mine sites, and On-going training of 83 (Eighty-Three) Middle Level Officers and Five (5) Directorate Level Officers.
    • Addressing the issue of office accommodation and equipment for a number of Zonal/States Mines offices as well as for some Agencies in the Ministry.

Pending Issues

  1. There are a number of pending policies and programmes which are at different stages of approvals and/or consultations before they can become effective. I am similarly convinced that the ministry would follow through to bring the these issues to successful conclusion:
    • Engagement of the Transaction Adviser for the concessioning of ASCL’s Completion, Operation and Transfer;
    • Passing of the Nigerian Metallurgical Industry Bill (NMIB), which was presented to the 8th Senate and passed through the first reading at the floor of the Senate;
    • Passage of the Bill establishing the National Minerals Commission (NMC), which has passed 2nd reading at the National Assembly.
    • Training of security personnel of the Presidential Special Mines Surveillance Task Force on minerals identification and mining governance;
    • Drafting of the Mining Tax Bill, domiciled in the Federal Ministry of Finance;
    • Legal Vetting of the Explosive Act of 1964 by the Federal Ministry of Justice;
    • Reclamation of one (1) abandoned mine site in Plateau State approved in the year 2017 Appropriation;
    • Nationwide mapping of Mining hazards flashpoints;
    • Development of guidelines for Mines Closure and Decommissioning Plans for the sector;
    • Establishment of Environmental Protection and Rehabilitation Fund (EPRF) in line with Section 121 of the Nigerian Minerals and Mining Act, 2007. A proposal for implementation has been included in the proposed World Bank Projects;
    • Stocking and Digitalization of Library resources/establishment of e-library and Mining in Nigeria Museum;
    • Re-concessioning of ASCL to financially capable and technically sound investor. Advertisement has been placed in the newspapers for consultancy services to engage Transaction Adviser.

Conclusion

  • The achievements recorded during my stewardship would not have been possible without the conducive and harmonious working relationship that existed within the high-level management of the Ministry as well as the cooperation and understanding that I enjoyed from all stakeholders and players in the sector.
  • I count on the continued support and participation of you all as the ministry continues to advance the careful implementation of the Roadmap for the Growth and Development of the Nigerian Mining Sector. It has indeed been a pleasure serving in this capacity.
  • My sincere thanks and appreciation goes to His Excellency Mr. President and His Excellency the Vice President for the visionary leadership and prioritization of the sector; as well as to my ministerial colleague, Hon. Abubakar Bawa Bwari – Minister of State. I similarly acknowledge the support of the previous Permanent Secretaries in the ministry, Mr. Istifanus Fuktur and Mr. Mohammed Abbas, as well as the current Permanent Secretary, Dr. Abdulkadir Mu’azu, the entire Staff of the Ministry as well as all players and stakeholders in the industry.
  • I thank you all for making the journey On the Road to Shared Mining Prosperity
  • Thank you and God bless.

 

 

Dr. Kayode Fayemi, CON

Minister

Abuja, Nigeria | Wednesday, May 30, 2018