Nigerians, Investors, Banks Must Show Interest in Mining Sector – Hon Bwari

Hon Abubakar Bawa Bwari is the Minister of State for Mines and Steel Development. In this interview bares his mind on the reforms in the mines and steel sector urging Nigerians, the business community and banks to show more interest and seek understanding of the sector in order to take advantage of the potentials available for the growth and development of the Nigerian economy. Excerpts  

It was recently reported that some parts of Abuja experienced Earth Tremor, could you shed more light on that?

I don’t think it has to do with the excavations going on in the areas until investigations are completed. If you recall, two years ago there was an incident like that in Kwoi, in the Southern part of Kaduna State and it became a challenge to geoscientists. We had to direct the stoppage of blasting activities around the tremor affected areas because we wanted the experts to do some investigation. When it happened we sent our men there to check and for us to really ascertain what really happened there was a need to stop all excavations, blastings and other mining related activities in order to enable our men do their job. What they did was to take coordinates and samples. There are things that are natural occurrences and there is nothing you can do while there are things that are man induced. I want to say that Nigeria is not located on a geographical zone that is prone to earthquakes. It is unusual in Nigeria. These happenings could also be as a result of climate in terms of climatic change. A lot of things are now happening around areas where things should not have happened. So, because of these unsuspecting occurrences the government proactively approved the purchase of equipment used in detecting such occurrences. We were able to acquire six seismometers and were about installing them when the incident happened in Mpape, in the FCT.

Does Nigeria Employ Safety Measures in Mining?

We have given attention to safety in all mining related issues but what happened in Mpape has no direct bearing with mining activities. That was why I gave the example with Kwoi which is not a mining area but experienced earth tremor two years ago. We had to stop all blasting activities to enable us take samples and do proper investigation on what really happened. We cannot also run away from the fact that human induced activities can also cause what happened. We have not come into conclusion yet but still investigating and very soon the result will be out and only then that we would be able to attribute a cause. The fact remains that Nigeria is not located in a geological region where you have earthquakes or earth tremors because the earth is like a broken plate that when put together has edges that are prone to earthquakes but Nigeria and indeed the West African region is lucky not to be in that region. However, there are areas we found out have weaknesses around our geological regions and Mpape happens to be in that kind of axis. It is sitting on a granitic rock detected through our area magnetic survey conducted round the entire country. It may be that what happened in Mpape might not be associated with anything around Mpape but maybe because of activities from somewhere but since that area is weak the impact affected Mpape and some parts of the Federal Capital City. We have to understand that these occurrences are natural and we don’t have control over them. However, what have control over is to ensure that mining is done in line with international best standards as practiced in other mining nations. There are areas that have gone far in mining activities without earth tremor but if you are mining in an area of these weaknesses it is possible to experience tremors and other geological effects, especially if it is underground mining. But we have not gotten to that stage of mining yet in Nigeria. Our mining is still majorly artisanal with most of them being open cast and alluvial. Apart from blasting that can be seen as a threat at the moment l don’t think Nigeria has gotten to that stage in mining where it is dangerous to our society.

Going forward, what are the Safety Precautions to Safeguard Such Occurrence?

The first thing which is good news is that Nigerians should not be panic about the occurrences. When it happened we took a survey and there were no cracks on any of the buildings, roads etc which is a cheering news. We have also acquired equipment in monitoring and detection of such occurrences. The equipment which is called seismometer when installed in six points in Nigeria will be used in monitoring earth tremors, earthquakes etc. We had to proactively do that after the Kwoi incident in order to avoid claiming that since Nigeria is not located in earthquake prone zone we will not do something. There was a need for us to be proactive, so we acquired them and allayed the fears of Nigerians and if we are able to detect such occurrences before they happen that will enhance our safety measures.

How has your Ministry fared on the Diversification of the Economy through Solid Minerals?              

When we were given the mandate, the most important thing for us was to ensure that mining sector contributes more to Gross Domestic Product (GDP), and create jobs for our teeming unemployed youths. When we came on board we were presented with so many challenges which needed urgent attention, thus the need for engaging academicians and mining stakeholders to brainstorm on how to get things right for the good of the sector and the nation at large. Based on the outcome of the consultations with relevant stakeholders, we developed the roadmap for the growth and development of the Nigeria mining industry. The roadmap is designed with key interventions on different areas of the sector and timelines for the execution of such interventions. With the roadmap, the ministry saw a major financial boost from the federal government and other donors, the sector’s budget increased and that enabled us to address major challenges which have hitherto been a quagmire to the growth of the sector. Interestingly, the Nigerian Gross Domestic Product Report from the National Bureau of Statistics of the second quarter in 2018 on quarrying and other minerals under mining and quarrying sector grew by 3.31% in the second quarter of this year from 27.45% in the first quarter and 10.94% in the fourth quarter. The same report indicated that the Metal Ores under mining and quarrying sector grew by 7.16% in the second quarter of 2018 from 45.94% in the first quarter and 31.86% in the fourth quarter of 2017.

As enablers and regulators of the sector, ours was to ensure we put an enabling environment for private sector driven mining activity and we have a very good and robust law that have been tested and reputed to be business friendly. That law (The Mining Act) is a law that will attract investors who are serious about investing in Nigeria. As part of federal government’s incentive for encouraging investors, investors are guaranteed 100% ownership of their businesses, with a 3-5 years tax holidays, a duty free importation of mining equipments and we ensured that licenses are given on a first come, first served basis.

Tell us Your Ministry’s Effort in Assisting Small Scale and Artisanal Miners

There is no pretense in the fact that our level of mining is artisanal mining. Indeed 80% of our activities are done either by artisanal miners or small scale miners. We have not gotten the big time miners yet and we have to make do with what we have. So, to assist them in growing their businesses we ensured that we register them into cooperatives and assist them with funds. Right now, we have N5bn (five billion naira) in the Bank of Industry and we have been giving them loans for equipment and start up funds for their businesses. Those who operate at artisanal level can get between N100, 000.00 (One hundred thousand naira) to N10m (Ten million naira). For Small Scale Miners, they can get from N10m (Ten million naira) to N100m (One hundred million naira). We believe that by that this is just a drop in the ocean but it will go a long way in advancing their ventures and with that we believe there will be more production.         

       What is the Mining Status of Nigeria?

These are issues we have been having with states. Mining is on the exclusive list but when you go to mine you go to the land first and the land is under the state governors and they sign the Certificate of Occupancy. So, you cannot go to the ground without going through the land and that raised a lot of issues between us and the governors. When we came in we tried to engage the governors, we made presentations at the National Economic Council, where we were able to get a buy in of the governors. We agreed that as a mining activity remains in any state, the state is entitled to 13% derivation fund that oil producing states are getting. We are also advancing towards having an independent regulator for the mining industry but at the level we are now we first want Nigerians to buy into mining. An independent mining agency will be necessary with time if we want to operate the way the telecom industry does but we need to reach a level that Nigerians will appreciate what mining is all about because very few of us are engaged in mining. You cannot mention any of the big business players in Nigeria that are really in the sense of it into mining. There are very few of them. Those who are into serious mining in Nigeria are mostly foreigners. Nigerians do not seem to know much about mining. This is discouraging because our banks know little about mining and so don’t fund mining. We need to get the banks to understand this since in most cases when you are talking about mining with them they don’t understand. We need to get the business community on board as well to understand what mining is all about and the potentials that are there. We have 44 different minerals in Nigeria and we had focused our attention on seven; and as we were focusing on the seven we discovered a lot more. When we came in our attention was on gold, barite, iron ore, limestone, tin, coal and another.

What Are You Doing To Curb Illegal Mining?               

Yes illegal miners were having a field day before now, but we are tackling them. We are still encountering challenges and logistics problems and need improved capacity to monitor activities of illegal miners. For instance, right now we have just one Federal Mining Officer per state. Imagine a state like Niger with just a mining officer, how can he cover the whole of Niger State? We have a Task Force in place with vehicles bought for them for patrol but I want to state that considering the activities of illegal miners that is still not enough because there is need for increased capacity to monitor illegal miners and their activities. If we can get enough, there will be more revenue coming in because I remember that when we started, revenue coming in was small in terms of royalties but when we inaugurated the mining police and the surveillance Task Force and increased funding to our Federal Mines Officers, our revenue tripled within a short time. So, if we are given more support in terms of capacity and logistics, a lot more revenue will be generated in terms of mining.

Is Nigeria’s Gold Policy Yielding Any Fruit?             

We are on it. We just finished the gold policy. We realized that Nigeria’s gold is one of the best. So, since most of our artisanal miners are into gold production there was a need to organize them with a pilot project, we planned to kick start the gold purchase scheme with Kebbi, Niger and Osun states which are areas rich in gold. What we intend doing is to fund these cooperatives who are artisanal miners. Considering where we are coming from we should be given credit for all the reforms we have started. If Nigerians realize where we are coming from and where we are today they would appreciate where we are and what we have been able to do. Today, artisanal miners are part and parcel of the reforms in the mining sector, and if we are able to do what we want to do with gold; fund the artisanal miners and purchase the gold for them the sector will grow. Remember that already, we are seeing what we have never seen before that is having refineries being set up to refine gold with the Central Bank ready to keep gold as its reserve instead of keeping dollars. So, it will be better for them to reserve gold which will be Nigerian gold produced by Nigerians with the Central Bank as the off takers. We are on that. Look at what we have been able to do with limestone. It is Nigerian limestone that is used in the production of cement in the country and we are now self sufficient in cement. We want to do the same thing in Agriculture using phosphate for fertilizer, do the same thing in steel using our iron ore to produce steel, do the same thing in lithium and tin. If you look at what is happening today, you will notice that the world is moving towards electric cars and most of these car manufacturing industries are interested in areas where lithium, tin and lead-zinc are manufactured. We have the best in the world. Recently I was in Australia and the presentation by one of the companies that will soon start modern mining in Bauchi stated that the world average production of lead-zinc is 6% but what has been discovered in Bauchi is 22%.

 

What is the State of Nigeria’s Coal to Power Project?                    

The coal to power project is our priority. So, any investor in coal must show us what he wants to do and if the investor is going to do coal to power that is our priority. We are working with the ministry of power and the Bureau for Public Enterprise (BPE) because most of the coal blocks are with the BPE. We can’t say we are the owners of the coal blocks that were worked on by the Coal Corporation of Nigeria. So, we don’t have issues with China as regards the coal project. Indeed we have a Memorandum of Understanding with China as regards exploration and capacity building. Our staffs are there at the moment for training and the Chinese delegation will arrive Nigeria as from the 16th of this month for a 10-day working visit.

Tells us Breakthroughs from the Africa Downunder Conference in Australia

The testimonies of most of the mining companies and investors in Australia stated clearly that we are moving in the right direction. At the round table in Australia, most of the mining companies in Australia were excited with our progress and happy doing business in Nigeria. One of the major breakthroughs is that a mining company called Symbol Mining Company will be starting modern mining activities in Bauchi; and that will be the first of its kind in Nigeria. They said in few weeks after starting business in Nigeria they will be exporting. I have said that the world average grade of zinc in the world is 6% per 100 tons but the one they are mining in Bauchi is 22%. There again, the Comet Company that discovered nickel in Kaduna testified that they are happy with the mining environment in Nigeria and what the government have put in place in terms of facilities and law.

 

Is the Ajaokuta Steel Company Going to be Revived?

Our intention regarding the Ajaokuta Steel Company is to break the jinx that has kept it unproductive for years. We are already doing that. At the level we are now we are almost there. We have been able to get clearance from the Bureau for Public Procurement (BPP), to engage transaction advisers and the legal issues surrounding Ajaokuta have been sorted out and we have received more than eleven interests from investors. This time what we want to do is to ensure that whoever is going to be the one to operate now either in the area of partnership or concession has to be a company that has the technical knowhow, financial capacity and the love for our country.

We have looked at all the options and they are all on the table. It is either the government completes the project and runs it itself, concessions or unbundles it. But I believe to concession to the right company is the best. The government will not need to put in money there; instead of putting in money there it will be used rather in providing other infrastructures; particularly the external infrastructure that Ajaokuta needs today. You cannot operate Ajaokuta without railway and inland ports. The government is now putting on the Baro Port which will be commissioned soon, Lokoja Port, Warri Port, and the dredging of the River Niger that has been completed. There will be need for a deep sea port in Onne. The truth is that Ajaokuta is not just a simple project but a lot of positive things are already going on in Ajaokuta. A power plant of 110 megawatts is already in place to power the complex. We are working with the Ministry of Transport as regard railways, ports and the dredging of the River Niger. We are also working with the Ministry of Power and we have 110 megawatts there even though what we need is 40 megawatts. Already, today we have about seven steel plants in Nigeria owned by African industries that are producing one million tones of steel materials to the extent that the scrap materials they are using in Nigeria are finished. So, the backward integration we have been preaching is about to take place. Very soon they will start mining iron ore in Kajuru, Kaduna State with a plant there that will process iron ore to be used in these seven plants. The importation of steel has reduced because of the attention given by the government in the sector. Delta Steel is there and things are happening around there as well and the aluminum smelter plant in Ikot Abasi will soon be in operation since we have been able to resolve the legal issues around it. So, to a large extent, we are on the right track.