Mining is long-term investment, PwC chief tells investors

PriceWaterhouseCoopers (PwC) has advised investors in the mining sector not to expect returns on investments quickly as the life cycle in any mining is always long.

Its Director, Mr. Cyril Azobu, said looking at the entire value chain of the industry, the development period is long, adding that exploration, which is the most risky part of the value chain, takes quite a long time.

Listing the challenges that face investors in the sector, he said it takes over five years to do exploration, after which the investor would begin to develop the area by building plants that will carry out the operations and do some level of processing.

Azobu told The Nation in Lagos that even after processing, the investor needs to have export channels, adding that what is produced would still be subject to global commodity pricing.

He also said there were also shocks that could affect pricing globally, so returns on investment will not be expected soon on investments in mining sector.

He urged the government to speed up the implementation of last year’s mining roadmap as it clearly articulates the government’s aspirations and expectations from the sector.

According to him, the roadmap  determines particular strategy needed to be deployed to achieving the mining sector objectives as it looks at across a chain, from institution building to stakeholder management, funding, and management of players in the sector and the whole range of things that are needed.

“The roadmap articulated how we intended to grow the sector, which is actually different from the one in 2012, which was very ambitious. We wanted to grow the sector by 10 per cent by 2020 and we are still hovering around five per cent. Perhaps, we are putting the cart before the horse. You can’t just have such growth objective without having a clear strategy on how you intend to get it done.

“It is one thing to have a roadmap and another to implement that roadmap, that’s the reason I’m saying that there could be bit more work to be done, and there could be more action to be taken to make the implementation faster. To get this done, it is not just government’s action, the private sector must be carried along. In fact, it should be private sector driven,” he said.

Azobu said there is a mining implementation and strategy brief in the roadmap. He also said a team has been constituted and its responsibility is to have a  clear implementation plan on who takes what responsibility.


by administrator News