I am very delighted to be here to deliver this address at the Nigeria-Canada Investment Forum on the theme, Fostering Strong Business Partnership into the Future.
- I must thank the organisers of this forum for their foresight, commitment, and hardwork which has made this event possible.
- When I led the Nigerian delegation to the PDAC Mining Convention, Toronto, Canada in March, I was pleased to meet with our High Commissioner, Ambassador Adeyinka Olatokunbo Asekun and his team, and the remarkable group of Nigerian diaspora there. In parting, we all resolved to ensure that we follow up on the gains of that conference, and the interest it generated for the Nigerian mining sector. I believe this event will further promote that agenda and I commend everyone involved in making it possible.
- The history of Nigerian Mining Reform cannot be complete without mention of the positive roles that Canada, and Canadians played in helping to midwife it, and give it direction and protection. Over the years, Canada seemed to have neglected to follow through and help us develop it further.
- Today, we are happy to see the renewed interest of Canadian firms and government in our mining sector and it is only appropriate that we come together to chart a new course for this growing sector.
The Legacy Problems
- When my colleague and I assumed duty as Ministers of Mines and Steel Development on November 11, 2015, we were immediately confronted by a number of problems largely caused by the neglect of the sector over the years.
- The challenges we inherited included the following:
- 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; and protracted litigation on legacy assets.
- The administration of President Muhammadu Buhari was however determined to diversify the economy and ensure that this sector contributes optimally to the building of a strong and virile economy for the benefit of all Nigerians.
- Our mandate was therefore three-fold: to increase the revenue generated from the sector and it’s contribution to national GDP; to create more jobs for our teeming youth by broadening the range of opportunities available for them; and to promote sustainable mining operations.
- Under the visionary leadership of the president in the last three and half years, we have been able to accomplish all these to a large extent, and we have now repositioned the Metals and Mineral sector as a frontier of economic diversification.
- Through a robust process of consultations with stakeholders, we were able to produce a Roadmap for the sector that was approved by the Federal Executive Council on August 31, 2016. This document spells out how the ministry, together with relevant stakeholders, can together guide the growth and development of the sector over the next two decades.
- Funding of the sector has also improved tremendously as we were able to access a N30 billion naira intervention fund from the federal government to help provide cheap loans and grants to industry participants and for direct investment in foundation infrastructure.
- The Ministry’s budget has also grown ten-fold from the paltry one billion naira annual budget that was the norm previously.
- We also secured support from the World Bank in the sum of $150 million for the funding of the Mineral Sector Support for Economic Diversification, MinDiver, programme. The fund is helping us to revamp previously abandoned proven mining projects like tin ore, iron ore, coal, gold and lead zinc. It is also providing technical assistance for the restructuring of the Solid Minerals Development Fund to make finance available for artesanal miners.
- In addressing the lack of Geological data, we were able to facilitate payment and release of the results of the aeromagnetic survey of the whole country which was done ten years earlier but was not released due to non-payment.
- Our Nigerian Geological Survey Agency, NGSA, undertook additional ground investigations nationwide to upgrade our National Minerals Data Base to a level that can more easily attract financial investments. In addition, we have strengthened the capacity of our laboratory facilities in Kaduna towards achieving ISO accreditation in order to reduce the huge revenue loss occasioned by thousands of mineral samples being sent abroad for analysis.
- In addressing the weak institutional capacity we met, we embarked on the upgrading and automation of the Nigeria Mining Cadastre Office for online applications; the construction of a modern archiving system to facilitate the dissemination of high quality pre-competitive geodata information; and the decentralisation of our Cadastre office for ease of operations.
- We have also increased our Mines Surveillance efforts with the deployment of newly trained and empowered officers across the federation and provided 38 new vehicles to ensure better policing of mines field. We improved our collaboration with security agencies, especially the Nigeria Customs Service, to address illegal exportation and smuggling of minerals; and the NSCDC to checkmate illegal mining activities.
- Distinguished ladies and gentlemen, although mining is on the exclusive list, we have tried to bend over backwards to ensure that state governments are carried along. We now engage them more closely in our activities and encourage them to set up Special Purpose Vehicles to participate in mining in their jurisdictions, without undermining private sector players. The 13 percent derivation for mineral revenue to states are now being implemented, similar to the one that oil producing states currently enjoy.
- In general, therefore, perception is changing and we have seen improved ranking of our mining jurisdiction.
Opportunities in the Sector
- As a result of these positive developments, the vast opportunities that exist in both the down and upstream sectors of our mineral development are now clearer and ready for exploitation.
- As many analysts have noted, Nigeria is still essentially a GreenField with a variety of mineral types and some of the highest grades of minerals anywhere in the world.
- An Australian company, Symbol Mining/Goidal Resources which is currently developing an open pit mine for exploiting lead-zinc deposits in Bauchi and Nasarawa States has confirmed that the grade of zinc they discovered is 300 percent above the global average.
- Similarly, Kogi Iron recently announced that they were able to get high grade steel from their iron ore site, thus proving that apart from Itapke which was meant to feed the Ajaokuta steel Complex, Nigeria has many iron ore sites that can produce world standard steel products.
- In essence, opportunities abound in the area of high profile minerals of interests like gold resources, lead zinc, lithium and other rare earth metals with high prospectivity.
- There are also opportunities in the establishment of IOS certified laboratories and in setting up metal extraction and refining plants.
- There can be no mining without infrastructure and the Nigerian government has initiated a partnering scheme with the private sector for the provision of infrastructure through the National Integrated Infrastructure Masterplan. Canadian investors can therefore go into PPP arrangement with government to provide needed infrastructure.
- As you can see, the opportunities for investment are many and the return on investment is quite high. As a result, there has been a lot of renewed interest in formal mining in Nigeria and the number of mineral titles held by serious investors is on the rise. In other words, Nigeria is gradually becoming an investor’s haven.
- As I noted earlier, our mining relationship with Canada dates back to the reform era that started around 2013, when Canada and its firms provided training and critical expertise to the sector.
- Some of the mineral laws that we still use today dates back to those reform years. However, soon thereafter, the relationship between the Nigeria Mining Sector and Canadian firms took a turn for the worse.
- However, we have noticed a gradual return of Canadian Mining Companies to our Mining jurisdiction. One of the more famous ones is Thor Explorations Limited which is registered in Canada and listed on the Toronto Stock Exchange is continuing with its mine development and exploration works over Segilola Gold Project in Ilesha, Osun State. There is also James Bay Resources Ltd whose interest is Bitumen but which has also indicated interest in Lead Zinc.
- During the last PDAC conference in Toronto, the Nigerian delegation had a fruitful meeting with Canadian officials, and we promised to work together to settle some outstanding issues, including the signing of the Foreign Investment Promotion and Protection Agreement, FIPA. I am informed that the Ministry of Trade is working assiduously to get the document ready for signing soon.
No Better Time for Canadian Firms to Invest In Nigeria
- Distinguished ladies and gentlemen, the Nigerian Mining sector is now, more than ever before, an investors’ dream. We have high grade deposits of many mineral types; we have a conducive investment climate comprising 100% ownership of your mining project as guaranteed by the Nigerian Minerals and Mining Act, 2007; we have waivers for customs and import duties for plant, machinery and equipment imported for mining operations; we have tax holidays of three to five years; we have free transferability of funds and permission to retain and use earned foreign exchange; we have Capital allowances of up to 95% of qualifying capital expenditure; and finally there is the deductibility of Environmental Costs.
- In three and half years, this administration has managed to derisk the mining sector through better funding, better management of artesanal miners, better policing of the mining environment to ensure safety and environmental compliance, better explorations for quality data collection and better collaboration with stakeholders in the mining sector.
- Finally, distinguished ladies and gentlemen, permit me to use this forum to assure our Canadian partners that it is now so much easier to do mining business in Nigeria, and we are more than prepared to welcome them with open arms.
34. Thank you all for listening.