Speech by Minister of Mines and Steel Development, Hon Abubakar Bawa Bwari, on ‘The Business Case for Nigeria, as a Mining Destination,’ at the Mines and Money London, 26th – 29th November, 2018
Protocols and Introduction
It is a great pleasure to be here at the 16th Edition of Mines and Money London, and I must thank the organisers for this opportunity to address the leaders and innovators in the mining and finance sectors who are here today.
- Today, as Africa Showcases its commodity investment opportunities and the unique prospects of doing business in the region, we hope to leave this place with tangible deliverables that we can proudly take back home.
- Mines and Money London is practically the last big Mining event of the year and therefore a great opportunity to finally convince institutional investors and financiers to invest in the mining opportunities that our countries have to offer.
What Africa Needs
- Since Africa is home to 30 percent of the world’s mineral resources, our continent has a great role to play in sustaining mineral supply for the industrialisation and economic emancipation of a large part of the globe.
- Sadly, Africa is also home to the world’s youngest and rising generation of people who continue to flock to other lands in a desperate grab for opportunities not readily available in their home countries. The best way to stem the tide of illegal migration and reduce world poverty therefore is to grow African economies by investing in businesses that utilise our abundant natural resources to create employment for our teeming youth population.
- As we know, it is businesses, not governments, that drive growth and create wealth. As leaders in a continent facing incredible challenges, we must take swift advantage of the current resurgence in mineral commodities to create wealth for our people.
- Strategic minerals of the future like Nickel, Cobalt, Lithium, Graphite, Copper and Rare Earth Elements hidden beneath our lands must be unearthed, exploited and brought to the market through a concise mineral policy that promotes transparency and sustainable mining.
- For too long Nigeria was seen as an oil nation rather than a mining destination, but that is beginning to change with the coming of the current administration, led by President Muhammadu Buhari.
- In the last three and half years, the government has invested so much resources in the solid mineral sector that it is now one of the arrowheads of our nation’s diversification agenda.
- It may interest you to know that mining started in Nigeria as far back as 1902, but the discovery of oil led to the neglect of the sector, and subsequent policy changes drove off our foreign investors. We have since revamped our policies, and our mining industry is now completely private sector driven with government acting as facilitator and regulator.
- Now, you can own 100% of your business, bring in mining equipment without paying any duties, and get 3 – 5 years tax holidays. We also allow free transferability of funds, deductibility of environmental costs and permission to retain and use earned foreign exchange. Indeed, our mining laws, as exemplified by the Nigeria Mineral and Mining Act 2007, is very competitive compared to other advanced mining jurisdictions.
- We have also built the capacity of our staff in the Mining Cadastre Office and set up transparent processes to ensure that laws are fully implemented. Mining licences are given strictly on a First Come First Served basis and we have a Use it or Loose it policy that ensures that speculators don’t hijack choice leases.
- We are aware that a major part of the problem with our mining jurisdiction has to do with perception rather than reality so we began by 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.This will cut down the time for processing licenses from 45 days to 15 days.
- We are also developing new Mineral Export Guidelines to ensure accurate data on mineral exports and reduce time for processing Mineral Export Permits from two weeks to two days.
- We are constantly upgrading and expanding our data Base to de-risk the Nigeria Mining jurisdiction and make our potentials more palatable to investors. We recently obtained a 25,594 line KM electromagnetic data over three blocks.
- We have just awarded a N15 billion contract as part of our Integrated Exploration Programme to five exploration companies for the exploration of priority minerals like gold, lead, zinc, iron ore and rare earth metals. Delineated areas arising from these activities will be blocked and concessioned to interested mining investors.
- Our Nigerian Geological Survey Agency, NGSA, has undertaken 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 towards achieving ISO accreditation.
- As a complement to these efforts, the NGSA entered into a number of MoUs with countries whose advanced mining jurisdictions can assist us in geochemical mapping and remote sensing, Aero-geophysical survey, geo-database construction and geo-information sharing.
- 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.
- As many analysts have noted, Nigeria is still essentially a GreenField with 44 mineral types and some of the highest grades of minerals anywhere in the world.
- An Australian company, Symbol Mining/Goidal Resources currently mines lead zinc ore with a grading of 22% Zn (zinc) compared to the global average of 6%Zn (zinc).
- Similarly, Kogi Iron recently announced that they have been able to develop a process route that can produce an acceptable iron ore concentrate from their high phosphorus iron ore deposit for the production of high quality steel. This proves that similar iron ore sites in the country can be harnessed to produce steel products locally.
- Nigeria is today self sufficient in cement production because of the commercial quantity of limestone which occurs in different parts of the country. Annual national demand for this mineral is 18 million metric tons.
- The quality of Nigeria’s bitumen has been adjudged to be amongst the best in the world, with experts agreeing that it has potential for easy development and possibility for high return on investment.
- Nigeria’s desire to have coal fired power to provide at least 30% of the national electricity generation creates a great opportunity for investment in our coal resources, spread in thirteen States of the Federation.
26.The Iron and Steel sector also offers abundant opportunities, expecially since no industrialisation can take place without this material. Nigeria’s estimated demand profile stands at 17 million tons per annum but local production is a mere 2.2 million tons.
- In the past five years Nigeria has held a frontline position amongst the exporters of tin concentrates globally. We are now in the process of establishing a platform for trading tin concentrates. The opportunities for investment exist in both primary and placer tin, as well as in smelting.
- We recently launched a Roadmap for the development of industrial minerals aimed at making Nigeria self sufficient in the construction industry and free up opportunities for the development of quicklime for water treatment, dimension stones for construction, calcium carbonate, gypsum and talc for pharmaceuticals, cosmetics and other manufacturing industries, and Bentonite and Barites for the oil and gas industry.
- Investors can therefore take advantage of the gaps which remain very huge in many areas. For instance, despite the efforts of companies like Kogi Iron and the African Natural Resources and Mines Ltd which is planning to operate a 500,000 metric tons per annum steel plant, complete with a 35 megawatts power plant for captive consumption, Nigeria still imports an estimated $3.3 billion worth of steel and associated derivatives annually.
- There are also opportunities to be found in the establishment of ISO certified laboratories and in setting up metal extraction and refining plants in Nigeria because the steel rolling Mills in the country are sustained by 100% scrap metals.
- 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. Investors can therefore enter into Public-Private-Partnership arrangement with government to provide mining infrastructure.
- As you can see, the opportunities for investment are many and the return on investment could be 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 investors is on the rise.
- However, there is still a huge gap between what we have, what we need, and what we can produce locally. We have been able to bridge that gap in some places like in cement production in which we are self sufficient.
- We hope to do same with phosphate so as to meet our fertiliser needs. With over 70 percent of the Nigerian population being farmers, this is one business that cannot fail if handled right.
- Distinguished ladies and gentlemen, the Government is serious about de-risking the mining sector through better management of artisanal miners, better policing of the mining environment for safety and environmental compliance, increased exploration activities for quality data collection and better collaboration with stakeholders in the mining sector.
- Permit me therefore to use this forum to assure investors gathered here today 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. There is no better time to come to our country, than now.
Thank you all.