Solid minerals: Revisiting a neglected gold mine

The solid minerals sector has been a long neglected one but the new drive towards diversification has rekindled interest in the sector, Anna Okon writes

The commercial value of Nigeria’s solid minerals has been estimated to run into hundreds of trillions of dollars. It is also estimated that Nigeria could earn $40bn annually from gold mining alone.

“Iron ore alone, if well managed, can fetch Nigeria a revenue of $50bn to $60bn annually,” a consultant geologist and the Chief Executive Officer, Walled Resources, Chief Oyewola Oworu, said while presenting an overview of the Nigerian mining sector and its potential.

The domestic mining industry is, however, underdeveloped, currently accounting for only 15 per cent of Nigeria’s Gross Domestic Product.

The global decline in oil prices and the need to diversify the economy away from oil has, however, made the government to shift attention to the sector.

On its Roadmap for the Growth and Development of the Nigerian Mining Industry, the Ministry of Mines and Steel Development, said it was on a process to deepen reforms, attract new investors and collaborate with a wide network of partners and stakeholders to build an attractive mining system.

It said the strategies to achieve a $27bn revenue generation from the sector by 2025 were: restoring stability and market confidence in the Nigerian mining sector, re-establishing Nigeria as a competitive mining and mineral processing centre, returning Nigeria to the global export market, competing selectively in the trade of refined metals and minerals in addition to exporting select ores.

The ministry said it would prioritise seven minerals – iron ore, coal, bitumen, limestone, lead/zinc, gold and barite – while placing selective emphasis on mineral assets critical to existing downstream projects such as manganese for the steel industry.

It would also focus on domestic markets, selling ore and processed materials to buyers at an optimal quality level to win market share from imports as well as serve domestic and export markets when global markets recover.

The third action plan would be targeting operators and participants by emphasising building competitive enabling business environment and sector for all entrants, encouraging the formalisation of artisanal miners.

Furthermore, it said it would prioritise companies and end users that already purchased minerals and processed materials from offshore sources, such as the ones in the cement, oil, power and industrial sectors.

The president, Miners Association of Nigeria, Alhaji Shehu Sanni, linked the problem of the sector to the introduction of indigenisation policy of the 1980s that discouraged foreign investors, saying the required sustainable attention from the government to support the sector became weak due to the discovery of oil.

He said for the sector to grow, there was a need for a conscious and deliberate action that would be strategic to its development, adding that the N30bn intervention fund established by the present administration to salvage the sector was inadequate.

He appealed to other players in different sectors of the economy to show interest in investing in the sector, saying that there must be a collective interest to complement the efforts of the Federal Government to resuscitate the sector.

On her own part,the National President, NACCIMA, Chief Alaba Lawson, explained that across the world, financing mining was a difficult task, stressing that in Africa it was even more difficult due to the fact that unlike crude oil, mining was a long haul and came with a lot of risks for investors.

She listed some of the challenges hindering the sector to include political instability, absence of appropriate mining policy and environmental laws and regulations, lack of human resources and the expertise to handle mining administration.

According to her, the issues agitating the minds of prospective local investors in the private sector in the wake of the new attention to the mining sector were the rights of states to mine minerals in their jurisdiction and issues of royalties. Others, she said, included establishment of specialised mining financing companies, support for financing institutions, environmental issues, and social issues among others.