As a fall out of the on-going national mining summit in Abuja, AYONI M. AGBABIAKA, reports some of the highlights of the event including three-year tax holiday granted to international miners. MINING Business Fayemi The federal government has described the ongoing 3 days National Mining Summit at the International Conference Center, Abuja, as a key step to unearthing Nigeria’s mining sector.
Speaking yesterday at the opening ceremony of the event, the Acting President, Prof. Yemi Osinbajo, said, mining remains a crucial one in the face of economic challenges bedeviling the country. “For us in Nigeria, this summit is a key step. Th e mining sector is a crucial one for the Nigerian government.
Th e president has over the last two years highlighted the potentials of the mining sector especially in the recent decline of the oil prices” which lead to the recession as a result of our over dependence on oil. The VP assures that all the mining challenges including low productivity, illegal mining, diffi culty in mining business have been noted and are been tackled. He pointed out that to achieve this, the mining roadmap as been compiled to guide and restructure the solid mineral industry for the next 10 years.
Osinbajo further revealed that “internationally we’ve secured one hundred and fifty million Dollars from the World bank that will be used to provide technical assistance that will make loans available to small artisanal miners. He also told the audience that the federal government is already working on upgrading “our mining data base” as well as granting “three years tax holidays for mining investors” Chief Executive Offi cer,
Th e Nigerian Stock Exchange, Mr. Oscar Onyema in his goodwill address, acknowledge the far reaching positive effect the outcome of this conference will have on the economy at large and specifi cally on the Nigerian capital market. He noted that “in August of 2016, the National Bureau of Statistics (NBS) announced that Q2 Gross Domestic Product (GDP) declined by -2.06%, signaling a recession. GDP further contracted by -2.24% (year-onyear) in real terms in the third quarter, exacerbated by the steep decline in oil and gas production due to sabotage of oil export facilities; low commodity prices; acts of vandalism and insecurity across the country.
However according to the NBS, “growth in the non-oil sector of the economy returned to positive territory in Q3, largely due to improved performance of Agriculture and Mining sectors – the two frontiers of this administration’s transformational agenda for economic recovery, r e v e n u e d i v e r s i f i c a t i o n ; job creation and economic empowerment for Nigerians. “Th e Nigerian economy is at a critical juncture of its economic recovery from the worst economic recession in recent times.
It is our humble expectation, that the National Mining Summit will provide the framework for a sustainable and enabling environment for the continued growth and development of the Mining sector and the diversification of the Nigerian economy in general. He pointed out that, “For the Nigerian mining sector, current statistics present an immense opportunity for growth. Today the sector accounts for 0.02% of exports, 0.3% of national employment and contributes 0.5% an estimated $2.0 billion to the nation’s GDP”
However, “this representation pales in comparison to global trends for the sector. In 2015, the South African mining industry contributed $19.6billion towards the country’s GDP representing 7.1% of overall GDP. Th e Canadian mining sector contributed $56.0 billion (3.4%) to GDP and accounted for 19% of its export value in the same year. He added that, “the Australian mining sector on the other hand contributed 6.9% ($114.9 billion) to GDP in 2016.
“Globally, the Metals and Mining sector is among the largest industry sectors by the number of companies in operation and its employment size.
Th e sector has always been reliant on the capital markets to provide funding for the exploration and development of high and low risk mineral projects. “Between 2005 and 2014, Metals and Mining companies on Australia’s Securities Exchange raised approximately $69.1billion in IPOs and secondary market issuances. Similarly, the Toronto s t o c k e xc h a n g e re c o rd e d $2.6billion in equity capital raise and 505 project fi nancings YTD. “According to the 2017 MSCI World Metals and Mining Index, the market capitalization of large and mid-cap stocks across twenty three (23) ‘Developed Markets’ now stands at approximately $500.97 billion.
The index annual performance grew by 56.29% in 2016 from a 2015 decline of 39.43%, outperforming the MSCI world index which rebounded from a 0.87% decline in 2015 to a modest 7.51% growth in 2016. Th is trend was also witnessed in our domestic market where the New Gold (a commodity backed ETF tracking the price of South African gold) outperformed the NSE ASI, recording a YTD performance of 50.37% and a 4 Year return of 185.64%, in comparison to the NSE ASI which recorded a YTD performance of 23.75% and a 4 Year return of 15.57%.
He stressed that “the role of the capital market in harnessing the Nigerian Mining sector’s potential and providing entrepreneurs with access to large, aff ordable funding for capital intensive projects cannot be overemphasized. He explained that, “Investors typically look to the capital market for credible issuers for wealth creation; while the issuers leverage the capital market to attract global investments, resulting in enhanced corporate governance and a diverse pool of investors. “I hereby encourage the federal and state governments as well as the mining industry here present to look seriously at leveraging the opportunities that abound in the Nigerian capital market.
Th e Exchange also looks forward to working closely with the Ministry of Mines and Steel Development towards achieving its mandate of establishing a $600m investment fund for the sector. In his remarks, the minister of Mines and Steels Development, Dr. Kayode Fayemi, said, the African Mining Vision (AMV) was adopted in February, 2009, during the African Union (AU) Summit. Th is was in furtherance of the October, 2008 meeting of African ministers responsible for mineral resources development. “Th e AMV is by far one of the most promising instruments that unite the whole of Africa towards achieving particular objectives. “It is Africa’s own response to tackling the paradox of great mineral wealth existing side by side with pervasive poverty, through building economic and social linkages that benefi ts Africa.”
“For us in Nigeria, in view of present realities, we have found our bearing from the AMV, and domesticated its provisions in our “Roadmap for the Development of the Nigerian Mining Sector. Accordingly, one of the priority goals of our government is to position our Mining sector to play a greater role in sustainably diversifying our country’s revenue base, creating jobs, and fasttracking industrialization. He added that, “this is not a tall order, as we are evidently endowed with an abundance of mineral resources.
We however realize that we cannot go very far with our agenda if we do not feature strongly in the reckoning of the international mining community as a serious mining destination. According to the minister, the AMV prescribes integrating mining into industrial and trade policy at regional level, and encouraging collaboration and healthy competition amongst countries. “We therefore consider it important to have a platform for bringing stakeholders in the sub-region together, to share ideas and compare notes on how to collaborate in making our resources work for our people.
He adding that, “asides sharing similar geological formations, we have similar aspirations and face comparable challenges, which make it imperative for us to work together. “It is our vision to use this annual conference as a platform to place Nigeria prominently in the international mining calendar, and beneficially attract greater attention to our country and sub-region. The exhibition director, Afrocet Montgomery, George Pearson, stated that Construction Machinery (ConMin) West Africa has been launched in West Africa to serve the growing construction machinery, infrastructure and mining equipment industries in the West Africa region.
