Nigeria covering an area size of 923,768 km2 before independence on 1st of October,1960, has largely survived on agriculture and mining experiences. Blessed with over 40 minerals including –tin ore, iron ore, coal, gold, columbite, wolframite, tantalite, bitumen, uranium and lead-zinc amongst others. Despite these vast mineral deposits, the Nigerian mining industry is largely untapped and only accounts for a fraction of the country’s Gross Domestic Products (GDP). AYONI M. AGBABIAKA, takes a look at how mining has fared since independence.
History of Nigerian mining
The British colonial government created the Mineral Survey of the Northern Protectorates in 1903 with the Southern Protectorates following soon after. Nigeria started major production of coal, tin and columbite by the 1940s. In 1956 when oil was discovered, the mineral industries suffered when the focus shifted to oil exploration. In the 1960s, the Civil War led to mining experts leaving the country and mines being abandoned. Mining regulations drastically changed and productivity declined. In the late 1990s the government started selling government-owned mining companies to private investors.
Coal, Lignite and Coke mining in Nigeria
Coal was first discovered in 1909 and the industry thrived for some years before the Civil War. Prior to the mining industry’s privatisation, the Nigerian Coal Corporation held the monopoly on mining, processing and selling coal, lignite and coke products. Despite the war ending in the 1970s the coal industry did not recover. Attempts to mechanise the industry in the 1970s and 1980s failed and were ultimately abandoned.
Gold mining in Nigeria
Abundant gold deposits exist in Northern Nigeria in Anka, Maru, Malele, Tsohon, Osun, Birnin, Gwari-Kwaga, Bin Yauri, Gurmana and Iperindo. Production started in 1913 and peaked in the 1930s before declining during the war. Mines were abandoned and like the coal industry, the gold mining industry also didn’t recover. Although there are no large-scale gold mining operations in Nigeria currently, there is some small-scale gold mining done by artisans who know little or nothing about beautification of the yellow metal; thereby creating loss of revenue to the giant of Africa. This process have continued to cause underdevelopment in Nigeria mining sector having to import processed minerals, even though it could be locally produced. If only the government is serious!
Iron Ore mining
The purest deposits of iron ore in Nigeria is in Itakpe in the Kogi state. As one of the operational mining industries in Nigeria, the country is exploring exporting iron ore in excess of domestic requirements. The government of Nigeria has also invested in iron ore operations in Guinea but the Itakpe Iron Ore Company as well as the Ajaokuta Steel Company is still far from being a reality.
Uranium Mining
The British Geological Survey recently discovered several major uranium deposits in Adamawa, Plateau, Taraba, Cross River, Kano and Bauchi states. The existing uranium mining assets are being liquidated as in 2016. It is not known whether the recent discoveries will be further explored.
Wolframite, Columbite, Tantalite and Bitumen mining
Despite abundant deposits, only small-scale mining is done on these minerals.
Ecological issues
Environmental officials of the government of Plateau state are concerned with the 1,100 columbite and tin mines that were abandoned after the mining boom of the 1960s. According to their research these mines are posing a serious risk to millions of people residing in the area. There have been reports of radioactive shale from the mines from the districts of Riyom, Bassa, Bukuru, Jos and Barikin-Ladi, according to Mining Africa.
The ‘World Risk Report’
However, the ‘World Risk Report’ published by the Mining Journal, indicated that Nigeria has made remarkable improvements in both hard risk and perceived risk factors. It described the Nigerian Mining Jurisdiction as now having a better investment risk profile than several other leading jurisdictions, and among the best in Africa.
Revenue in kobo and naira
The Ministry of Mines and Steel Development (MMSD) with the new direction from government has strengthened its revenue base from N2 billion generated for the whole of 2016 to over N3.5 billion contributed to the federation account through royalties and fees collection.
The mining police
Bent on improving, the sector saw an improved inter governmental activities as the law providing for the establishment of the mining police became operational with the support of the Nigeria Police Force, Ministry of Interior and other security agencies. This partnership came to life as the need to effectively regulate the sector, provide mines safety, security and tackling the menace of illegal mining became necessary to stem the revenue loss to illegal mining across the country.
The web portal
The ministry launched a web portal at the cost of N750 million to ease the hassles associated with paper registration in the mining sector. Towards achieving best practice in mineral sector governance, “we conceived the need for a centralized GIS Web portal with supporting ICT Infrastructure and the automation of ministry services; all backed up by requisite policy framework and human capital development for sustainability. The overall objective of the project was to increase provision of reliable information and knowledge to enhance promotion of investment in the sector using technology driven innovation.
Significant improvement was also recorded in the Mining Cadastre office’s administration of mineral titles; with the agency now consistently issuing licenses to applicants within 30-45 days as stipulated in the Mining act, provided the applicant has fulfilled all statutory requirements,” former minister of mines and steel development, Dr Kayode Fayemi, had said. A claim the Miners Association described as not true for now.
Enforcement
Strict enforcement of the ‘use or lose’ clause in the mining law had led to the compliance of defaulting mining companies who are now putting their licenses to productive use leading to increased economic activities. More companies are now ensuring they pay their royalties and taxes as and when due, thereby increasing the revenue base. This is evident in the revenue growth from N2 billion to N3.5 billion in recent years.
Investment Promotion and Mineral Trade Department (IPMT)
The ministry had also establish a new department to monitor and control the local mineral trade chain comprising purchasing, sales and export. In its short span, the department has been able to put forth a roadmap for the development of a sustainable framework for mineral trade and export ecosystem. Working in collaboration with the Mineral Sector Support for Economic Diversification (MSSED or MinDiver) project office, the Nigerian Export Supervision Scheme (NESS), Nigerian Export Promotion Council (NEPC), Nigerian Customs Service (NCS), the Presidential Enabling Business Environment Council (PEBEC) and the Federal Ministry of Finance (Home Finance department), new mineral export guidelines and procedures have been developed as immediate remedial measures to curb revenue leakages from mineral exports.
Improved funding
The federal government secured $150 million World Bank loan for the Mineral Sector Support for Economic Diversification (MinDiver) programme aimed at making finance available to Artisanal Small Miners (ASM) operators through development finance, micro-finance and leasing institutions. The fund will also help to bring back on stream previously abandoned proven mining projects like tin ore, iron ore, coal, gold and lead-zinc.
In 2017, the sector witnessed the birth of a new board for the Nigerian Solid Minerals Development Fund (SMDF) which launched a N5 billion fund to provide single digit interest loans to mining projects in Nigeria in collaboration with the Bank of Industry (BOI).
Another N30 billion Natural Resources Intervention Fund for the promotion of exploration of new minerals and to strengthen the regulatory capacity of the ministry was ‘partially’ accessed.
MIST
The government established a National Council on Mining and Mineral Resources Development (NCMMRD) and the Mining Implementation and Strategy Team (MIST), which became operational in 2017.
MIST is a multi-stakeholder team with the mandate to guide the implementation of the roadmap while NCMMRD was designed to be a well-structured platform where stakeholders in the sector can converge periodically to develop policy advisory, validation, and other interventions, to effectively guide government in achieving the full implementation of the Roadmap and the achievement of the targets contained therein. Membership of the NCMMRD comprises all state commissioners with oversight of mining in the respective states as well as other stakeholders in the sector.
Improvements in geological prospects
Collection and dissemination of geosciences data has been expanded as characterization of Kaolin in Ekiti and exploration for gold in Niger states was completed while the geology and mineral database of 30 states was generated. Also, geological mapping of 1:50,000 sheets 53 Maru (NW, NE, SW, and SE) was also carried out.
Other policies to drive sector
A new mineral export guidelines and procedures was designed to curb revenue leakages from mineral exports.
$600m investment fund
An Investment fund of $60 has been worked out for the sector, in collaboration with the Nigerian Sovereign Investment Authority and the Nigerian Stock Exchange and others.
Research grant
An N100million from the intervention funds was expected to cbe used to support Geo-sciences research in tertiary institutions through the provision of research grants to select universities.
Gold exchange programme
More partnership with some state governments and the private sector was witnessed in the Gold Purchase scheme. The mandate of the scheme included equipping of the artisanal miners; provision of extension services; and the off-take of all the gold produced by the participants in the scheme. The aim is to facilitate employment creation, poverty reduction, and increase in revenue to the federation account.
While the country continues to push for extensive Electromagnetic Airborne Geophysical Survey of promising parts of the country, it is high time it took the mining sector more seriously for a sustainable economic growth of future generations.
