Irresponsible neglect of solid minerals IN any other country, President Goodluck Jonathan’s recent revelation of the discovery of 44 additional mineral types across Nigeria would have provoked considerable excitement among investors. The tepid response in global mining circles, however, reflects the diminished attraction of Nigeria as a long-term investment destination. To reverse this poor image, we should urgently roll out a road map to develop mining and demonstrate strong commitment to implementing it. It is one of the sad paradoxes of the Nigerian story that the country is so richly blessed with minerals, but has, for four decades, neglected them all to rely almost exclusively on oil and gas for external revenues. Several years ago, research had shown that scores of mineral types were available across the country and that all the 36 states and the Federal Capital Territory hosted at least one or more mineral types. Indeed, the then Ministry of Solid Minerals and the Raw Materials Research and Development Council did extensive work to prepare 34 mineral types ready for immediate exploitation. And under Oby Ezekwesili as minister, a globally acclaimed Mining Cadastre Office was set up and investors from around the world were preparing to move in, only for the minister to be redeployed. The “Nigerian factor” ensured that the efforts went down the drain as her successors were totally uninterested in taking the programme to the next level. It is refreshing that the current administration recognises the value of mining. The problem is that there has been more rhetoric than concrete action and the industry remains largely in the hands of small operators and artisans. Mining licences have been issued, but the activities of many of the operators – many of whom are Chinese and Indian firms – are opaque and a far cry from the promise of large-scale mining, industrialisation and job creation that Ezekwesili’s reforms suggested. Action should be taken on the 34 identified minerals first if we are serious. Today, mining contributes 0.3 per cent of the Gross Domestic Product, much lower than the 3-5 per cent the International Monetary Fund says Nigeria can achieve with the right policies. But mining has a rich history in Nigeria. At independence in 1960, it contributed one per cent to the GDP. Solid minerals exploitation had started in 1903 even before amalgamation and tin, coal, columbite, bauxite and lead were exported. The cities of Jos and Enugu sprang up as the nexus of tin and coal mining respectively. Coal production reached 574,758 tons by 1960. The Bureau of Public Enterprises, the privatisation agency, projected that mining could create about one million new jobs, earn foreign exchange for the country, provide extra tax revenues, stimulate manufacturing and wean the country off its dependence on oil and gas. For too long, the federal and state governments have ignored well-reasoned calls for the immediate exploitation of solid minerals, which, unlike oil that occurs in a few enclaves, are available in commercial quantities in every state. Our state governors are shamelessly crying over dwindling revenues that are shared from the Federation Account every month when 34 mineral types are sitting under the ground, spread across 450 locations nationwide, with no state left out. A National Bureau of Statistics survey found that only 13 of the identified minerals were already being mined. It identified five opportunities derivable from mining, namely exports and use in local industries; new industrial and downstream products; massive job creation; technology and skills transfer, and development of infrastructure. What is required is simple: A comprehensive policy framework that will facilitate massive private domestic and foreign investment. The government should return to the master plan for solid minerals developed under Ezekwesili and Nasir el-Rufai, who, as head of the BPE, prepared the privatisation of the moribund state-owned mining assets, which have become huge liabilities to the taxpayers. Efforts should be made to woo the American, Australian, Canadian, South African and Korean investors who lost interest when our government did a policy reversal that has since left the field to dodgy Chinese, Indian and Lebanese operators. South Africa’s economy is built on mining, providing 60 per cent of its export revenues in 2011, while in Chile, mining contributes 15.2 per cent to the GDP. Experts estimate that Nigeria can soon earn $1bn and $2bn annually from the gold in Zamfara State and bitumen in Ondo State respectively. Intensive efforts should be made to reassure investors that there will be no sudden policy reversal. Instead of waiting every month to share oil revenues, let our state governors demand the exploitation of their solid minerals, which is on the Exclusive Legislative List. We should not continue to import gypsum, talc, barites, iron ore, bitumen and rock salt for our cement, steel, construction and ceramics industries when we have them in abundance in Nigeria. Estimates of bitumen deposits here range from the equivalent of 13 billion to 40 billion barrels of oil; our coal is said to be highly valued around the world, while gold is abundant in Zamfara, Oyo, Osun, Sokoto and Katsina states. Nasarawa State alone hosts 23 mineral types. We need to amend the 1999 Constitution to allow states to control their own minerals and reduce the destructive dependence on oil. The reality of dwindling revenues and the prospect of resource control should be a powerful incentive for states to press for the immediate expansion of mining.
Posted on: Thu, 27 Mar 2014 12:39:32 +0000
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