September 11, 2018

Solid minerals: Nigeria mining sector, emerging investors’ goldmine

Solid minerals: Nigeria mining sector, emerging investors’ goldmine

Mining site

By Michael Eboh

THE Nigerian mining sector is gradually becoming the toast of both local and foreign investors, going by the current reforms undertaken by the Federal Government in the sector.
Data obtained from the Federal Government revealed that Nigeria currently has over 44 known types of minerals of varying mixes and proven quantities, some of which are concentrated in certain regions.

Despite these huge potentials, mining in Nigeria, over the years, had been rudimentary and predominantly undertaken by small entrepreneurs and unlicensed, unskilled individuals, a situation that aggravates health hazards and environmental degradation.

It is a known fact that every geo-political zone and state in Nigeria has unexplored or underutilised mineral deposits due to the focus on the oil sector and lack of investment and funding.
Realising these, the Federal Government in its Economic Recovery and Growth Plan 2017 to 2020, declared that the solid minerals sector is one of Nigeria’s most promising growth sectors.
According to the document, although its overall contribution to GDP growth is small, its contribution to GDP doubled from N52 billion in 2010 to N103 billion in 2015, adding that in 2015, quarrying and other mining accounted for 89 per cent of the sector while coal mining represented seven per cent and metal ores four per cent.

These had led the Federal Government to develop a roadmap for the industry, aimed at growing the sector, ensuring that its contributions to the country’s GDP is significant.
Confirming the growing attractiveness of the sector, Minister of State for Mines and Steel Development, Mr. Abubakar Bawa Bwari explained that due to government’s commitment to growing the mining sector, leading to the leverage of about $3.32 billion private investments into mining projects as provided in the ERGP focused lab, Nigeria is today ranked among the most conducive environments to do mining business.

Bawa had told participants at the just-concluded Africa Down Under 2018 Conference in Australia, that given this new trend, private investments into mining projects covering gold mining and refining, foundry works, lead/zinc exploration and production, tin and columbite mining and processing among others, have experienced unprecedented leap in production.
He said: “The Nigerian mining sector is now more than ever an investors’ haven evidenced from the high grade deposits exploited by current operators coupled with the conducive and competitive investment climate comprising 100 per cent ownership of mining project as secured by the Nigerian Minerals and Mining Act, 2007; waiver of customs and import duties for plant, machinery and equipment imported for mining operations; tax holidays of three to five years; free transfersbility of funds; permission to retain and use earned foreign exchange; capital allowances of up to 95 per cent of qualifying capital expenditure and predictability of environmental costs.”

He further stated that this significant leap in Nigeria’s mining fortune was borne out of the present government’s resolve to hinge on the experience gained at the Economic Recovery and Growth Plan Focus Lab where the Ministry of Mines and Steel Development focused on removing challenges hindering formal exploitation of gold, tin and lead-zinc mineral endowment.
This, Bwari noted, was following reports of massive exports of these mineral commodities to foreign smelters against Nigeria’s low production figures.

He said: “New export guidelines for the export of mineral commodities have been developed, which seeks to ease challenges surrounding grant of export permits and licensing issues. Formal mining is on the rise in Nigeria and this is evidenced by the number of mineral titles held by investors.”

“Prominent among these projects include Symbol Mining/Goidal Resources that are currently developing an open pit mine for exploiting lead-zinc deposits located in Bauchi and Nasarawa states.

“First Patriots are already mining and producing 5,000 tonnes per month lead-zinc concentrates; Thor Explorations Limited that are continuing with mine development and exploration works over Segilola Gold Project; two coal mines operated by Eta-zuma Group and Ashaka Cement Plc; and Promethean Resources that engages in the production of tin and columbite concentrates for export.”

Bwari allayed fears about easy transportation of finished products, stating that the government has gone ahead with strategies to solve challenges through the implementation of a National Integrated Infrastructure Masterplan.

Specifically, he said the dredging of the River Niger had been concluded while works at Warri Port and the Escravos Channel was about to be completed.
According to him, these projects would facilitate export and import of goods, along with the rail line from Warri Port through Ajaokuta to ltakpe, which was already completed.

He added that the Central Corridor Railway Line linking Warri Port to Abuja through mineral resources endowed regions of the North Central, home to iron ore, steel plants, coal resource and pegmatite-bearing lithium, was under construction.

“All these are aimed towards diversifying the Nigerian economy through solid minerals. Nigeria before now was a mining destination before oil and gas took over. So, the new direction is to generate revenue and jobs through the mining sector,” he maintained.

In spite of the attractiveness of the Nigerian mining sector, Chief Executive Officer of Comet Minerals Limited, Mr. Stephen Davis, advised potential investors in the sector to play by the internal security arrangements and rules to avoid ugly incidents, stating that there are internal security protocols that companies must follow.

He commended Bwari, describing him as a man of vision who is leading a great team to refocus the mining sector.

“The Nigerian minister of State for Mines and Steel Development has a great team and after about 11 years of being around, Nigeria has emerged as a world class centre for Nickel production.

“The Nigerian Mining Act, good team of experts, advisers and technical personnel, coupled with the minister’s resolve and capacity to assist companies to thrive and build capacity upon good mining environment and conditions have helped the country to be an excellent ground for mining.”

Also speaking, Dr lan Burston, Chairman Kogi Iron, confirmed that hitherto mining was difficult in Nigeria but the minister and the present government had created a conducive and friendly environment for mining businesses to thrive.

He said: “Nigeria is a very serious mining province from what I have experienced lately. The geological experience in Nigeria has been significant and I am very excited. By this month of September we will begin our very first export to China. We are also working on building Nigeria’s best mining house with the production of at least four products. In ten years we hope to have five operating mining houses in Nigeria.”

Speaking in the same vein, Director, AG Vision, Brad George, who has worked with 16 nations in the area of solid minerals exploration and presently operating in the North East on a 15,000 square kilometres land the largest in Nigeria, expressed conviction that Nigeria has a very friendly environment to do mining business.
“l believe gold market has very good prospects like it happened in nickel and zinc because Nigeria has a solid and workable mining system.”