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The President Tinubu’s Strategy for Growing Nigeria’s Mining Industry for Long-Term Economic Development

Nigerian mining has a huge potential to support economic diversification and growth. It does, however, face formidable obstacles that call for coordinated action from the international community, industrial players, and the government.

President Bola Tinubu, said the mining sector would play key roles in his administration’s determination to resuscitate the country’s economy, during a town hall meeting with mining and agro-processing stakeholders in Lafia, Nasarawa State capital recently. He indicated that few nations were as endowed as Nigeria, given the industrious, energetic population and vast inventory of the land, water and natural resources, saying Nigeria has abundant, commercially viable solid mineral deposits such as coal, limestone, iron ore, bitumen, lead, zinc, gold and a variety of gemstones. After he was elected in the last poll under the banner of the All Progressives Congress (APC), Dr. Dele Alake was appointed Minister of Solid Minerals Development by President Tinubu in 2023. Now that he is in charge, the industry is experiencing a renaissance in development as the government works to broaden the country’s economic base.

Segun Tomori, the Honourable Minister of Solid Minerals Development’s Special Assistant on Media, emphasized the activities of the current administration in a statement noted that: “Over the years, the contribution of mining to Nigeria’s GDP has been less than 0.5%. Therefore, substantially scaling it up will be required to make a significant impact on the economy. This fact is not lost on Alake as he swung into action on assumption of office to develop the Solid Minerals Development roadmap. Tagged the “Agenda for the Transformation of Solid Minerals for International Competitiveness and Domestic Prosperity”, the roadmap seeks to increase the mining sector’s contribution to the nation’s GDP to at least 50%. Highlights of the 7-point agenda include, the creation of the Nigerian Solid Minerals Corporation; Joint Ventures with Mining Multinationals; Big Data on specific seven priority minerals and their deposits; 30-day grace for illegal miners to join artisanal cooperatives; Mines Surveillance Task Force and Mine Police; Comprehensive review of all mining licences and the creation of six Mineral Processing Centres to focus on Value-Added products. According to official reports, efforts are ongoing to improve the Nigerian Mining and Minerals Act 2007.

Security, immigration and illegal miners

Many mining areas in Nigeria are currently experiencing illegal mining activities, which are often perpetrated by individuals or groups both National and foreigners seeking quick gains without adhering to regulations. This has led to various forms of insecurity challenges in some parts of the country. A typical example was the recent explosion in Ibadan which the state confirmed was caused by illegal miners who were storing up explosive devices in a residential area of Bodija. In Ibadan, Oyo State’s Old Bodija community, there was an explosion on January 16 that left five people dead, 77 injured, and 58 houses destroyed.

Enhancing security in mining regions is vital to attract investors and ensure the safety of workers and communities. “Aside from launching the roadmap, the Minister has since followed through with concrete steps to bring the action plan to fruition. Addressing prevalent security challenges is a sine qua non to improved mining environment and an incentive for investment in the sector, hence, the Minister’s high-level engagements with the National Security Adviser (NSA) to the President, Minister of Interior and other top security officials to fine-tune modalities for the establishment of the Mines Surveillance task force and Mine police.”

The statement also said: At a recent meeting with the Interior Minister, Alake had this to say, “If we are to achieve our aim of developing solid minerals in the country, we have to address the challenges of insecurity, the menace of illegal miners and the activities of immigrants that are not properly documented, but mining our resources and illegally carting away funds that should accrue to our nation. We cannot achieve this without synergy with the interior Ministry.”

The deliberations led to the setting up of a joint task team by the two ministries to devise modalities for collaboration on immigration issues and securing the mining sector. Plans have also reached an advanced stage on the establishment of the special police outfit called Mine Police that will be sourced from the Nigeria Police, specially trained to detect illegal mining and apprehend offenders. The Mine Police will be controlled by the Ministry of Solid Minerals, and its operation will also cover marine and blue economy.

Addressing security issues can be facilitated by cooperative efforts with local communities and security agencies. “Fostering cooperation between host communities and mining operators is crucial to a secured mining environment, hence, the Ministry’s Mines Inspectorate is being strengthened to verify the authenticity of mining agreements whilst the repositioning of Mineral Resources and Environmental Management Committee (MIREMCO) for protection of community rights and prompt payment of due royalties is underway. Paramount rulers of host communities will also be carried along in the signing of mining agreements to ensure the interests of the people is protected.”

He added that; “The era in which Nigeria is short-changed in mining operations is coming to an end as the proposed Solid Minerals Corporation will give the country a stake in all mining activities. Conceptualized as a Special Purpose Vehicle (SPV) to engage with multinationals, the corporation will enable the government to harness mineral resources substantially.

“A special purpose vehicle (SPV) like the Nigerian Mining Corporation (NMC), will go a long way to entirely regulate and sanitize the sector, and act as a government face with multinationals, engage in joint venture agreements, so that all Nigerians will have a stake in all of the ventures that go on in that sector. That is the role the corporation is going to play, and it is going to be seriously sanitized with efficient governance structures.”

The government has suggested creating a task force to stop illicit mining operations carried out by Nigerians and foreigners in an effort to restore order to the mining industry in the nation. Official reports say, the key objectives include: enhancing security in mining areas; enforcing mining laws; ensuring proper warehousing and monitoring of explosives; and advancing environmental sustainability in mining operations.

Read Also: President Tinubu Charts Bold Course for Nigeria’s Future in 2024

Technology and big data usage

There are many industries that require detailed knowledge of geography, geology or spatial measurements, but few businesses have quite the same intimate relationship with the surrounding landscape – above and below the surface – as mining. GIS technology, and digital data in general, has become increasingly central to the industry over the years, as it reduces risks by tracking geographic variables that might otherwise have been missed. GIS is now commonly used in almost all aspects of mining, from initial exploration to geological analysis, production, sustainability and regulatory compliance.

According to Tomori,”Generating the requisite geological data on critical minerals is at the heart of the Alake-plan, and work has started in that regard. On the heels of the recent visit of German Chancellor, Olaf Scholz to Nigeria, the Solid Minerals Development Fund (SMDF), an agency under the Ministry of Solid Minerals Development signed a Memorandum of Understanding (MOU) with German firm, GeoScan GmbN for exploration of vast mineral deposits worth over $700bn, scattered across the country.

The German firm will be deploying cutting-edge proprietary technology at no cost to Nigeria, capable of exploring mineral deposits up to 10,000 meters below the surface of the earth. This exploration pact will assist in generating geo-data on priority solid minerals and ultimately lead to the development of mineral resources essential for the production of electric vehicles, batteries, and advanced technological equipment.’’

Free mining training partnership with Australia’s Ministry of Mining

Mining has long been a cornerstone of the Australian economy. The gold rushes in 1850s were pivotal in the early development of the country. Today, it remains one of the country’s most well-established sectors. It is a major contributor to Australia’s economy, accounting for around 13.6% of total GDP in 2023. Meanwhile, Nigeria’s Ministry of Solid Minerals has announced a free mining training deal it entered into with Australia’s Ministry of Mining.

The Minister stated: “I am delighted to announce that a deal has been reached between the Ministry of Solid Minerals and the Australian Minister for Mines and Petroleum, Energy, Corrective Services, and Industrial Relations, Hon. Bill Johnston. “The deal involves sending Nigerian mining professionals to Western Australia to study modern mining technology and practices for free.”

“Australia has a wealth of knowledge and skills in developing its modern mining industry. Through this initiative, Nigerian miners will benefit from training, study trips, and exchanges of mineral professionals as Nigeria aims to transform the sector.

“I am personally delighted about this collaboration as it will lead to attracting FDI forming a solid mineral corporation and enabling the sector to compete globally. It is an exciting time for Nigerian mining professionals, and we cannot wait to see the impact of this new knowledge and skill transfer on the sector.”

Recovering overdue royalties

The Nigerian government has declared that it is being owed trillions of naira in unpaid royalties and taxes by legalised operators in the mining industry. Meanwhile, the government had put in place measures to engage consultants to block the leakages and recover funds.

Dr Dele Alake said, “From our efforts, so far, we have discovered to our chagrin that we are owed trillions of naira in unpaid royalties and taxes by legalised operators.” “We are committed to recovering these funds and also in the process of engaging internationally certified auditors to look at the system and automate the whole gamut of the revenue collection processes,” he continued.

Creation of new solid minerals company

The Nigerian government intends to form a new Nigerian Solid Minerals Corporation and will own about 25% of the N1 billion share capital corporation. The process of creating the legislation for the institution has begun, official reports indicated. While the Nigerian citizens will by public shares hold 25% and private investors can acquire up to 10% of the remaining shares.

The Minister said: “Central to our efforts to reposition the sector is the establishment of a private-sector driven, Nigerian Solid Minerals Corporation. This is as the minister noted that the process of creating the legislation for the institution has begun. On February 12 and 13, 2024, the Solid Minerals Committee of the House of Representatives will hold the first policy dialogue on the proposed law to create the corporation.

“In working with the legislature to establish the legal and legitimate foundation for the institution, our resolve to ensure that a share structure in line with a private sector- led strategy in which the Federal Government will hold not more than 25 per cent, the Nigerian citizens will, by public shares hold 25 per cent and private investors, each with a maximum of 10 per cent of the shares of the N1billion share capital, will be achieved.”

Approval of 499 licences for buying, selling of solid minerals

In addition, at notable trend observed was the high demand for lithium, with 146 of the licences being allocated for its trade, surpassing other minerals such as gold (91 licenses), tin (46), and coal (32). The list also included tantalite, iron ore, kaolin, feldspar, beryl, barite, columbite, mica, and aquamarine licenses.

Alake said: “The Ministry continues to facilitate the processing of applications for permits to refine minerals and to process and purchase. Last year, no fewer than 499 licenses were granted to applicants involved in the business of purchasing and sales of minerals.

“Predictably, applications for the purchase and sale of Lithium topped the list with 146 licences, followed by Gold, 91; Tin, 46 and Coal, 32. Other minerals for which licences were granted include Tantalite, Iron Ore, Kaolin, Feldspar, Beryl, baryte, Columbite, Mica and Aquamarine.”

Engagement of host communities for development

Collaborative efforts with local communities can help address some challenges in the sector. Dele Alake, minister of solid minerals development, has said the consent of host communities remains a prerequisite for obtaining mining licences in Nigeria and those miners that fail to abide by such rules risk losing their licences. According to Alake, the ministry launched the community development agreement (CDA) initiative to promote the welfare of host communities by ensuring that mining companies carry out development and social responsibility for the betterment of the communities, a requirement that would help tackle some of the teething challenges in the sector and unlock its huge potential.

Alake said further: “Last year, I launched the revised requirements for Community Development Agreements. It was the appropriate forum to appeal to holders of mining licences to ensure that they negotiate with the communities in their mining areas and sign the agreements which ensure that the communities benefit from the wealth created by their commonwealth.

“I wish to note, with dismay, that only 18 companies signed CDAs with their communities last year. We hope to enforce the implementation of the revised guidelines in the new year and those found wanting will face stiff penalties.”

With the right policies, investments, and responsible practices, Nigeria can harness its mineral wealth for sustainable development and prosperity. Experts say, “It is therefore no gainsaying that whilst the Sector’s performance is improving, more effort is required to set the Sector on a steady growth path and to earn Nigeria a prominent place on the global mining map.” “To achieve the ambitious target of 3% by 2025, as outlined in the mining roadmap, a lot more commitment from key stakeholders, especially government, is required.”

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