Is Solid Minerals Next Resource Curse for Nigeria?

As Nigeria turns to solid minerals in search of economic diversification, a critical question looms: could this promising sector become the country’s next resource curse? With haunting echoes of the oil industry’s legacy—marked by corruption, mismanagement, and environmental damage—Sunday Ehigiator writes on whether the same patterns are beginning to emerge. In this report, he explores the risks, warning signs, and what must be done to avoid repeating history.

Nigeria, a country richly endowed with natural resources, has long been plagued by the paradox of plenty. Despite its vast oil reserves, the country has struggled to translate this wealth into sustainable economic growth and development. Instead, the oil industry has been marred by corruption, mismanagement, and environmental degradation.

The Risk of Resource Curse

As Nigeria seeks to develop its solid minerals sector, there is a growing risk that the country may fall victim to the resource curse again. The resource curse refers to the phenomenon where countries with an abundance of natural resources experience poor economic growth, corruption, and conflict.

Nigeria’s experience with oil has shown that an over-reliance on natural resources can lead to corruption, mismanagement, and environmental degradation. The country’s oil industry has been marred by corruption, with billions of dollars in revenue lost to graft and mismanagement.

As the country develops its solid minerals sector, there is a risk that the same mistakes will be repeated. The sector is already linked to corruption and mismanagement, and there are concerns that the government is not doing enough to address these issues.

The Promise of Solid Minerals

Nigeria’s solid minerals sector is vast and diverse, with deposits of limestone, iron ore, coal, tin, and gold scattered across the country. The sector has the potential to contribute significantly to the country’s GDP, create jobs, and stimulate economic growth.

According to the Nigerian Ministry of Mines and Steel Development, the solid minerals sector has the potential to generate over $20 billion in annual revenue, create 10 million jobs, and contribute up to 10 per cent to the country’s GDP.

However, Nigeria must learn from the mistakes of the ‘oil boom era’, which left many host communities impoverished and uninhabitable due to the reckless practices of oil companies.

Concerns

The recent condemnation of the illegal operations by mining companies, particularly the Chinese-owned ones in the country, by the House of Representatives Committee on Solid Minerals has re-echoed the alarm that civil society groups have been raising on the growing disregard for Nigerian laws by mining companies.

Inundated by petitions from a host of communities where mining operations are ongoing, the Committee, led by Hon. Jonathan Gaza, Chairman House Committee on Solid Minerals Development, had in May decided to probe illegal and unregulated mining practices.

But disturbingly, managing directors of many of the said companies failed to turn up, and many were found to be outside the country.

Hon. Gaza, who criticised the absence of the companies at the meeting, said recent site inspections revealed troubling environmental practices and a general disregard for the well-being of host communities.

But the failure of the firms to turn up for the Parliamentary meeting reveals a disturbing choreographed pattern of impunity by mining firms owned by Chinese nationals.

Antecedents of Impunity

A similar scenario played out in December 2024 when the Nasarawa State House of Assembly Committee on the Environment summoned a Chinese mining firm for a meeting following petitions by the Renevlyn Development Initiative (RDI) and other civil society groups over alleged mining pollution and other unsound practices in the Awe Local Government Area of the state. It took nearly two months to get the company’s head to honour their summons.

Some of the companies listed by the Gaza‘s committee include Arab Contractors, Selsing Stone Limited, Homerset, Kaji Investments, ZeyinJinja Investment Limited, Hasba Group of Companies, Viva Mines, Venus Mining Company, Tim Cornerstone, and Inorganic Earth (Saigon’s Investment Limited).

The widespread failure of mining companies to meet regulatory benchmarks, including valid environmental and social impact assessments, community development agreements (CDAs), and environmental protection plans, has become a recurring theme in mining host communities.

 Reports on Human Rights Violations

A report by the Community Development Advocacy Foundation (CODAF) last week exposed the same egregious human rights violations and environmental degradation of host communities by Chinese and indigenous mining companies in Ebonyi State.

The report, which concerns Ezillo and Ikwo Communities, described the situation as “an environmental time bomb” and showed that Chinese firms operating in the identified communities did not carry out environmental audits or proper ESIA before mining activities.

In the communities, there was massive land degradation, pollution, and destruction of livelihoods; Discriminatory compensation schemes benefiting local elites; Use of military/police to suppress dissent; and Loss of youth and skilled population due to economic collapse.

While it is not a disputable fact that Nigeria is blessed with huge mineral deposits, local communities will not benefit from their natural endowment if nothing is done to check the menace of mostly Chinese mining firms. Reports continue to expose illegal activities perpetrated by their nationals, including the export of rare earth minerals like lithium and gold without due process. In their quest for these minerals, they flout the nation’s laws, ransack communities with impunity and leave them in ruins.

Other Challenges

One of the major challenges facing the sector is the lack of effective regulation and oversight. The sector is currently governed by a patchwork of laws and regulations, which has created confusion and uncertainty among investors.

Furthermore, there have been troubling accusations of the government granting mining licenses to companies without proper due diligence, leading to environmental degradation and the displacement of local communities.

Another major challenge facing the sector is the lack of infrastructure. Many of the country’s mineral deposits are located in remote areas, making it difficult and expensive to transport the minerals to markets.

Way Forward

As host communities across the country wake up to the realisation that their lives and economic fate are at stake, the relevant government ministries and agencies must be alive to their duties of checking the invasion of Nigeria’s solid minerals sector to avoid another oil curse in the sector.

The House Committee, led by Hon. Gaza, must go beyond talk by coordinating with the Ministry of Solid Minerals and agencies like the Nigeria Security and Civil Defence Corps (NSCDC) and the Nigeria Police to expedite action against errant firms.

The companies must be asked to produce detailed environmental and social documentation as explicitly recommended in Section 116 of the Nigerian Minerals and Mining Act.

They must show their Environmental Protection and Rehabilitation Programme (EPRP) and annual reclamation statements, which are documents that must have been in place before commencing operations.

Chapter 3 of the revised guideline also mandates thorough engagement with host and affected communities, including consultations with local leaders and agreements on development projects ranging from roads to educational infrastructure.

The choreographed failure by mining firms to honour summons whenever they are asked to produce the stipulated documents and plans must be treated as economic sabotage, and appropriate penalties meted out on them.

This is the only step that will bring sanity to the solid minerals sector if we must avoid another resource curse.

Also, the government must establish a clear and effective regulatory framework for the sector. This will help to reduce corruption and ensure that mining companies operate responsibly and sustainably.

Also, the government must ensure that local communities benefit from the development of the solid minerals sector. This can be achieved through the establishment of community development funds, which can be used to support local economic development projects.

Finally, the government must ensure that the sector is transparent and accountable. This can be achieved through the establishment of a publicly accessible database of mining licenses and revenues.

Only by taking these steps can Nigeria ensure that its solid minerals sector contributes to sustainable economic growth and development, rather than perpetuating the resource curse.