With the slump in oil prices and a more compelling need to diversify the nation’s revenue base, the spotlight has shifted to the mining sector. Ndubuisi Francis reports on the just-concluded Nigeria Mining Week
For decades, there has been what can best be described as motion without movement vis-à-vis successive administrations’ sloganeering to develop the solid minerals sector.
Even when there has been a rather lethargic demonstration of the required political will to accord the desperately needed attention to the sector, the incontrovertible fact remains that it holds the ace to unlocking the nation’s latent technological potential.
However, the downturn in the nation’s economy has elicited fresh impetus on the desirability of taking the mining sector to the front burner.
The mining sector roadmap has been developed and the Minister of Solid Minerals Development, Dr. Kayode Fayemi, recently affirmed that the roadmap would catapult Nigeria from a mineral-rich nation to a mineral mining and processing country, adding that by 2025, the sector could be adding up to $27 billion to Nigeria’s gross domestic product (GDP) by 2025.
There has also been a conscious effort to bring countries with rich mining pedigree into the mix through partnerships to develop the sector.
The minister recently declared that the federal government would understudy the Australian mining sector in a bid to reposition Nigeria’s solid minerals sector.
The federal government is also currently negotiating a $500 million investment fund with the Nigerian Sovereign Investment Authority (NSIA), managers of Nigeria’s Sovereign Wealth Fund (SWF), to support a long-term development plan for the country’s mining sector.
Under the present administration, there seems to be an integrated approach to develop the mining sector in terms of stakeholder participation and packaging.
The Federal Executive Council (FEC) had also recently approved a N30 billion intervention fund for mining exploration in the country.
In collaboration with PwC Nigeria and Spintelligent, the Miners Association of Nigeria has just concluded the inaugural Nigeria Mining Week in Abuja, which drew participation from within and outside Nigeria, including representatives of frontline mining nations in Africa and beyond.
The Nigeria Mining Week held alongside the second edition of the iPAD Nigeria Mining & Quarrying Forum.
The expectation of organisers of the Mining Week is that it will grow into an international event as it actually provided an all-encompassing melting pot for the mining sector, and comprised a grand opening, strategic conference, technology and services showcase, various workshops for artisanal and small scale miners, capped with a grand closing ceremony.
Hosted by the Ministry of Mines and Steel Development, the mining week in deed assembled the entire mining ecosystem comprising artisanal and small-scale miners, junior mining operators, exploration companies, local and international investors, financial institutions, traders, solution providers as well as government bodies, to dissect the current state of the mining sector.
Speaking at the event, Fayemi stated that the mining sector would provide over 300,000 jobs and millions of indirect employment for Nigerians be-fore the end of the year.
Represented by the Minister of State, Bawa Bwari, Fayemi noted that “in mining sector, our guiding principle is to re-position the sector to achieve our mandate of increasing contribution to Gross Domestic Product, GDP and deliver shared prosperity to stakeholders.”
The mining road¬map, he said, would provide a pathway for sustainable turnaround and growth of mining and met¬al sectors over the short, me odium and long-term, adding that the conference would ad¬dress some of the priority areas of the document.
“Yes, there are quick wins in the industry which we have already started achieving. The debate continues on how we missed the opportunities in the past to leverage the vast resources to industrialise and become a great nation.
“We have since 1999 begun to find our way out of the woods and the sector is wit¬nessing some positive develop-ment and we are building on the efforts already established by ministerial predecessor’s.” the minister said.
According to him, government as an adminis¬trator-regulator, in partnership with the private sector would em¬bark on the reforms of extant legislations supporting body of regulation designed to give Nigeria a com¬petitive legal framework for the sector.
To rejig the sector, he said key challenges constituting roadblocks on its significant contribution to GDP had been identified with strategies and time¬lines to tackle them outlined.
Arrangements, Fayemi disclosed, are being concluded to sign a Memorandum of Under¬standing (MoU) between the Ni-geria Geological Survey Agen¬cy and its Chinese counterpart on a geosciences data genera¬tion programme.
“This is in addition to the for-malisation and extension ser¬vices being rendered by Arti¬sanal and Small Scale Mining Department of the Ministry for the purpose of making artisanal operations safer and sustainable in the country.”
The Managing Partner & Head of En-ergy and Infrastructure Group, Advocaat Law Practice and panellist in the iPAD Nigeria Mining & Quarrying Forum, Mr. Ola Alokolaro, in his contribution, stated that there are 34 identified miner¬als that can both be used dras¬tically in the construction sec¬tor and exported to earn the much needed foreign exchange.
“We need to look at quick win mining projects to showcase Nigeria as a mining destination. The forum must build on its success of last year to ensure the mining sector and the opportunities abound and remain in everyone’s consciousness,” he said.
He, however expressed the regret that lack of road and rail infrastructure constituted a hindrance to the mining sector.
In his opening remarks, Partner and Africa Assurance Leader, PwC Nigeria, Mr. Tola Ogundipe, who chaired the leaders’ panel of iPAD Nigeria Mining & Quarrying Forum, noted that PwC had in the last couple of years been in the vanguard of launching the nation’s mining sector into reckoning with a view to making it assume its prime place.
He noted that the expectations were that with the focus and commitment being channeled into the sector, the benefits would start kicking in in no distant time, and enjoined other stakeholders to remember PwC when the good times come.
On the theme of the panel discussion, “Towards a New Paradigm in Natural Resource Management,”Ogundipe noted that it was apt and spoke to the issue, noting that Nigeria was confronted by very serious economic headwinds, exacerbated by foreign exchange problems.
He argued that there was the need for import substitution to bridge the gap between what can be sourced locally and what is imported.
According to him the forex conundrum was thrown up by the nation’s import dependency situation, adding that while there seems to be a consensus on what the challenges are, “may be, what we disagree on is how we got here.”
Ogundipe stated that most people believe that a quick diversification of the economy was a desideratum, listing some sectors that hold the much-needed promise on diversification as mining, ICT, agriculture, and tourism, among others.
He pointed out that the significance and role of the mining sector in a period of recession cannot be over-emphasised, lamenting that in spite of the sector’s huge potential, it accounts for less than a paltry one per cent of Nigeria’s GDP.
Ogundipe stressed that the time had come for the mining sector to take its pride of place, but admonished that focus should be on how to prioritise resource allocation in order to achieve results at the shortest possible time.
Prioritisation of resources, leveraging on technology and other factors will get the mining sector and the nation where they should be, he added.
The Director, Mines Inspectorate, Ministry of Solid Minerals Development, Engr. Awojobi, who represented the minister, Kayode Fayemi, at the forum, noted that geological information
was necessary for planning.
He disclosed that a memorandum of understanding had been signed with Australia and South Africa, to develop the human capital for Nigeria’s mining sector.
Awojobi, who equally spoke on plans to make the sector contribute 5 per cent to GDP by 2020, also hinted that a solid minerals development fund was being mulled to assist investors, adding that local industry growth through value addition was imperative as the case of Botswana depicts.
Providing perspectives on the South African mining experience, the King of the Royal Bofokeng Nation, Kgosi Leruo Molotiegi, whose 150,000- people strong community hosts one of the largest platinum deposits in the world, disclosed that a royalty of $77 million was paid to the community in 2010.
According to him, his community presents a valid example of community participation in mining, adding that mining is not sustainable as communities seek sustainability.
In an interview with THISDAY, Partner, International Tax Services, PwC Nigeria, Esiri Agbeyi stated that his company was very much involved in the development of the mining sector roadmap and had been very active in the extractive industry over the years.
She listed the areas of PwC’s involvement as structuring of deals as well as providing advisory services, and fiscal regime of the sector, among others.
Also in an interview, Senior Partner, Energy and Head, Mining Industry Business Development Utilities, PwC Nigeria, Mr. Habeeb Jaiyeola noted that his company had in the past three years played an active role in hosting the mining fora.
He stated that although the mining sector is not where it should be currently as the necessary enabling environment is not in place, there was hope that government’s strides would yield positive result in no distant time.
He listed some of the challenges of the mining sector as absence of a reliable data on mining
stock, infrastructure deficit, and the issue of local requirements (community support).
Others are the impediments created by fiscal and regulatory frameworks which are already obsolete.
Also in the mix of challenges are bureaucratic bottlenecks around ease of applying and collecting mining licences. This is occasioned by the fact that only the Mining Cadastal Office in Abuja serves the entire country vis-à-vis issuance of mining licences.
Many believe that besides known challenges, knowledge about Nigeria’s mining potential is very sketchy, and therefore the need to aggressively pursue the objective of showcasing what the nation can offer the world thereby growing the local economy in the process.
This appears to be one of the objectives of PwC Nigeria and the other organisers of the Nigeria Mining Week.
But there is no doubting the fact that adversity brings out the best in man. With recession bearing its fang, the government appears more determined to diversifiy the economy and the most likely sector to look to is mining.
The President, Miners Association of Nigeria, Alhaji Sani Shehu captured it this way:
“The industry should know that with the renewed Government interest in mining development in Nigeria and the incentives such as tax holidays, removal of export duty for mining equipment and readiness of indigenous operators to partner with foreign investors, Nigeria is now a re-emerging mining nation worth exploring.”