NEITI: China, Spain Leading Destinations of Solid Minerals from Nigeria

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Large portions of solid minerals mined from states across Nigeria in 2016, were exported free-on-board (FOB) to China, Spain, India, United Arab Emirates (UAE) and Thailand, an audit report on the operations of the sector recently released by the Nigeria Extractive Industries Transparency Initiatives (NEITI) has shown.

The report which put the financial value of the minerals exported to these countries and some others at $40,934,053, explained that despite Nigeria’s abundant deposit of solid minerals, the sector was only able to provide jobs for 0.3 per cent of the country’s population.

It equally indicated the sector’s contribution to national Gross Domestic Product (GDP) at the period was a paltry 0.13 per cent.
According to the report, China was the top the export destination with minerals valued at $21,951,529 sold to the country, while $10,838,958 worth of minerals was sold to Spain.

In addition, India, UAE and Thailand received minerals worth $, 641,450, $1,561,600 and $760,301, that were exported from Nigeria in the year under review.

The report noted that the total solid minerals mined in 2016 and upon which royalty was paid amounted to 41,874,611.02 tons, adding that production was accounted for on the basis of minerals consumed or sold with 56 covered extractive entities that met the materiality threshold accounting for 92 per cent of the total production while the remaining 595 companies below materiality threshold accounted for the balance of eight per cent.

“According to Nigeria’s Mining and Metal Sector Investment Promotion Brochure (October 2017 edition) the solid minerals sector is currently contributing 0.3 per cent to national employment,” said the report which indicated that just about 10,908 were employed by the sector within the period.
It added that: “The government collected the sum of N43.22 billion from solid minerals sector in 2016. This represents 0.76 per cent of the total revenue of N5.68 trillion collected by government in 2016.

“Nigeria’s GDP in 2016 was N67.98 trillion, the economy having suffered a contraction of -1.51 per cent during the year. The contribution of the solid minerals sector to GDP in 2016 was N87.61 billion representing 0.13 per cent of total GDP.”

Highlighting operational infractions that were documented in the audit, NEITI stated that none of the covered entities showed evidence they obeyed the country’s law against degradation and abuse of the environment of their mining jurisdictions and made contributions to the Environmental Protection and Rehabilitation Fund because the government appeared not to have established the fund.

The Nigerian Minerals and Mining Act 2007, which was passed into law on March 16, 2007 to repeal the Minerals and Mining Act, No. 34 of 1999 for the purposes of regulating the exploration and exploitation of solid materials in Nigeria, provided for the establishment of an ‘Environmental Protection and Rehabilitation Fund’ for the purpose of guaranteeing the environmental obligations of holders of mineral titles.

But NEITI’s audit stated: “We noticed that none of the extractive entities showed any evidence of contributions to the Environmental Protection and Rehabilitation Fund in accordance with Section 121(4) of the Minerals and Mining Act, 2007.

“The government (MMSD) should facilitate the establishment of the Environmental Protection and Rehabilitation Fund so that mineral title holders meet their environmental obligations.”

It also added: “None of the operators visited provided the audit team with records of accidents, dangerous occurrences and diseases as required by Section 140 of the Mining Regulations 2011. The Mines Inspectorate Department (MID) should compel operators to comply with the provisions of the law.”