Still on the Solid Minerals Sector

By Okey Ikechukwu

When, last week, Senator Adams Oshiomole bombed the National Assembly with bold and well publicized claims about who was looting the nation’s mineral resources, I realized that it was time to take up the next leg of my planned series of conversations about the solid minerals sector and its likely impact on the economic future and fortunes of the Nigerian State. For the record, there are three major factors that kindled, and are likely to sustain, any conversations one wishes to hold here about the solid minerals sector in Nigeria.

The first is that the sector is one of the quickest routes to alternative, high-volume national earnings in foreign currency; once it is very well managed. The second is that the new measures being put in place to revamp the sector are coming on well. The third, and very significantly, is the need to deal with the frequently re-echoed claims about the plundering of the nation’s solid mineral output by a cartel of powerful individuals. This last point puts new pressures on the government of the day, to deal with the matter once and for all.

Regarding the first point, it is fairly obvious that solid minerals hold great prospects for increased forex earnings and that, notwithstanding the potentials of Agriculture as a strong competitor, our current security challenges diminish the capacity of the agricultural sector to make the needed impact. The needed comprehensive development, strategic regulation and holistic management of the mining sector is the only way of putting its actual capacities for impact on national earnings, job creation and overall increase in national productivity on the table.

Two related events occurred last week, in connection with the sector. The first was the aforementioned Bombshell of Oshiomole, wherein he claimed that there were two distinct laws guiding solid mineral exploitation in Nigeria, among other allegations. The second was the securing of a UN agency study facility for critical minerals in Nigeria.

The first point, that Oshiomole’s intervention, is not a new claim or story. There were also some (hushed) and even more elaborate details when some of us went on study tour, to look at the economic potentials of the Zamfara State during governor Yari’s tenure. Oshiomole only voiced a subsisting perception, and claim, that is at least 30 years old.

It is not a matter that I would like to dwell upon at the moment, because it is probably best to take it together with the twin economic sins of oil bunkering and illegal refineries. They are northern and southern equivalents of the same elite-facilitated malfeasance and would be taken together some other time for full treatment.

Concerning illegal refineries, a perfunctory check will show you that the Federal Government has destroyed at least 300 illegal refineries in the last ten years alone. Why? What is the total land area of the entire South South, that it should house so many refineries? Why did the number of illegal refineries drop close to zero in Rivers State, when then Governor Wike threatened to sack every Local Government Chairman in whose domain an illegal refinery was found? This was addressed on this page on January 2022, under the title, “Governors, Just Look at Wike”. 

As for the securing of a UN agency study facility for critical minerals in Nigeria, the point to note here is that this will help the sector, through the development of a roadmap on Nigeria’s critical value chain from extraction to beneficiation. It is to be funded by the Global Council for Critical Minerals, as one of many low hanging fruits secured for the sector in recent times.

The study, which will examine the country’s critical minerals resource/reserve and set international best practices for value development, will be carried out by UC Davis and supported by Core International. The point to note here is that we are likely to walk away with the cheery news of both the upgrading and upscaling of actionable information on what the sector has to offer to the nation and the world.

This brings us to the submission we made about this sector here a few weeks ago. That was shortly after the ban on solid minerals exploration and exploitation in Zamfara state was lifted by the federal Government. The lifting of the ban came after more than five years of zero mining and exploration activities. A “no fly and no go” zone was also imposed on the area, with miners, mining sites and environs grounded since 2019. The ban was predicated on the perceived security and humanitarian concerns of the Buhari government, as the entire Zamfara axis boiled over continuously during the period.

One fact was clear before and after the ban was lifted: The activities of illegal miners, bandits and other miscreants continued unchallenged. It even got much worse. What was initially conceived as a temporary solution to an obviously big problem thus took on a life of its own. As was stated in the article, titled “Alake and Matters Arising in the Mining sector”, the lifting of the ban was “apparently based on new, intelligence-driven, and better-coordinated, security operations that led to the progressive and visible elimination of major leaders of criminal gangs and leaders of bandit groups”.

It was in the national interest to lift the ban, because of the expected and obvious gains to be derived from a reactivation of mining, and related, activities in the Zamfara axis. That the nation has now secured a UN agency study facility for critical minerals in Nigeria is because there is a mining sector to talk about. It would not have happened if the initial step of lifting the ban on mining activities did not take place.

The question of development of a roadmap on Nigeria’s critical value chain, from extraction to beneficiation, would not have arisen if the mining sites were still shut down. Nor would there have been any talk about the funding of such an endeavour by the Global Council for Critical Minerals, but for the lifting of that ban.

The UN agency study that is now poised to examine the country’s critical mineral resources and reserves, in order to recalibrate for the better and more sustainable international best practices for value development, will be carried out by UC Davis and supported by Core International. The point to note here is that we are looking at both the upgrading and upscaling of actionable information on what the sector has to offer. It means that there is a mining sector that is worthy of such attention right now.

Going back to what was said here back then: “While the ban lasted, the miners who were officially and formally granted lease by the mining cadastral office to carry out mining activities had to hands off, and stay off, the area. While these duly recognized miners were held in abeyance by the ban and the law, the space they left unmanned was taken over by non-state actors like bandits and illegal miners. The proceeds of these questionable mining activities were going into the pockets of individuals, especially bandits. Marauders and sundry socially disruptive stakeholders were also the beneficiaries.

The massive quantities of gold, lithium, copper and other associated minerals in the state were thus being mined during the period of the ban, but not in the interest of the nation or its treasury. The positive security mileage that would have come from the ban, as well as the good intentions behind it, were nowhere to be seen. Instead, the ban unintentionally opened the space for unlawful activities that worsened the security problems in the area”.

The Presidential Artisanal Gold Miners Initiative (PAGMI) under president Buhari, which was designed to bring the unlicensed fringe actors in the sector within a regulated umbrella, did not successfully block the obvious revenue and resource leakages. The renaming of illegal miners, as well as the setting up of a presidential initiative to make the best of them, did not still bring most of them within the Standard Regulatory Environment (SRE) and framework established for the sector.

We called for a review of PAGMI last year, demanding timelines for the full integration and streamlining of all miners. This must be realized quickly or industry cohesion. Yes, mining activities are back in Zamfara with a security tax force, known as the Mine Police or Mining Marshal Police. But more still needs to be done, so that the expected improvements in government revenue materializes in real terms and with minimal hiccups.

It is obvious that the UN agency intervention keys into the spirit of the recent Memorandum of Understanding (MOU) Nigeria signed with France on training and capacity building for mining professionals. Such further technical and financial capacity support can only lead to the further development of the sector.

This backs up the point made here in the aforementioned article, thus: “Ours is a nation endowed with substantial solid, liquid and gaseous mineral deposits, for which extant internal capacities are not enough. It is only through clear-eyed technical partnerships, technological support, security of the operating environment and reforms and guaranteed regulatory compliance that the sector can be taken to greater heights”.

As the ministry is fleshing out the full capacities of the mining sector again, after a season of partly ill-advised hibernation under Buhari, it should be taken to new levels of impact.  All the talk about increased revenue and economic diversification of the Nigerian economy will be nothing but smoke, for as long as we do not do the needful in a holistic manner. The policies, the partnerships, the funding and international collaborations are needed to get us to where we ought to be in the mining sector.

To make the best of the UN agency intervention, which is coming after the MOU with the French, we must have the following, as was observed here before:| “(1) Availability and accessibility of high-quality geological data. (2) Popularization of the National Integrated Mineral Exploration Project (NIMEP). (3) Improvements in critical infrastructure. (4) The leveraging of Public Private Partnerships (PPPs). (5) Review of existing incentives frameworks. (6) Disaggregating and evaluating fiscal and non-fiscal incentives to ascertain to what extent they are competitive and aligned with investor expectations and global industry practices”.

In sum, this is the sector to look at for much more than forex earnings; while agriculture is recovering from years of merciless denudation.