•Fayemi
First, the news of the discovery of nickel in an unusual large quantity and fine quality in Dangoma, a village in Kaduna State, Nigeria, by an Australian mining company, Comet Minerals, had just filtered into the global mining market a few days to the commencement of the conference.
Expectedly, the news created some measures of excitement and renewed interest by international investors, operators and geoscientists about Nigeria’s rich minerals deposits.
The second reason was that Nigeria’s mining sector has always been in the news for the right reasons since the beginning of the year when the diversification plan of the President Muhammadu Buhari administration took off with the Ministry of Mines and Steel Development driving the mining sector to actualise the job creation and revenue boosting tasks.
The third reason was that the minister of Mines and Steel Development, Dr Kayode Fayemi, was billed to make a presentation on the investment opportunities in the country’s mining sector to the august gathering and also make an official confirmation of the nickel discovery, which many in the international mining community considered the game changer.
And for the four days the event lasted, Nigeria rode high-seen majorly as the place where the next big thing is happening.
So, when the Minister mounted the podium to confirm the nickel discovery and also went a step further to state the Federal Government’s offer of a three-year tax holiday for investors as well as duty free on importation of mining equipment, not a few of the participants admitted that the Buhari administration was serious on its diversification plan.
About four foreign mining companies with significant investments in Nigeria, including Kogi Iron Limited, Comet Resources and Symbol Base Metals testified to the remarkable improvement in the conduct of business in the country’s mining sector at the conference. This further deepened investors’ interest in the country.
A further confirmation of Nigeria’s seriousness to really push through with the reforms in the mining sector was when he Executive Council of the Federation (EXCOF) ratified the presidential approval for the activation of the mining sector component of the National Resource Funds and okayed the immediate release of N30billion intervention fund to affirm its commitment.
Industry watchers see this as a major step in the right direction that is capable of providing the right incentives to serious operators. They also applauded Dr Fayemi’s position that the bulk of the money would go into geological prospectivity to further ascertain the extent of mineral assets in the country.
While it is true that things had really gone bad in the Nigerian mining sector over the years with the neglect of the sector by successive administrations, the renewed vigour with which the current administration and leadership of the ministry are pursuing its reinvigoration has restored hope that realising the vision of making Nigeria move from a mineral-rich nation to a mining nation is a destination that is within reach.
The current leadership has been able to get the buying in of renowned mining nations to provide technical partnership in some critical areas, while also encouraging local players to up their game. Aside working out equipment leasing for local operators, it is also working out an arrangement to ensure that informal or artisanal miners get better organised to contribute optimally to the sector , while operating in line with laid down environmental standards.
Added to this is the attraction that the sector now enjoys such that a crop of young and educated miners are springing up, armed with youthful energy, education and a good grasp of the policy direction of the government, ready to make a living through the mines. Needless to say that this crop of young and forward -looking miners derive their boldness from two major factors: the improvement in the ease of doing business and the regulatory framework which protect their investments and position them for greater opportunities in the sector.
Although no one can deny the fact that the country has very good mining laws. The Nigerian Minerals and Mining Act of 2007 and its provisions take care of so many aspects of mining investment and operations. However, what has remained the bane of mining in Nigeria is the enforcement of these laws. The effective implementation of these legal provisions by the current leadership of the Ministry in the last one year is what makes the difference and has positioned the sector as a major force to reckon with in the country’s journey towards economic recovery.
Upon resumption of duties on November 12th, 2015, Dr Fayemi, together with the Minister of State for the Ministry, Hon Abubakar Bawa Bwari, had left no one in doubt as to their abilities to actualise the mandate given to them to turn the sector around for optimal goal, through thorough planning, transparency and the right regulatory framework. Under their watch, the ministry has continued to grow in leaps and bounds, with attendant increase in revenue generation and greater sanity in the sector.
The first major step taken was to apply the “use or lose” clause in the Nigerian Minerals and Mining Act 2007, by publishing the list of dormant mining licence with a deadline for revalidation of such. At the end of the exercise, many of the dormant licences were revoked while many rushed to revalidate theirs with the payment of appropriate fees which also shored up the revenue from the ministry.
Also, the ministry, through collaboration with relevant security agencies took the issue of security of mines a step further. The collaboration has led to better security surveillance of mines and has helped to check some nefarious activities.
The ministry also worked out a strategic partnership arrangement with the states, which encourages the states to also take advantage of mineral deposits in their states without violating any of the existing laws. Like the Minister would say, there cannot be any meaningful mining without the active involvement of the states. The excitement generated by the state government, helps in no small way to resolve the age-long acrimony as to who owns what and where. As the state reserves the right over land administration, while the Federal Government is constitutionally empowered to manage mineral wealth found on the land.
The mining roadmap designed by the ministry and approved by the Executive Council of the Federation has also helped in the upward movement of the sector. If dutifully implemented, the roadmap remains a sure guide to growth in the sector. One major highpoint of the roadmap is the establishment of a regulatory body that would oversee and regulate activities in the sector. The roadmap also spells out several other arrangements that would boost the sector. This includes the plan to coordinate informal miners that have hitherto constituted a menace to the industry.
Fayemi spells out the ministry’s planned growth trajectory in three phases: According to him, “Phase 1, in the immediate term, we are achieving import substitution by winning over domestic users of industrial minerals. “Phase 2, our focus is on further expanding our domestic ore and mineral assets processing capacity. Phase 3, we will return stronger to the global ore and minerals markets at a market competitive price point.”
With a clearly defined destination and a well articulated roadmap that would drive the process, there remains one major river to cross. The country still has a weak mechanisms for gathering, disseminating and archiving critical geological data required by investors and policy makers. It is believed that insufficient data has created opaqueness about Nigerian mining which needs to be addressed. Tackling this hydra -headed monster of insufficient data remains a critical enabler of success. As succinctly put by the Minister, Nigeria needs to know what it has and in what grades and quantities in order to plan more effectively.
And if the goal of returning the sector to its glorious days and repositioning it to contribute between 5% – 7% over the next 10 – 15 years, is to be achieved, then the data must be put in place even as more of government and private sector funding are still needed. Although many naysayers would readily predict that the current path being taken would soon be jettisoned as soon as the oil prices pick up at the international market.
That may not be possible with the foundation that is currently being laid by the leadership of the sector with the attendant impressive growth in revenue already being recorded. The effective implementation of the roadmap and other legal and regulatory frameworks as well as the structure that would be built in the coming year, are sure signs that the earth would work for the country, this time around.
Olayinka Oyebode
*Oyebode is Special Assistant on Media to the Minister
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