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Business Headline News Nigeria Special Report

Unlocking Potentials in the Mining Sector

Gold. Photo: Minesandsteel

Nigeria is endowed with numerous mineral deposits.

The Ministry of Mines and Steel Development has so far identified about forty-four different minerals scattered across the country.

Notable amongst them are iron ore, bitumen, gold, rock salt, gypsum, lead, zinc, coal, gemstones, kaolin, tantalite, bentonite and barite.

A report published by Professor, Uriah Alexander Lar of the University of Jos, entitled “Geology and Mineral Resources of Nigeria and Their Uses,” estimates that less than 5% of the nation’s mineral reserves are currently being mined, processed and marketed.

Meanwhile, the National Bureau of Statistics puts the sector’s contribution to the nation’s Gross Domestic Product, GDP as of the second quarter of this year at less than two percent.

According to the NBS, the Mining and Quarrying sector consisting of Crude Petroleum and Natural Gas, Coal Mining, Metal ore and Quarrying and other minerals sub-activities grew by minus 6.27% in the second quarter of this year.

Quarrying and Other Minerals exhibited the highest growth rate of all the sub-activities at 65.56%, followed by Coal mining activity at 52.07%. However, Crude Petroleum and Natural Gas was the major contributor to the sector with a weight of 91.88%.

In a bid to prioritize the Sector, the Federal Government set aside N6bn in the Economic Sustainability Plan to support artisanal and small-scale miners in response to the impacts of the Pandemic on the economy.

Also, the Federal Government through the Presidential Artisanal Gold Mining Initiative enables the CBN to buy gold produced by Nigerian miners at international prices.

This is to protect miners from being exploited by foreign merchants.

Plagued by inadequate regulation

However, the mining sector is still plagued by inadequate regulation, health hazards, and especially the activities of illegal mining companies.

The effects of illegal mining call for concern. For instance, about two months ago, a toxic leak from Angola’s biggest diamond mine, reportedly turned a tributary of the Congo River red, causing the death of twelve people and over four thousand others sick.

Also, in Burkina Faso, while trying to disperse unauthorised gold miners using tear gas, eight suffocated to death.

To avoid such dangers to the environment and human life, there is a need for Government to establish training centres to engage small-scale and artisanal miners on safe practices and sustainable operations.

Also, Governments need to demonstrate more aggression and purpose in the fight against illegal mining by improving monitoring and vigilance, ensuring that suspects are arrested and persecuted, as well as the establishment of special courts to expedite the prosecution of illegal miners.

It is necessary for the government to intensify formalization efforts of artisanal and small-scale miners to increase employment and enhance the lives and livelihoods of mining communities, as well as improve the security of mines, especially in remote communities.

Local Content Bill

To catalyze development in the sector, the speedy passage of the Local Content Bill, which seeks to repeal the Nigerian Oil and Gas Industry Act, 2010 is expedient.

The Bill which has passed second reading in both the Senate and House of Representatives seeks to give first consideration to Nigerian indigenous companies and firms in the award of licenses and leases.

It is also to introduce a Nigerian Solid Minerals and Metallurgical Content Development Fund that would enable artisans to acquire equipment and technologies for the exploration and exploitation of mineral resources.

The bill would undertake mutually beneficial public-private partnerships for developing the mining sector and partner with indigenous Nigerian companies for the establishment of Minerals Buying Centers.

With such an act in place and effectively implemented, mining would take its pride of place in the country’s economy.

Reporting by Annabel Nwachukwu; editing by Tina Oyinsan