Overview of the mining sector under President Buhari first four years
Highlighting some of the lapses and successes of the Nigeria mining space has become necessary in the last four years under President Muhammadu Buhari as Nigerians await what’s in stock for them in the coming years of Next Level. The past four years have been filled with controversies, gains and minuses in the mining sector. AYONI M. AGBABIAKA reports.
While the sector was challenged from lack of sufficient budgetary allocation, low revenue to the government from solid minerals exploitation, inaccurate export data and constant export without permits nor inspection by pre-shipment agents and lack of payment of royalties; lack of accurate mineral production data; shortfall in concise geosciences data; informal and illegal mining by holders of exploration licenses was rampant, the Ministry of Mines and Steel Development (MMND) developed a roadmap for the growth and development of the Nigeria mining industry, which was approved by the Federal Executive Council in November 2016 to diversify the nation’s economy using solid minerals as one of the strategic pillars.
The Roadmap seeks to make Nigeria self-sufficient in construction materials as well as produce industrial raw materials, in which Nigeria has comparative advantage. This presents opportunities for the development of hydrated and quick lime for water treatment, dimension stones for construction, as well as Calcium Carbonate, Gypsum and Kaolin for pharmaceuticals, cosmetics, and other manufacturing industries. Also included are Bentonite and Barites for the oil and gas industry.
The sector recorded a number of successes during the period under review. “The most critical challenge facing the sector before the advent of this administration was poor funding. In 2015, the aggregate capital allocation for the entire ministry was shy of one billion naira annually, I am glad to inform you that this has improved tremendously in the last years,” the minister of state for Mines and Steel Development, Hon. Bawa Bwari stated.
N30bn intervention fund
The sum of N30bn (approx. $100m) was approved as intervention fund for the ministry to fund exploration projects, generate the needed geosciences data and provide the necessary regulatory framework to enable sectoral growth.
$150m World Bank loan
Also, a loan of $150m from World Bank was secured for the Mineral Sector Support for Economic Diversification (Mindiver) programme.
Under President Buhari’s administration strategic interventions from 2016, the mining sector witnessed a steady rise in its contribution to the nation’s GDP from 0.33% in 2015 to 0.6% in 2016. Overall, the revenue generated by the ministry from royalties and fees improved from N2.08 billion in 2015 to N3.92 billion in 2017 and N2.97billion as at October 2018.
The Mining Cadastre Office (MCO) also realised the sum of N5.2 billion as revenue generated through processing and other licensing fees.
Retrieval of old data:
Valuable data on various mineral deposits across the country was obtained from Fugro N.V, a global offshore and onshore geotechnical and survey services company who in 2006 undertook an aeromagnetic survey of the country, but did not release the outcome to the government due to non-payment. The Nigerian Geological Survey is already using the data to explore for strategic minerals.
The ministry acquired diamond core drilling rigs and assaying equipment amongst others for the Nigerian Geological Survey Agency and National Steel Raw Materials Exploration Agency for use in geosciences data generation.
The Nigerian Geological Survey Agency carried out exploration for phosphate in Sokoto state. The phosphate economic mineralization was found to be suitable for establishment of fertilizer plants. Currently, test drilling is ongoing within the mineralized corridor and into hitherto unknown areas in Kebbi state.
Inventorization and assessment
In a similar development, the ministry in collaboration with the Cement Technology Institute of Nigeria (CTI) carried out the inventorization and assessment of all carbonate rock resources (limestone, marble, magnesite and dolomite) in Nigeria. The project identified and characterized the resources in terms of their location, size, chemistry and suitability for cement manufacture. This is aimed at boosting the industrial mineral base of the country to support local industries and conserve foreign exchange. NGSA also operationalised the MoUs and Technical Cooperation Agreements with China Geological Survey. To this end, a nationwide regional geochemical mapping, aimed at identifying new mineral deposits, commenced in early 2018.
Also as part of the energy policy for the invigoration of the coal sub-sector and concession of Nigerian Coal Corporation coal blocks, a Project Delivery Team (PDT) was inaugurated. This was in furtherance of the aspirations of government to ensure that coal-fired power plants generate 30% of the nation’s electricity power, by the year 2020.
The limestone resource base of the country increased from 2.3 billion tonnes to 10.6 billion tonnes. Limestone mining has continued to lead in royalties earned by government within the period under review,
An estimated 4.8 billion tonnes of marble was also found to occur in Nasarawa, Ondo, Edo, Oyo, Kogi, Kwara, Niger, Kebbi states and the FCT.
N15 billion integrated exploration programme
In addressing the issue of scarce geological data, an integrated exploration programme through the award of N15 billion contracts to international exploration companies for the purpose of exploring priority classified minerals like gold, lead, zinc, iron ore and rare earth metals.
Abuja earth tremor:
Another notable event during this period was the earth tremors experienced in some parts of Abuja. However, the ministry was able to douse the tension and acquired five high sensitivity Seismometers/Tilt meters for use in monitoring and detecting earth movements and earthquake related activities in the country and to provide timely information and advice to the general public and requisite government agencies.
Work is in the final stages for the reactivation of Ajaokuta 110MW thermal power plant for use in generating internally needed electricity, while the excess is fed into the national grid. The two integrated steel plants, Ajaokuta Steel Complex owned by government and Premium Steel (formerly Delta Steel) now run by private operators, are working towards commencement of production, “as we are addressing the start up challenges, some private steel plant owners – African Natural Resources and Mines Ltd, KAM Steel, and WEMPCO have acquired mineral titles to mine iron ore for steel production, to substitute scrap iron/steel as feed stock.
“African Natural Resources and Mines Ltd, in particular have invested over $600 million in the development of their six steel plants located at Lagos, Ikorodu, Ogijo, Agbara, Abuja, and Port Harcourt. They are also building a captive power plant in Kaduna, using Nigerian coal. Kogi Iron Limited an ASX listed iron ore mining company continues to blaze the trail in iron ore utilization. Contrary to previously held beliefs, the company has developed ways of using its iron ore resource to produce high grade steel, proving that apart from Itakpe, which was meant to feed Ajaokuta, Nigeria has other sources of iron ore for making steel. Its plan to build a steel plant at Agbaja is in final stages.
Also, “in our quest to ensure local sourcing of steel raw materials and in line with its statutory mandate to enhance reserve estimates for steel, the ministry executed the following exploration projects during the period under review: Yola Nora Iron Ore Project, Tafawa Balewa LGA, Bauchi state; Agbado-Okudu Iron Ore Project, Kogi state; Ebiya Iron Ore Project, Ajaokuta LGA, Kogi state; Bauxite Project, Sardauna LGA, Taraba state and Amansiodo Coal Project in Enugu state.
“These projects are geared towards satisfying the current estimated local steel demand which stands at 4.5 million tonnes per annum. Currently, 30% of the local requirements are met by local steel companies using 100% scrap as raw material,” the minister said.