Exclusive interview with Emuesiri Agbeyi, Partner, Tax and Regulatory Services, PwC Nigeria. 

Let’s start with some background on PwC in Nigeria

PwC has been operating in Nigeria since 1953 through its predecessor firms of Coopers & Lybrand and Price Waterhouse. We are one of the leading professional services firms in Nigeria with offices in Lagos, Abuja and Port Harcourt with over 1 000 staff.

Our clients range from the biggest, most complex global establishments to smaller, newer businesses both privately owned and those in the public domain.

What in your view are the main opportunities for the mining sector in Nigeria and the region?
Mining has the potential to contribute more to Nigeria's GDP. As the regulatory framework for the sector becomes clearer, Nigeria has a great opportunity of using its mineral resources to drive its industrialization and the diversification.

There is a very wide variety of mineral deposits occurring across many states in the country. Minerals such as iron ore and coal can serve as a stimulus for economic growth. Steel which is derived from iron ore is fundamental to infrastructure development and investment. At the moment, the bulk of steel used in real estate and infrastructural (road and bridge construction) development in Nigeria is imported.

In order to boost the nation’s power generating capacity, the Federal Government has proposed 30% contribution from coal alongside other sources to meet the Nigeria energy need.

Therefore, coal will serve as a major source of energy in Nigeria. The Federal Government will need to continuously assess the power energy mix in line with global migration towards cleaner sources of energy.

Another area of investor interest will be the beneficiation aspect of the mining value chain. A lot of emphasis is currently being placed on this in Nigeria. The current practice is the export of output of production with little or no transformation, hence limiting returns for Nigerian miners from sale of minerals.

With increased emphasis by the Federal Government on beneficiation, we expect to see an increase in privately owned purification plants and mineral testing laboratories.

West Africa is increasingly becoming an important mining hub for Africa. Several new mining projects are being developed across the region, particularly in Ghana, Burkina Faso, Mali, Mauritania, Liberia,Sierra Leone and Nigeria. Practically all West African countries have recorded significant growth in production driven by investments in new mines. The potential returns for investors in Western Africa will be significant.

Nigeria will need to increase its pace of mining site development as most of its projects are still in the green field state.

And the challenges?
The poor state of infrastructure is one of the major challenges faced by the mining sector in Nigeria. By infrastructure I mean structures necessary for the exploration, development and production of mineral resources.

These will include power for the plants which will process the minerals, roads or rails to transport the final product as well as an efficient port for exportation of said products.

Security is also a point for concern, bearing in mind that a good number of mining projects are based in the Northern part of the country, which has experienced protracted security challenges. Alignment of Federal and State Government interest has also limited the development of the Nigerian mining industry.

The authority to the land is with the State Government, while the authority to the mineral resourses below it is with the Federal Government. An investor with a mining license from the Federal Government cannot access the mining site without the consent of the State Government, and in most cases the consent of the local government and community. These are separately obtained and froth with their separate challenges.

However, we have seen increased collaboration in recent times between Federal and State Governments regarding license issuance. The setup of the National council on mining and mineral resources development, and strengthening of the State mineral resources and environmental management committee, are also recent developments that I believe will address this misalignment.

What is your vision for this sector?
PwC is currently reinforcing its teams specialized in providing advice to mining operators and subcontractors. Our network of firms based in developed mining regions is always ready to provide support.

We are well positioned to advise new investors in the sector while also supporting the existing operators in solving important problems. We want to see a sector that creates value for all its stakeholders and is able to emerge as a remarkable source of revenue for government.

What are some of the mining projects that your organization is involved in that you are most excited about currently?
We are excited about the work we are doing in the policy space. Quite significant is the work we are doing with the Ministry of Mines and Steel Development. We were instrumental to the drafting of the Mining roadmap, the development of the strategy for harnessing the Bitumen resource, the untangling of the various issues that has held back steel production, defining the framework for various funding options for the sector amongst others.

The review and realignment of the sector’s policy framework, which we have been a part of, have helped to showcase Nigeria as being ready to exploit its mineral potentials and open for foreign investments.

We are also working with other stakeholders in the sector including state governments looking to increase their take from mining resources, companies looking to invest in the sector, equipment manufacturers, financiers etc. All of these activities have helped to increase Nigeria’s profile as an important mining destination.

On the other hand, we are involved in building the capacity of a number of the leading mining operators in the areas of better record keeping and ensuring the delivery of properly audited accounts.

We are supporting companies in securing finance and structuring deals for tax efficiencies as well as in recruitments and capacity building for their staff. We are also facilitating the conversations around partnerships between states and private companies and project managing key projects in the sector to ensure profitability for all stakeholders.

How important is the Nigeria Mining Week as a meeting place for the sector?
Nigeria Mining Week is of immense importance as this is the biggest forum that brings together stakeholders in the mining industry in Nigeria with significant interest and participation from players in other major mining territories of the world. It presents an excellent opportunity to interact, forge relationships, and share ideas towards the development of the industry.

A collaboration between PwC Nigeria, the Miners Association of Nigeria, and the Ministry of Mines and Steel Development, Nigeria Mining Week has initiated discussions around major challenges of the industry, which has led to major policy changes and recorded developments.

It is a platform of critical importance, especially in this development stage of the Nigerian mining industry, and as Nigeria continues to seek its position amongst the major global mining destinations.

The upcoming Nigeria Mining Week in Abuja in October is jointly organised by PwC and the Mining Association of Nigeria (MAN) and hosted by the Ministry of Mines and Steel Development.

“Nigeria Mining Week has initiated discussions around major challenges of the industry, which has led to major policy changes and recorded developments”