HomeFeatures & AnalysisExclusive interview with Mr Cyril Azobu, PwC Nigeria’s Mining Sector Leader and...

Exclusive interview with Mr Cyril Azobu, PwC Nigeria’s Mining Sector Leader and Head Consulting

1) Let’s start with some background on PwC in Nigeria, the organisation’s work in the mining sec555555tor and your role at the organisation?
PwC has been operating in Nigeria since 1953 through its predecessor firms of Coopers & Lybrand and Price Waterhouse. We’re part of a network of firms in 157 countries with more than 223,000 people who are committed to delivering quality in assurance, tax and advisory services. One of the industry sectors we focus on is the mining sector. Globally, PwC is a leading advisor to the mining industry with mining professionals in all significant mining territories which includes Nigeria. We work with clients to unlock opportunities in this industry and our strength in serving this very critical sector of the economy comes from our highly developed skills, experience, and the strong interconnection we maintain across our global industry specialists. I am a Partner in our Advisory practice as well as the Mining sector leader for PwC Nigeria. This means that I am responsible for supporting our clients as well as our other initiatives in this sector.

2) What are the main challenges to the sector in Nigeria in your view?
A number of factors have affected the development of the mining sector in Nigeria. Chief among these includes access to funding for investors. Nigerian banks have historically been averse to financing the mining industry due to a host of reasons including a poor understanding of the technicalities of the sector, unwillingness to deploy long term funding, and non-availability of bankable feasibility studies. Funding challenges have been identified as the reason for the inability to embark on detailed geo-science data gathering. Existing licenses are worth just the mineral titles without any reliable information on estimated quantity. Mining licenses in Nigeria cannot be used as collateral for loans, as done in other global mining hubs. Security challenges has also affected foreign investments in the sector. The north central, north-east and north-west regions are known to have some of the country’s major mineral deposits. Due to the threat of terrorism and other forms of social unrest, mining activity in these areas has slackened with foreign entrants discouraged by the threats.  Related to this is the threat caused by illegal miners who, with their knowledge of the local terrain may pose security challenges to legitimate mining activities. Furthermore, the absence of a formal policy on artisanal mining has seen the rise of a largely informal operation fraught with the use of crude equipment and extremely dangerous working practices. This among other issues exposes miners to uncontrolled risks while leaving the environment prone to degradation, erosion, excessive pollution and poisoning of local inhabitants. In addition, there is a huge infrastructural deficit in the country. Dilapidated roads, inefficient railway transport system, epileptic power supply or the lack of it in some rural parts of the country are all infrastructural challenges which all constitute challenges to the development of the sector.

3) What are the opportunities?
Nigeria is very well endowed with numerous mineral resources much of it still untapped. This presents an array of opportunities for people looking to play in the sector. The times are right too as there is a remarkable shift in thinking among policy makers towards other sources of revenue for government besides oil and the solid minerals sector is one such. Hence there is some level of focus being given to developing the sector. I am aware for example that the Ministry is developing a comprehensive policy agenda for Nigeria’s minerals and mining sector, which will be unveiled soon and that will set the tune for investments in the sector. Already, there are a number of incentives that have been put in place for players interested in investing in the sector. Incentives like three-year tax holiday to new mining companies which may be extended for one further period of two years. Mining operators are also granted exemption from payment of customs and import duties in respect of plant, machinery, equipment and accessories imported specifically and exclusively for mining operations. Other incentives include deferred royalty payments, possible capitalisation of expenditure on exploration and surveys and extension of infrastructure such as roads and electricity to mining sites by government. There is also provision of 100% foreign ownership of mining concerns.

4) What is your vision for the sector?
My vision for the sector is one that is profitable to all stakeholders and in which the Nigerian people are able to enjoy the maximum benefits possible for these natural endowments.  I am quite optimistic that if the right steps are taken and the current momentum is sustained, the solid minerals sector can contribute up to 10% of GDP by 2020 up from a current contribution of just about 0.46%.

5) How important was launching last year’s inaugural iPAD Nigeria and being founding partners?
We are very happy to have partnered with iPAD for the first Nigeria Mining Forum which held in November of 2015. The forum opened the door to an exclusive networking opportunity for key stakeholders as well as technology solution providers who were seeking a new market and new clients for mineral exploration and extraction. It also afforded an opportunity for close interaction with policy makers to elucidate on their plans for the sector.
Launching the forum as founding partners further showcased PwC’s interests in the sector and demonstrated our competence in supporting clients including investors, mining operators, finance houses and government in the sector. It’s a partnership we are happy to sustain for the long haul.

6) This year you are joining forces with MAN, how excited are you about this?
The miners are no doubt critical stakeholders in the sector and this makes their umbrella body, the Mining Association of Nigeria (MAN) an important partner on this initiative. We are happy to have them on board this year. With their involvement we hope to even achieve greater impact as the forum aims to be a platform that brings together operators, investors, financiers
and policy makers. We also hope that the forum will help address some of the specific challenges faced by MAN and her members.

7) What will be your message at this year’s iPAD Nigeria?
I honestly think that anyone who is interested in exploring opportunities in Nigeria’s solid minerals sector must be at this year’s iPAD Nigeria mining forum. It is the ultimate event for the sector and the activities that are planned are sure to be of great value to all attendees. My message really is to reiterate the many possibilities in the sector and to invite investors to take advantage of the fresh optimism to make the most of the opportunity the sector presents.