HomeEvent NewsThe glory days are back for the mining sector in Nigeria

The glory days are back for the mining sector in Nigeria

For a country with vast solid mineral resources, it is hard to believe that mining in Nigeria only contributes 0.5% to its GDP.

In 2016, the federal government put forward an ambitious roadmap to increase this contribution to 10% by 2026.

GERARD PETER spoke to ALHAJI KABIR MOHAMMED KANKAR, president of the Miners Association of Nigeria (MAN) about how his organisation and government are re-energising a sector that was once the mainstay of the economy.

This article first appeared in Mining Review Africa Issue 9, 2019
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There was a time when Nigeria’s mining sector was booming, particular coal mining. Up until the late 1960s, this sector contributed significantly to the country’s GDP (see sidebar). 

Today, it is estimated that Nigeria is endowed with about 34 solid minerals identified in 450 locations in the country.

These include bitumen, located in the states of Ondo, Ogun, Lagos and Edo; gold located in Kogi, Niger and Kaduna; lithium located in Ekiti, Kaduna and Nasarawa; and uranium in Bauchi and Taraba states – to name a few.

However, none of these resources have been fully exploited, which would enable them to become major contributors to the economy.  Much of the reason lies in the fact that since the 1960s, greater attention has been paid to its oil and gas sector. And for good reason; Nigeria is Africa’s largest oil producer and crude oil exports account for 70% of overall government income.

However, Kankar points out that as the world embraces green energy alternatives and decreases its dependence on oil, the country needs to diversify its interest.

“With such rich solid mineral resources, I believe that mining in Nigeria can contribute significantly to our economy,” he states.  Kankar was recently appointed to head MAN, a national industry association with a 400 strong membership comprising entities and individuals that are directly involved in mineral resources exploration and exploitation in Nigeria.

It also is the umbrella body of all other trade and industry associations in the mining industry and its vision is to positively engage the government to provide an enabling environment for mining activities to strive.

Roadmap to success

In September 2016, the Ministry of Minerals and Steel launched a plan called the Roadmap for Solid Minerals in order to develop strategiesforthe rapid development and utilisation of key industrial minerals and metals in order achieve a 10% GDP contribution by 2026.

Understanding the needs of artisanal gold mining communities

The roadmap outlines three phases, implemented in stages, to achieve this goal. Phase 1 is to rebuild market confidence in the minerals and mining sector and win over domestic users of industrial minerals that are currently imported.

Phase 2 is to expand the domestic ore and mineral processing industries through increased beneficiation, and Phase 3 is to establish Nigeria within the global ore and mineral markets at a market competitive price point.

Kankar firmly believes that a 10% target is certainly achievable. “Already, the government is purposely investing more money into infrastructure for mining operations.

This includes transportation infrastructure, bulk handling terminals and power supply.” In addition, he adds, government is making funding for local operators more accessible and has also put in measures to encourage international companies to invest in the country, such as a three-year tax holiday for new mining companies.

In addition, the government has also allocated US$85 million for the Mining Intervention fund which will be used to provide geoscientific data and promote detailed mineral exploration and research by the Nigeria Geological Survey Agency in cooperation with experienced private mineral exploration and mining entities.

Safe and open for business

Kankar continues that in addition to financial incentives and investing in infrastructure, there is also a strong emphasis on reassuring mining companies that the country is safe to do business in.

This includes improving public security and curbing illegal mining. He adds: “Most mining is currently done on an artisanal basis by people who really on this activity for an income. As such, we need to ensure that we absorb artisanal miners into formal mining operations.”

Regarding regulations in Nigeria, Kankar explains that this should not be seen as a barrier to entry for international mining companies to do business in the country.

“As long as you comply with the legislation and actively and meaningfully engage with communities in mining regions, then we welcome international companies to partner with us.

“As a country, naturally we want to use our own resources to industrialise ourselves and increase our local skills set and manufacturing capabilities. However, we welcome international experts to assist us with exploration and start operations as well as assist us in upskilling our local workforce.”

With regards to the exploitation of resources, Kankar explains that there is no single focus on a particular mineral. That said, this will be driven by global demands, particularly the current demand for battery minerals.

Is it a realistic goal?

Without doubt, realising the fortunes of the Nigerian mining sector is a monumental task that requires considerable investment from the government itself.

However, Kankar believes that money currently earned from crude oil exports can be used to build infrastructure to help kick-start the revival of the sector. So has the roadmap achieved its goals to date?

Kankar believes it has as they have already received genuine interest from companies from around the world. Also, he adds that events such as Nigerian Mining Week, to be held in Abuja from 14 to 16 October 2019, is an important platform where the country can showcase it immense mining potential.

With more than 80 mine and exploration companies from 24 countries and more than 1 200 delegates expected to attend, the event is a good yardstick to gauge the growing interest in the country’s mining sector.

“As MAN, our mandate is to make mining lucrative in Nigeria. Not only will it contribute significantly to the country’s economy but mining is human capital intensive.

“As such, mining will creat numerous employment opportunities and will ultimately improve long-term community development. There is a lot of mining opportunities in Nigeria and we invite the world to our doorstep,” Kankar concludes.