GREAT MINES NIGERIA

Nigeria 2018 | INDUSTRY & MINING | FOCUS: MINING

After decades of neglecting its vast mineral resources in favor of the more lucrative oil, the government is now keen to revive its once thriving mining sector.

Today, in a new era of low oil prices, Nigeria and many other resource-rich countries are still grappling with the aftermath of decades of failure to re-invest oil revenues and diversify the economy, with policy makers baffled by how to reduce their reliance on oil. Besides agriculture, mining was among the sectors that were hit hardest, but experts and policymakers are now focused, more than ever, on relaunching the sector and giving it the attention it deserves.

Between the 1940s and the discovery of oil in 1956, the country was in fact a major mining hub and an important player in the production of coal, tin, and columbite. At one point, it was even the largest exporter of columbite in the world. Nowadays, Nigeria is endowed with over 44 types of solid minerals, most of which are commercially viable. Among them, Nigeria is blessed with some of the highest-quality coal in the world, thanks to its low sulfur and ash content, which also makes it more environmentally friendly.
Coal can play a crucial role in filling the gaps in Nigeria's power sector. Determined to solve the endemic issue of power generation, the federal government has set the goal for coal to contribute 30% to power generation by 2030. With this vision, the abundance of Nigeria's coal reserves presents a myriad of opportunities for local and international investors, particularly as the government is selling its mining assets as part of a privatization drive launched by the then-president Osibanjo back in 1999.
Moving beyond hydrocarbons, the government has identified iron ore as a priority mineral. Nigeria is considered to have the second-largest iron ore deposits in Africa and the fifth globally. The other priority minerals are gold, lead, zinc, limestone, and barite. In particular, with regards to gold, the President of the Miners' Empowerment Association of Nigeria, Sunny Ekosin, back in 2015 revealed that Nigeria loses an estimated NGN8 trillion (USD50 billion) annually due to unexploited gold reserves.
In September 2016, the federal government approved the Roadmap for the Development of the Solid Minerals Sector, which identifies and proposes measures to overcome the challenges in the sector with regards to infrastructure, governance, fiscal incentives, and geoscience, particularly the improvement of the current system for gathering, disseminating, and archiving geological data required by investors. Another major challenge in Nigeria's mining sector is that exploration is mainly conducted by artisan miners or illegally—as opposed to large-scale players—with sub-standard technology and lack of innovation, therefore, hindering progress in the sector.
A year after the launch of the Mining Roadmap, in September 2017, the Minister of Solid Minerals Development Hon. Dr. Kayode Fayemi said that mining had largely contributed to pushing Nigeria out of recession. He also said that Nigeria had seen a 300% increase in revenue between 2015 and 2016; as of July 2017, the sector had already surpassed 2016's entire annual revenue of NGN2 billion.
The ministry also released a statement saying that foreign investors are finally turning a keen eye to Nigeria's mines. An Australian company, Comet Minerals Ltd., has discovered nickel in the northwestern Kaduna state. Also, according to the ministry, many foreign companies are approaching the ministry seeking further geological information on nickel as well as other minerals. Moreover, according to Minister Fayemi, the newly established National Council on Mining and Mineral Resources Development (NCMMRD) is set to further accelerate the sector's growth.
Today, Nigeria's mining sector contributes only 0.5% to the country's GDP; however, with appropriate reforms and adequate investment, the mining sector is estimated to potentially contribute between 5 and 7% to Nigeria's GDP, with drastic positive impacts on job creation, economic diversification, and development.