Mines Minister said 2 MoUs were signed between Nigeria & Shandong province and between Nigeria & China in the area of exploration & geological sciences.

The Minister of State for Mines and Steel Development, Honourable Abubakar Bawa Bwari says that the Federal government is determined to promote value addition in the mining sector to move the sector to higher level.

Hon. Bawa stated this while receiving in audience a delegation of Chinese foreign investors led by the Chairman of Sino Min Metals Limited, Mr. Paul Kaizer. Hon. Bwari said government is ready to partner and support serious mining investors that are engaged in value addition of mineral products. 

He said “the principle of this Ministry is any mining company that comes with the concept of value addition will be fully supported”.

The Minister noted that the relationship between Nigeria and China especially in mining is getting stronger by the day. 

He said in the last six months, he has led three delegations to China, during the 2016 China Mining Conference in Tianjin and the Nigeria/China Mining Investment Roadshow in Beijing, where two Memorandum of Understanding (MoUs) were signed between Nigeria and Shandong province and between Nigeria and the Ministry of Land Resources, Beijing, China, in the area of exploration and geological sciences.

The Minister commended the delegation for not only indicating interest in investing in the mining of manganese but in adding value to the product by setting up smelting plant to process silicon manganese.

This he said is what the government is canvassing for and he enjoined them to operate within the laws of the country. Earlier, the leader of the delegation and the Chairman of Sino Min Metals Limited, Paul Kaizer said the delegation was in the Ministry to indicate their interest in partnering with government to promote the production of manganese in the country.

He said their company is into the mining of manganese and located in Kebbi State. The company currently mines manganese and exports it in its raw form but presently have the intention to partner with a Chinese company to set up a smelting plant that will smelt manganese into silicon manganese.

Mr. Kaizer disclosed that the company needs about 100megawatts of power at any given time to operate efficiently and they are in the process of acquiring coal sites in Kogi State to generate power for the company.

The Chairman, Ningxia Jiyuan Metallurgical Group, Mr. M O Junhong, the Chinese partner, said their company is one of the top three in metallurgical in China and currently produces about 450,000 tonnes of manganese in China. He said manganese is in high demand in the steel, cement and building industries. When operational in Nigeria it will generate foreign exchange, create jobs and provide training for man power in the sector, he added.

KEYING INTO THE IMPROVED FUNDING PROFILE OF THE NIGERIAN MINING SECTOR

It is on record that organized mining activities began in Nigeria between 1902 and 1923 following the commissioning of the mineral surveys of the Southern and Northern Protectorates by the British Secretary of State for the colonies in 1903 and 1904. 

Mining became a major source of revenue earner for the country in the 60s to 70s, contributing about 4-5% to the nation’s gross domestic product (GDP).  However, the discovery of oil in the 70s resulted in the gradual neglect of the sector leading to the decline in both funding and revenue generation.

In 2015 the revenue contribution of the mining sector to the nation’s GDP was about 0.33%making it the lowest contributor to GDP compared to other African mining countries like South Africa 18%; Democratic Republic of Congo 25%; and Botswana 40%.

Mining experts in Nigeria have identified the problem of insufficient funding as one of the critical challenges facing the sector.

This was further confirmed by the Minister of Mines and Steel Development, Dr. Kayode Fayemi, during his Ministerial end of year briefing for 2016. He stated that the mining sector’s major contribution to the nation’s GDP in 2015 was unacceptable, especially in the light of President Buhari’s drive to diversify the economy through Agriculture and Mining.

Dr. Fayemi had earlier said on assumption of office in November, 2015,that he and the Minister of State, Honourable Abubakar Bawa Bwari, having identified the major challenges of the sector, would, as a matter of priority, ensure the right reforms and regulatory framework are put in place; attract new investors and collaborate with all stakeholders to build an attractive mining sector.

This led to the formulation of a new mining Roadmap for the sector, which was approved by the Federal Executive Council (FEC) in August, 2016 and formally launched to the public on 19th December, 2016. 

The Roadmap among other things, outlines the path to sustainable development in the sector for the next ten years. 

It lays special emphasis on the critical issues and challenges and how to address them for value creation in the immediate, short, mid-term and long-term periods to sustain the required momentum for reforms in the sector.

In addressing the problem of inadequate funding in the sector, the Minister mentioned some of the measures taken by government to improve funding, which includes increased budgetary allocation for the Ministry of Mines and Steel Development from N1bn in 2015 to N7.3bn in 2016, and an expected capital budgetary improvement in 2017 to about N12.9bn.

It would be recalled that N30bn Intervention Fund was approved in 2016 for the sector by the Federal government from the Natural Resources Development Fund, which is geared towards exploration, formalisation of artisanal miners and providing access to funding for genuine miners.

Also a 13% derivation for mineral revenue to States was also approved from the Federation accounts as well as $150m World Bank support secured by government for the Mineral Sector for Economic Diversification (MSSED) or (MinDiver) program. 

The World Bank support is a critical component that will provide technical assistance for the restructuring and operationalisation of the Mining Investment Fund, which would make finance available to Artisanal and Small Scale operators through developmental finance, micro-finance and leasing institutions.

The Minister said that government is also working with the Nigerian Sovereign Investment Authority, the Nigerian Stock Exchange and others to assemble a $600m investment fund for the sector in 2017 and government has commenced capacity building on Mining Finance within banks and financial institutions, in order to build their knowledge assets in the sector.

In the area of increased revenue generation, Dr. Fayemi disclosed that the sector tripled its contribution to the Federation account to about N2bn in 2016, up from N700m in 2015. 

The N2bn is generated from only royalties and fees while other revenues such as income and company taxes, collected from the sector go directly to the Federal Inland Revenue Service (FIRS). The projection for revenue generation from fees and royalties by the sector is set at N3bn.

With government’s efforts towards increasing the funding and revenue profile of the sector, there is need for all stakeholders to partner with it, take advantage of the available funding provisions and operate in accordance with global best practices in mining to realise the dream of making Nigeria a mining destination.

Rhoda Iliya (AD Press)

 

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