Scientists define solid minerals as naturally occurring substances that are solid and inorganic. Nigeria is unarguably blessed with 44 solid minerals ranging from precious metals to kaolin, barite and limestone. Africa’s most populous country also has valuable mineral assets such as gold, iron ore, baryte, bitumen, lead, zinc, tin and coal.
The sector contributes 0.46 percent to GDP. The current Federal Government, at its inception, stated clearly that it would revive the solid minerals sector to make it a reliable foreign exchange and tax earner and to create millions of jobs.
However, this does not seem to be working the way the government deemed it at its inception. It is becoming clearer by the day that the sector is capital intensive and requires heavy investment at the exploration stage before meaningful revenue or FX can come from there.
Apart from being capital intensive, it is long-term and can take the next two administrations to yield results.
Part of the challenge, as explained by Ibrahim Garba, a geologist and vice chancellor of Ahmadu Bello University, Zaria, at the 2016 Kaduna International Fair, is that Nigeria is not known by investors as a mining destination.
Countries such as South Africa, Democratic Republic of Congo, Ghana, Tanzania and Zimbabwe are known as mining destinations, having developed mining infrastructure and attracted investors to exploration and mining.
The basic challenge, therefore, as confirmed by mining experts, is that investors are not coming because they do not know what they may get.
Exploration means ‘search’. This means that an investor can get what he wanted to or not at the end of it. This places a lot of burden on Federal Government to take decisive actions on data gathering.
In a report developed by PwC in 2015 entitled, ‘Developing the solid minerals sector: Quick wins for the new government’, the firm stated that the immediate past government achieved 100 percent aerial geo-physical survey of the country, going by data at the then Ministry of Mines and Steel Development for would-be miners. However, the firm was careful to explain that this does not provide reliable details of the estimated quantity of the nation’s solid minerals, which can only be achieved by more detailed geo-science data gathering.
This point was repeated by Shehu Sani, president, Miners Association of Nigeria (MAN). While Nigeria awaits investors, it is clear that only very few investors will be willing to go where angels fear to tread. Investors need data and Nigeria should be ready to provide same.
Another challenge is funding. Kayode Fayemi, minister of solid minerals development, has unveiled a road map for the solid minerals sector and announced securing $150million from the World Bank for the Mineral Sector Support for Economic Diversification (MSSED or MinDiver) programme. He has also launched N5 billion mining fund, domiciled in the Bank of Nigeria (BoI), for artisanal miners. However, artisanal and small-scale miners are struggling to provide collaterals for the intending financiers. Major players in the sector say they need N2 trillion to keep the sector rolling in the next 30 years, an amount that is not easy to come by.
The euphoria which attended the solid minerals sector at the commencement of Muhammadu Buhari’s government is waning as the reality is dawning.
States that were asked to partner with the private sector to explore abundant solid minerals within their jurisdictions are now prostrate, as none of them has successfully announced earning revenue or FX from solid minerals, which necessitates their monthly shuttle to Nigeria’s capital, Abuja, for federal allocation. Twenty states in Nigeria owe workers and pensioners salaries and entitlements ranging from one to 36 months, according to a BudgIT nationwide survey in June.
Experts say Nigeria needs to embark on road shows and educate investors on what is available. However, it is important to know what is on ground through data before wooing these investors.