Here’s What You Need To Know About Mining Opportunities in Nigeria
Keynote Address by Arc. Olamilekan Adegbite, Honourable Minister, Ministry of Mines and Steel Development at the 5th Edition of the NIGERIA MINING WEEK (VIRTUAL), 16th— 17th Nov. 2021
Your Excellency, Prof. Yemi Osibanjo, GCON, Vice President of the Federal Republic of Nigeria, Your Excellencies, executive governors, Honourable ministers, distinguished members of the National Assembly, members of the Diplomatic Community, heads of agencies and government parastatals, captains of industries, distinguished participants, ladies and gentlemen.
On behalf of the Ministry of Mines and Steel Development, it gives me great pleasure to welcome you all to the 5th Annual Nigeria Mining Week, which is being held virtually.
Although we greatly miss the ambience of getting together in-person, occasioned by the current challenges arising from the COVID-19 pandemic, the digital event remains the ideal platform for all the mining stakeholders in the public and private sector to come together.
Thank you all for coming to this platform, which offers an avenue for open dialogue between the government, mining operators, and technology service providers.
This year’s event is titled “Seven Compelling Reasons to Invest in Nigeria’s Mining Sector”. I can, however, give you a hundred compelling reasons to invest in Nigeria’s mining sector. For starters, we are endowed with over 44 different mineral types occurring in commercial quantities in over 500 locations across the 36 states and the Federal Capital Territory. These mineral endowments broadly cut across the various mineral spectrums.
We have industrial minerals such as barite, kaolin, gypsum, feldspar, and limestone. We are endowed with energy minerals such as bitumen, lignite, and uranium. We also have metallic ore minerals such as gold, cassiterite, columbite, iron ore, lead-zinc, and copper.
There are construction mineral types such as granite, gravel, laterite, and sand. We also have the precious stone variety such as sapphire, tourmaline, emerald, topaz, amethyst, and garnet, just to mention a few.
This clearly demonstrates the wide mineral spectrum we are endowed with, which offers limitless opportunities for exploitation, job creation, revenue growth, and economic development.
Out of the 44-mineral endowment, seven were selected for immediate development. They are coal, iron ore, bitumen, gold, limestone, lead-zinc, and barite.
We have also adopted a forward-thinking approach by developing the strategic minerals of the future. These include minor metals such as titanium and cobalt, which are vital to futuristic industries such as telecoms and electric vehicle manufacturing.
We have indeed created a very business-friendly environment in the mining sector through reforms that grew out of the roadmap for the growth and development of the Nigerian mining industry.
The roadmap, which was formulated in 2016, gave us clear policy direction on how to develop the sector, which we have adhered to religiously to unlock the potential in the sector.
This is in line with President Muhammadu Buhari’s determined resolve to diversify the economy, weaning it off its addiction to the hydrocarbon sector. To this end, the ministry has continued to work hard to increase the revenue generated from the sector and its contribution to the national GDP.
The sector is also being primed to be a huge job creator, broadening the spectrum of economic opportunities available to Nigerians through the pursuit of strategic policies.
It may please you to know that every policy initiated by us has been steeped in global best practices. Transparency has been our watch word and cornerstone upon which the mining industry has been administered, as we continue to foster a culture of openness which will, in turn, engender trust between all stakeholders in the industry.
Carrying out this mandate through our various reforms is a drive towards creating value in the mining sector that would ultimately benefit the citizens.
The Ministry has been scaling up the capacity of the sector, transforming it into a strategic catalyst for domestic growth while also achieving a high level of global relevance.
Your Excellencies, ladies and gentlemen, permit me to remind you that in July 2021, the Ministry successfully hosted a virtual meeting with the 774 local government chairmen, chaired by the Vice President, Prof. Yemi Osinbajo.
The event was part of our mandate to develop the sector, creating opportunities for both local and foreign investors to exploit the various minerals occurring in each local government area to create jobs and empower members of the local host mining communities.
Just recently, we launched the Made in Nigeria Barite in Port Harcourt, as part of our modest efforts towards the development of industrial minerals. This initiative is expected to spur the promotion and growth of local content, boosting the economy with a corresponding increase in revenue.
The initiative would not only put Nigeria on the radar of the global mining communities, but would also save the country about $300 million in annual importation costs, thereby creating employment opportunities for the teeming population.
The Ministry will also commission an open marketplace portal that will connect all stakeholders along the barite value chain to a hub that allows for easy coordination, stocking, effective costing, and seamless sale of barite, as we adhere to the ease of doing business initiative.
We have commenced one pilot project per geopolitical zone in order to enhance local content along the mineral value chain.
This is in line with our mandate to fast-track mineral processing in the country using a cluster approach. Each cluster will be equipped with modern equipment and technologies to support a network of miners, processors, skills development providers, logistics providers, etc.
We have operationalized an Artisanal and Small-Scale Mining (ASM) Remote Sensing Monitoring System to regulate and support ASM activities.
Through the Nigeria Integrated Exploration Programme (NIMEP), we are building a strong geoscience base to enhance our competitiveness as a world-class mineral exploration destination that foreign investors would find attractive. This geoscience information will help in de-risking the sector.
Target minerals under the first phase include gold, lead, zinc, iron ore, and rare metals, among others. Delineated areas will be partitioned into blocks and transparently concessioned to financially competent investors.
We have also commenced the process of retrieving Nigeria’s colonial geological data from the United Kingdom by engaging the British Geological Survey (BGS) to build a national electronic geo-data archiving management system to be called the Nigerian Geo-data Center at the Nigerian Geological Survey Agency (NGSA). This would provide easy access to geo-science data for prospective investors on potential areas to target for exploration and mining within and outside Nigeria.
The BGS will also integrate historical geo-data of Nigeria into NGSA and the National Steel Raw Materials Exploration Agency (NSRMEA) into the system.
The Mining Cadastre Office has been repositioned to promote transparency in mineral title administration. The processes have been streamlined to enable investors to apply online and obtain licenses and leases within and outside Nigeria.
We are also establishing MCO offices in the six geo-political zones. They include Jos, Enugu, Ibadan, Kaduna, Maiduguri, and Benin.
From the revenue drive perspective, MCO has demonstrated marked improvement despite the challenges of the pandemic. It grew its revenue from N2.3 billion in 2020 to N3.88 billion in 2021 as of October 31st, with two months still remaining in this year to achieve higher revenue. The secret of the sudden jump can be attributed to the introduction of “First Come, First Served” and “Use it or Lose it” in the licensing administration. This has helped to re-organize, eliminate speculators, and led to the revocation of about 1,566 mineral titles. This has activated many dormant licences and increased revenue inflow into the treasury.
We have also institutionalized business-friendly incentives to further make the Nigerian mining sector more attractive to foreign investors.
The incentives include:
a. Customs and import duties waiver for plant, machinery and equipment imported for. mining operations
b. Tax holidays of between three to five years as applicable.
c. Free transferability of funds and permission to retain and use earned foreign exchange
d. Capital allowances of up to 95% of qualifying capital expenditure
e. Deductibility of Environmental Costs (money meant for environmental remediation will be tax free)
f. 100% ownership of mineral properties.
We have made the gold sector more compelling for investors by building a gold ecosystem that nurtures value across the entire value chain. The Segilola gold project, which is the first large-scale high-grade gold project owned by the London Stock Exchange, listed Thor Exploration is a testament to such an effort.
Located in Osun State, the project has begun the production of gold. Similarly, two gold refineries, Kian Smith and Dukia Gold and Precious Metals Refining Company Limited, are currently being built to increase the value of gold in the country for the benefit of all stakeholders.
Through the ongoing Presidential Artisanal Gold Mining Initiative (PAGMI), we are organizing, formalizing, and equipping artisanal and small gold miners (ASGMs) in Kaduna, Kebbi, Osun, Niger, Ebonyi, Sokoto, Gombe, and Ekiti.
We are also building human and institutional capacity, which remain one of the cornerstones of our drive to transform the sector. We want to ensure that when you come, you have adequate capacity within the country to carry out your exploration work or operate the mines. The mining institutions are currently being re-equipped, and the ministry staff are being trained to perform their regulatory functions more efficiently and professionally.
Finally, I wish to urge those who are still dithering about investing in the Nigerian mining sector to take the leap. Our country still provides one of the highest rates of return on mining investment as our minerals are closer to the surface, conferring the advantage of lower cost of production when compared to other mining jurisdictions.
Thank you for your rapt attention.