A Review of the Nigerian Energy Industry

Nigerian mining sector can benefit from $32bn Japanese grant – Ekosin

Mining operations23 June 2013, Lagos – That Nigeria is highly endowed with a large volume of solid minerals is no news. However, the sector has not made significant contribution to the nation’s Gross Domestic Product owing to a variety of factors. In this interview, Mr. Sunday Ekosin, who has been in the mining business for over 20 years, explains what is wrong with the sector; how to remedy the problems; and how Nigeria can benefit from the $32 billion Japanese African Development Fund


You have been advocating for a Presidential Standing Committee on Mining to be set up. What does this mean to the Nigerian economy?
Like we have been advocating, mining is central to national development. When you talk about industrialization, economic growth, mining is central. It is a catalyst that affects other sectors of the economy. It is like a spiral that spreads to agriculture, telecommunication and to industrialization.

All sectors of the economy one way or the other is affected by mining. But the unfortunate thing is that after decades of mining operations in Nigeria, the Nigerian mining industry is still at the scratching level, without mechanised operations.

The reason for this is not far-fetched. A country that is standing on one- legged economy basically, standing on mono- economy of oil and gas, there is no way it can survive under such situation. We must look at other sectors of the economy, if we must have a sustainable growth.

Unfortunately, the situation in Nigeria is such that attention is so much focused on oil and gas to the detriment of other sectors of the economy. But thank God that this government recently started to come up with good policies and advocacy for the sector. To a great extent, they seem to be making some impact.

Like we all know, before the discovery of oil, it has always been agriculture and mining. And so, if you are taking agriculture, it must go together with mining. But without political will to pay attention and focus on the development of mining, the sector, for a long time to come, will be in the doldrums.

When you say mining is central, how do you mean?
Organic fertilizer, for example, is got from limestone, which is industrial mineral. So, you produce this from mining. If you talk about metallic minerals, the raw materials used in cell phones and televisions and other electronic gadgets are got from ore and niobium.

It is so central and you can’t talk about industrialization without looking at iron ore for road construction, fabrication of machines and machineries. As it now, Nigeria is more or less a dumping ground, where all manners of imports come in, whereas, from mineral products, we could produce most of these things imported for consumption by industries in Nigeria.

You just returned from a summit in Japan for development of Africa. How can the Nigerian mining sector benefit from the Japanese grant?
I was in at theTokyo International Conference on African Development, TICAD. It is a programme that started in 1993 by the Japanese government. It was an initiative to forge a collaborative partnership between Japan and the people of the African continent.

It is a programme that comes up once every five years and this is the fifth edition and the twentieth year. The conference was well attended. We had about 51 governments from African nations represented and Presidents from Africa were about 10 physically present. The Vice President represented the Nigerian President and led the team that attended the TICAD conference.

The Japanese government is very interested in minerals from the Africa continent. They are looking at the continent as the nucleus that will sustain the world in terms of natural resources. From their findings, they believe that Africa holds the key to raw material in the world, and, as such, two major countries were very prominent in their discussion with the Japanese government: South Africa because of the zirconium product they have and then the Congo because of cobalt.

The unfortunate part of it is that the Nigerian mineral products are not well known to the Japanese. And because they are not well known, the information available to them as investors is so skeletal. Statistics by the Japanese government showed they identified that Africa accounts for 89 percent of the world total reserves of platinum, 60 percent of diamond, 53 percent of cobalt, 37 percent of zirconium and 35 percent of chrome.

When we look at the enthusiasm of the Japanese government, we found out that these people are not interested
in container- load or shipment of any raw material from Africa. About two of the companies that had discussions with us were more interested in large volumes that the capital outlay will be in the region of at least two million dollars.

I can tell you that among all the indigenous miners in Nigeria, none has that capacity. Even when we have the natural resources available, we do not have the financial capacity and infrastructural capacity, including the equipment to meet that demand.

We now see a very great gap between us, the Nigerian miners and the Japanese end-users. By and large, I came to a summation that that if we must move from the current level of scratching the earth to beat poverty, which we are currently doing, we must go to the next level of small scale and medium scale operation. We need a special intervention and this is where the Nigerian Export Promotion Council, NEPC, comes in. The collaboration with the private sector is invaluable.

Since you have the raw materials buried in the ground and you have the market, why don’t you collaborate with Japanese investors by way of equity investment, so that you can make these raw materials available to them?
That is where the missing link comes in. The way you lay your bed, that is the way you will lie on it. Charity they say begins at home. When somebody has got resources and is unable to harness the resources and to produce a meaningful quantity that is visible to whoever the investor would be, nobody would believe him.

We must do something that will boost the confidence of foreign investors to bring in their money and technological knowhow to be able to add value and produce the quantity that will meet their requirement. That is why I said the NEPC must come in.

The NEPC is so critical. The Export Promotion Council of Ghana went to TICAD with 40 of their people, I mean the private sector and non-governmental agencies, took them there, paid everything on their behalf because they understand that the private sector is the driver of everything.

The government’s duty is to create a conducive environment, formulate the policy while the private sector drives the economy. In our own case, we (miners) were 10 percent of the people that went from Ghana, not minding that we are the largest population on the African continent.

We were four private operators that went from Nigeria with God knows how many that represented the Nigerian government in the TICAD. And this is where the missing link is and I ask some of the officials of the NEPC, why is it that you were not able to carry your exporters to this programme? They said the problem is that they are poorly funded.

NEPC should be properly funded to be able to promote and carry out its mandate of promoting exportable products of Nigerian origin to the international world.

Don’t the exporters have the capacity to attend such important summits on their own bill?
These are functions of information. These are also functions of a conducive environment. Where these two are missing, there is nothing anybody can do. The information must be available to you and the agency to promote the exporters. They are mandated by law establishing NEPC to add value and fund the exporters. If mining is to be properly developed in Nigeria for local consumption and for export, then the Federal Government must properly fund the NEPC.

What would you say made the Ghanaian delegation to TICAD different from that of Nigeria?
The issue of patriotism and nationality has been at the public domain over a period of years. When you say you are representing your country and you go to such an event and you are representing yourself instead of your country, to me, that is lack of patriotism and nationality.

The whole issue to me is very painful. But, I think that whoever it is, no matter how highly placed you are, for the fact that you come from a nation called Nigeria, and you go out there with tax payers money, the number one thing in your mind should be the nation that brought you to that place.

You said that Nigerian mining products are not known to Japanese investors. Why?
The fact is that the products leave Nigeria without value added. Most of the time, they end up in China or India, where they will now do some upgrade. But Japanese, because of the advanced nature of the country, they want value added products.

They are so concerned about environmental factors and other effects that result from mining, which developing countries can condone, which they can’t condone. And because of their land mass, all they require is value- added products and the interesting thing in dealing with the Japanese is that, they are very straightforward and have human face unlike the Chinese and the Indians.

I have always made my position known that they – Chinese and Indians – are not investors. They are more like ravenous wolves. They are just ravaging our landscape. What they do is to cart away as much as possible the resources until the sector becomes sanitised.

That is why we are advocating to the President that he must of urgency and necessity set up a Presidential Standing Committee to drive and to harness the enormous wealth that we have in mining. The earlier this is done, the better. The eyes of the developed nations are on African nations for their raw materials requirement. And if we miss it now, we have missed it forever. Our children will be the ones to pay for it and at the end of the day they will curse every one of us for not setting the standards that would enable them develop the God- given wealth in years to come.

There is a ministry of solid minerals. Why can’t the ministry make sure that those who are in the mining sector play according to internationally acceptable standards?
A situation whereby there is no synergy between the public and the private sector, what do you expect? A situation where major stakeholders are excluded from the scheme of things because they are vocal, because they are talking about things that need to be put right in order for the sector to be developed..

This why we say, possibly, the ministry that has been in existence since 1995 might have run out ideas and, if that is the case, the President needs to step in. And that is why he is the Commander-in-Chief. He has to step in as a commander and straighten out whatever is wrong in the sector and ensure that the sector contributes generously to the economic development of Nigeria.

The intervention of the President in the sports sector is very interesting because he passionately intervened and we are now seeing the dividends coming out. In fact, we are not saying that the standing committee should be for the boys. It should be men and women, who are patriots; there should be no salary paid to them.

He should make the committee act decisively and correct the things that need to be corrected in the sector. What is needed is just the platform, forget about the money. With time, from the operations of the committee, money will come. $32 billion from Japan as a grant to African, 10 percent of that will take us far. If we have $3.1 billion in Nigeria and you give $1 billion to mining sector, I can tell you that Nigeria will be on the world map of mining. We will turn the entire economy of the nation around for the better.

– Vanguard

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