A Review of the Nigerian Energy Industry

NEITI Report: Gold, barytes mined without royalty paid to govt

NEITI30 June 2014, Abuja – A new audit report of operations in Nigeria’s solid minerals sector which was undertaken by the Nigeria Extractive Industries Transparency Initiative (NEITI) for the year 2011 has disclosed that gold and barites are mined across the country and exported without records of royalty payments to the federal government.

The report, which succinctly indicted various agencies of government involved in the management of activities within the country’s solid minerals sector of poor synergy in their related responsibilities, also noted that aggregated revenues received by the government in 2011 was significantly higher than what it got in previous years.

A summary of the audit report was recently presented to the public by the Executive Secretary of NEITI, Mrs. Zainab Ahmed in Abuja.

It stated that the government earned a total sum of N26.9 billion from mining of solid minerals across the country in 2011, out of which N26.8 billion represents funds paid by companies in the sector.

The report also showed that Nigeria exported a total of 7,115,088.50 metric tonnes of solid minerals, all of which were valued at N11.9 billion during the period but that a review of the Central Bank of Nigeria (CBN) and Nigeria Customs Services (NCS) records on exported minerals showed that there were discrepancies in the value of exported minerals as well as the associated companies.

While speaking on the outcome of the audit, which covered a total of 87 companies on the materiality level of N1 million and above as defined by NEITI, Ahmed said: “The report contains dependable information and data, outlined salient observations and insightful findings. It also made far reaching recommendation.

“It observed that there is poor synergy between the various government agencies such as the ministry of mines and steel development, CBN, NCS, Nigeria Export Promotion Council (NEPC), Mining and Cadastral Office on tracking records and revenue on exported solid minerals.”

“It noted that despite the fact that gold and barites were mined across the nation, there were no records of any royalty or similar payments,” Ahmed added.

On the key recommendations contained in the audit report, Ahmed said there was a need to check the incessant smuggling of solid minerals out of the country through deliberate creation of boarder market at strategic boarder points across the country.

She thus said: “Minerals analysis laboratories that meet ISO certification standards should be established in each of the six geo-political zones of the country for the purpose of analysing minerals extracted or discovered.
“It recommended that the existing laboratories such as the National Metallurgical Development Centre Jos, National Iron Ore Mining Company Itakpe and the National Steel Raw Materials Exploration Agency Kaduna should be upgraded and equipped to conform to international standards.”

Similarly, the report requested for greater scrutiny of the activities of foreign nationals operating in the solid minerals sector; it recommended for stringent regulation of their activities in line with best practices in the industry, in addition to improving transparency, independence and operations of the Nigerian Mining Cadastral Office (MCO).


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