18 February 2016, Sweetcrude, Abuja – The Minister of Solid Minerals Development, Dr. Kayode Fayemi has said the administration wants to secure quick wins that will ensure immediate and medium term benefits to the solid minerals sector in the country.
Fayemi, who spoke at a recent briefing in Abuja, expressed dismay that the sector, despite its immense potentials, was operating at below capacity and with sub-standard mining techniques and processes that must be upgraded in order to reduce incidence of mining site waste, and boost productivity and output.
He said, “In all my years in politics and the professions, not many issues have had a sobering effect on me as what I have seen for myself and learnt since I resumed this assignment (as minister). For example, it is a collective shame for us that such a massive project as the Ajaokuta Steel Plant can be allowed to remain moribund in spite of our sovereign resources that have been invested and its immense potentials.”
According to the minister, “It is no news that Nigeria has tremendous mining endowments. Today we have at least 44 known mineral assets that include precious minerals, base metals, bulk minerals and what are known as rare earth minerals. More specifically, our more promising mineral assets incude gold, iron ore, barite, lead, zinc, tin and coal.”
He added, however, that based on current data, Nigeria’s solid minerals sector makes up about 0.34 percent of gross domestic product (GDP). “That means that based on current official rates, the mining sector contributes N400 billion in value to the economy. While that is a significant role, it is smaller than its true potential as the vast majority of our mining assets have yet to be exploited.
“In fact, what has been happening is the sector has more or less been operating sharply below capacity, with many mining operations manned by small scale artisanal miners as opposed to large scale players.”
He noted that the trajectory of the country’s extractive industry has not been without controversy, adding that, “We are all witnesses to the challenges in the oil industry over the past few decades. More recently, we have seen significant challenges in the gold, lead and zinc mines of Zamfara where illegal mining without clear understanding of how to handle poisonous material such as lead has had an incredibly devastating consequences.”
Fayemi noted that the Ministry has developed a framework strategy to drive growth in the mining and minerals sector. “Our strategic aspiration is to build a sustainable, globally competitive mining sector, and related supporting sectors that will prudently use the finite resources available to improve the quality of life of Nigerians.
“We will focus on supporting and growing Nigeria’s position in mineral assets with commercially prove reserves. Our assets will then be used to serve two key markets: a domestic industrialisation market that is more beneficiation focused; and an export market that is more focused initially in the export of ores and raw materials.
“The mix of investors that will target Nigeria will reflect that preference of serving both the domestic and export markets. We anticipate that as we expand our geosciences database and insights, we will also expand what minerals we compete in,” he added.
The Minister further noted that Nigeria will focus on “going to the market as a quality and cost leader, rather than a scale based operation, pending further understanding of our reserves position. Be that as it may, we are interested in building a profitable solid minerals industry, not the largest in the world, hence we will always make shrewd decisions with our partners, communities and other stakeholders.
“For example, we will rather be the most competitive gold producer in the world and serve only a fraction of supply, than be the biggest producer and have equity investors generating losses.”
Fayemi noted that given the where to play and how to win choices, the role government would be to invest in activities and levers that reduce cost of doing business, and improve Nigeria’s perception as a high quality mining destination. He pointed out that over the next few months, the ministry would conduct additional analysis to refine its strategies and the policy regimes that would emerge to support and accelerate the execution of the strategy.
The road to achieving a leaner, more efficient and more focused mining and minerals sector, Fayemi contended, will start with exploiting some “low hanging fruits” that will accelerate investor confidence in the mining markets, and get the sector growing and jobs created. He said the government was ready to offer support to miners who are close to production but facing one or two administrative issues.
“We are setting up a new investment team that will help such companies over the line and into production mode. We will also engage rapidly with key Nigerian companies that are today importing raw materials that can be supplied domestically, for example, coal for cement kilns. That import substitution push will be a quick medium-term win. The team will also start working closely with foreign investors who need guidance to launch operations in Nigeria,” he added.
The Minister added that in the coming weeks, the ministry would launch a series of targeted sessions with investors, communities and other parties to continue that have begun since the new administration came to office.
“Our focus would be on ensuring that we are listening and acting as well in the best interest of committed partners. As much as possible, these sessions will be used to refine our thinking as well as solve problems,” he stated.