Nigeria: Govt set to issue coal mining licenses to power generating firms

*Dr. Kayode Fayemi, Nigeria's minister of Solid Minerals.

*Dr. Kayode Fayemi, Nigeria’s minister of Solid Minerals.

…Denies concession of Ajaokuta Steel mill

Oscarline Onwuemenyi

16 September 2016, Sweetcrude, Abuja – The Federal Government, yesterday, said that coal mining licences would be issued only to companies that are interested in generating electricity from coal.

It also declared that it has not concessioned the Ajaokuta Steel Company and that it is currently undertaking a technical audit of the facility to determine structures that are on site.

The Minister of Mines and Steel Development, Dr. Kayode Fayemi, who noted this while speaking at a forum in Abuja, heralding the forthcoming Sustainability in the Extractive Industries (SITEI) conference, said the Ministry is working in tandem with the Ministry of Power, Works and Housing to ensure that coal accounts for 30 percent of the country’s energy mix.

He also said that since the inception of the current administration, no licence for coal mining had been issued that is not for the purpose of power generation.

Fayemi, who was represented by his Technical Adviser/Chief of Staff, Mr. Egghead Odewale, noted that one of the several processes for the issuance is that applicant must have power generating licence before they can get a licence for coal-mining in the country.

He said, “The Ministry of Mines and Steel Development has dedicated coal deposits in the country for power. Licences for mining of coal deposits would only be issued to those who want to generate electricity and we are collaborating with the Ministry of Power, Works and Housing on this.

“Since the inception of this administration, no licence for coal has been issued that is not for the purpose of power generation, so if you acquire a licence for mining coal you have to also have that for power.

“As far as we are concerned in the Ministry of Mines and Steel, the process is easy: once an application is filed and is not encumbered by any other issue, legal or existing to the holder of the licence, the licence is issued; but it must be for power generation.”

On the licensing process, he explained that once the application was filed and it did not have any legal or existing issues to the holder of the licence, it would be awarded. He added that it must, however, be for power generation.

Fayemi stated that despite the stand of the Federal Government in this regard, a number of companies have applied for a licence through the Ministry of Power, Works and Housing.

Speaking on the Ajaokuta Steel complex, he said, “Ajaokuta Steel Company Limited has not been concessioned. What happened is that the original concession agreement that was signed between the Federal Government of Nigeria and Global Steel Holding Limited and Global Infrastructure Nigeria Limited has been modified.

“It has been modified to decouple Ajaokuta Steel Company Limited from the Nigerian Iron Ore Mining Company in Itakpe. What that also portends is that Global Infrastructure Nigeria Limited now has seven years; the remaining seven years of the original concession to complete the mining operations to operate NIOMCO in Itakpe, whereas Ajaokuta has reverted to the government of Nigeria. So it is now being held by the Federal government on behalf of Nigerians.”

Also speaking at the forum, Technical Adviser to the Minister of Mines and Steel Development, Mr. Linus Adie, stated that the Federal Government is in talks with some Germans interested in building coal power plants in Nigeria.

He added that the Ministry is collaborating with the Ministry of Power, Works and Housing to create coal development clusters that will ensure the use of the commodity in an environmentally-friendly manner and also guarantee coal-to-power.

Speaking in the same vein, Mr Ogbonnaya Orji, Director of Communications, Nigeria Extractive Industry Transparency Initiative, NEITI, noted that the organisation would focus and increase its partnership with the Ministry of Mines and Steel Development to see how Nigeria could channel its energy and attention to the solid mineral sector that had been neglected over the years.

Orji pledged the organisation’s support to sustainability in the extractive industries (SITEI) programmes and operations.

He said one of the challenges NEITI had faced was in disseminating reports that focused on the issues in harnessing the opportunities and potentials in oil, gas and mining sector. ” We have had very limited channels and platform to disseminate this information so when we come across very credible organisations like SITEI, we leverage and partner with them.

“We use their channels, their stakeholders and events that they organise such as the series of conferences they organise to reach out to those we cannot ordinarily reach.

He said NEITI would focus its partnership with the ministry to see how Nigeria could channel its energy and attention to the solid mineral sector that had been ignored over the years.

On her own part, Ms Bekeme Masade, Executive Director, CSR-in-Action and Convener SITEI, said this year’s conference is focused on revitalising the Nigerian economy beyond oil, prospects for a thriving export-driven extractive sector.

She explained that at a time like this when Nigeria was in doldrums over the lack of funding in oil and gas, it was the prime time to look into the mining sector and resource governance.

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