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Solid Minerals As The Next Cash Cow

Posted: Feb 29, 2016 at 11:55 am   /   by   /   comments (0)

It feels good that President Muhammadu Buhari’s commitment to diversifying the country’s economy from oil and gas to solid minerals and agriculture is gradually becoming a reality.  Since his inaugural address to the nation on May 29, 2015, the president’s resolve in this direction has been unflinching.

While presenting the 2016 budget at the joint session of the National Assembly, the president reiterated this and expressed hope of partly funding and implementing the budget from the solid minerals sector in due course.

To build momentum and further demonstrate this commitment beyond mere words, the Minister of Solid Minerals Development, Dr. Kayode Fayemi recently invited the 36 states to collaborate with the Federal Government on solid minerals development. The Minister in a meeting with officials of the Miners Association of Nigeria, MAN, pointed out the necessity of the Federal Government collaborating with the states, mining communities, foreign investors, financial institutions, and the World Bank, in achieving the sector’s desired goals, especially for wealth and job creation and for national development.

These developments, no doubt, are sufficient positive signs to raise optimism and leave stakeholders in a positive mood. We believe these dexterous initiatives constitute a clear departure from the unrewarding past, and should be a strong pointer that the Ministry of Solid Minerals Development could be valuable after all.  The Nigerian Minerals and Mining Act of 2007  further provides the pivotal springboard to put the country once again on the path to providing a transparent and workable regulatory and policy environment for private sector-led mining.

The existence of companies such as Tongyi Allied Mining, Dangote Group, Segilola Gold, Kogi Iron Mines, Multiverse Resources, and Australian Mines Ltd in the mining sector attests to the fact that all hope is not lost, although much more could still be achieved with the right environment.

However, it must be emphasised that it goes beyond mere wishes.  Inhibiting factors such as limited infrastructure, insufficient geological data, low productivity, poor funding, limited cooperative federalism, illegal artisanal mining and community challenges, weak institutional capacity, and perception, still remain critical issues to be addressed, if the country must make headway in the sector.

The hurt that the absence of convincing power supply has done to the economy remains yet to heal. The competitiveness of the business environment must be worked on, to make the Nigerian market a place of first choice to investors. There is a need to match the country’s profile as Africa’s largest economy with investors’ expectations. So far, the road to mining prosperity has been tortuous for the country’s pioneer miners, as companies that have kept faith with Nigeria have struggled to respond to exogenous and endogenous challenges in the sector. 

Analysts believe that this latest initiative further confirms government’s resolve to optimally unlock the lush opportunities dotting the country’s landscape by exploiting her natural resources to stakeholders’ benefit.

According to information posted online by Corporate Nigeria, We are aware that coal, tin, lead, zinc and columbite once featured prominently among the country’s natural resources, mined on a very large scale and were significant sources of income earned from exports before oil was discovered. Research has shown that the economy depended mainly on the exploitation of minerals, such as coal, tin, bauxite, gold and tantalum.

Oddly enough, the sector that should be money-spinner has suffered neglect since Nigeria became a member of the Organisation of Petroleum Exporting Countries (OPEC) in 1971, contributing a dismal N400 billion to the country’s gross domestic product over years.

South Africa is a world leader in mining and remains famous for its abundant mineral resources that rank it number five in the world’s mining sector, in terms of GDP value, with the economy built on gold and diamond mining.

We support the minister’s call to state governments to either set up investment companies or partner the private sector to exploit the solid minerals deposits in their domains as the right way to go. This is good as states pine in search of solutions to the crushing weight of economic downturn and the need to reverse their dwindling revenues from the federal allocation and Internally Generated Revenue (IGR).

With the fresh initiative by government, we believe the sector would be strengthened enough for jobs creation, investment, foreign savings, industrialisation, electricity and revenue generation. This is expected to enhance the economy’s absorptive capacity and open new vistas of opportunities in today’s emerging realities.