Licensing bottlenecks, skills gap stifling miners

Nigerian miners say over-centralisation of rights acquisition for mining purposes by the Ministry of Solid Minerals is hindering the growth and development of the industry, resulting in losses estimated at over N8trillion.

They add that skills shortages in the industry, along with lack of finance and neglect of the sector, are stifling investment, revenue opportunities and jobs that the country could have gained from the industry.

“What you find in the sector is that it is too centralised, such that a miner in Gombe State will have to travel to Abuja to obtain licenses,” said Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry.

“This means the issuance of mining rights needs to be decentralised so that states too can issue licenses,” Yusuf observed.

He further said the industry is capital-intensive and requires heavy financing that will enable stakeholders cater for huge logistics costs involved in the sector.

The National Bureau of Statistics (NBS) says Nigeria has 34 identified solid minerals, but only 13 are being mined, processed and marketed.

For example, the country loses $1 billion from its inability to exploit and export coal, which is in high demand in the international market, owing to its low sulphur, according to the NBS.

In nominal terms, mining and quarrying recorded a negative growth of 14.68 percent (year-on-year) in the Third Quarter of 2014, 3.58 percentage points lower than the growth in the corresponding quarter of 2013 and 27.90 percentage points higher than growth recorded in the Second Quarter of 2014, according to the NBS.

Sani Shehu, president of the Miners Association of Nigeria, attributes the problems in the sector to neglect.

At a training workshop for miners in Jos this month, Sani said finance is a big bottleneck in the industry and called for a specialised financial institution to fund mining activities, raise prospects for individual miners and upgrade mining as a viable alternative to oil.

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“We ask that there should be a development bank, not commercial bank, because commercial banks are yet to understand us. Government should establish a Mining Development Bank to identify the needs of miners and work at meeting such needs,” he said.

He also said that insecurity in the north has  stalled investment in the industry.

Abdurahaman Modibbo Girei, president, Adamawa Chamber of Commerce, told BusinessDay that finance and neglect have also contributed in capacity underutilisation in the sector.

“A survey carried out by competent miners showed there are 13 minerals in Adamawa but none is still exploited. Many artisanal and small-scale miners do not have sufficient capital to mine in commercial quantities,” he said.

Nigeria loses foreign exchange worth over $300 million annually to Asia and Europe, as a result of its dependence on the importation of ceramics. Ceramics, like cement and glass, is made of solid minerals such as quartz and silica, which are locally available in the country but are not fully developed.

Experts blame this on the absence of skilled manpower to mine the available minerals to serve the local industry.

“Take ceramics as an example, what you have is lack of significant number of professionals with appropriate skills and expertise to exploit the feldspar, quartz, silica and other minerals needed in the non-metallic products sector,” Patrick Oaikhinan, CEO, Epina Technologies Limited and professor of ceramics engineering, said.

‘’What I think we need now, are the enabling laws to encourage investors,” Oaikhinan said.

He stressed that the skills gap is worsened by the absence of specialised institutions to train personnel on solid minerals exploitation.

Solid minerals such as kaolin, baryte, limestone, dolomite, feldspar, glass sand, ganstones , gold, iron ore, lead-zinc, tin (and associated minerals), and gypsum, among others, are found in various parts Nigeria.

Apart from the loss of $1 billion annually, Nigeria can develop coal as an alternative power source, as the country has an export capacity or potential of 15 million tonnes per annum.

Analysts say a closer look at the sector can reduce employment and increase the GDP.

“The development of the solid minerals sector could help to combat poverty in Nigeria via job creation; especially, given its forward linkage with other sectors of the economy.

“Most importantly, it could help alleviate some of the problems associated with the ‘enclave’ nature of the Nigerian economy that has for too long been vulnerable to fluctuations in global oil prices,” said Olumide Ayodele, Sabastine Akongwale and Udefuna Patrick Nnadozie, in their paper entitled,  ‘ Economic Diversification in Nigeria: Any Role for Solid Mineral Development?’.

ODINAKA ANUDU