• Thursday, March 28, 2024
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Nigeria capable of earning $60bn annually from iron ore – geologist

iron ore

Nigeria can earn about $60bn annually from iron deposits in the country, a consultant geologist has said.

This potential can only be realised if the resources are well managed, Oyewola Oworu, a consultant geologist at Walled Resources Ltd, said. He spoke  recently at a one-day sensitisation forum on opportunities in the country’s solid minerals sector, tagged “Potential of the Nigerian Mining Sector,” organised by the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), in Lagos.

Nigeria has identified 34 solid minerals that are available in commercial quantities. These include copper, gold, iron ore, limestone, and dolomite.  The sector is yet to take off fully in the country.

“The sector is not where it is supposed to be because the initial level of legislation and support for local activities were not there and that led to a downturn in mining activities in Nigeria, Oworu noted at the event.

 Abubakar Bawa Bwari, the minister in charge of Mines and Steel Development, noted this January that Nigeria had an iron ore deposit of  over 3 billion metric tonnes amongst other steel-making raw materials.

He expressed concern however over the fact that “out of a global production of 1,689 million tons and African production of 15 million tons, Nigeria only produced an estimated 100 tons.”

Oworu noted at the Lagos event that the present government had stepped up the process of providing legislation and financial support for the sector, which he said would bring investors to exploit the country’s mineral deposits.

 He said the investments would flow into the country because, according to him, a lot of people are eager to buy the minerals. “I can assure you that Nigeria will eventually become a mining destination,” Oworu said optimistically.

In 2012 Ian Bruston, an Australian researcher and businessman, announced the discovery of iron ore of commercial quantity in Kogi State, making it the first ever JORC Iron Ore resources discovered in Nigeria, according to Bruston.

Nigeria is reported to be home to some 500,000 artisanal miners who are not documented, according 2018 report by International Institute for Sustainable Development. But this should not be a source worry for the potential investors because the artisanal miners can only mine the secondary aspect of the mining while the main mining requires machinery and funds, neither at which is at the disposal of the artisanal miners.

 “The artisanal miners are just mining the secondary arrangement. The primary source of gold is buried underground and it will need a huge investment to get into it. In terms of number, the artisanal miners are many but in terms of production, what they are doing is not much,” Oworu said.

 Shehu Sanni, the national president of Miners Association of Nigeria, said that the majority of miners in the country are artisanal and therefore do not have the resources to mine and process.

  Meanwhile, the Miners Association of Nigeria, called on investors from other sectors to show interest in the mining sector in Nigeria in order to make it vibrant.

 “We appeal to other players in different sectors of the economy to join mining industry in order to complement government’s efforts,” Sanni said.

 Reeling out the benefits of investing in the mining industry, Sanni said different vacuums exist in the mining value chain that needed to be leveraged on by potential investors.

 “There is a value chain gap, I can boldly tell you that the industry is in dire need of processed minerals, as we speak, the majority of miners in the country are artisanal and therefore do not have the resources to mine and process.

 “I can tell you that processors make more money than miners. Processing is safer than mining,” he said. “All these Chinese companies that come to buy our minerals, it is not as if they buy them just to sell them that way, they take it back to their country for processing, sell the processed minerals, and make their money,” he explained.

He wondered why Nigerian investors could not process the minerals locally before selling. “There is a need for us to sensitise investors on the benefits in mineral processing,” Sanni added.

 Nere Teriba, vice chairman of Kian Smith Trade & Co Ltd, the company that is at the verge of rolling out Nigeria’s first gold refinery, stated that Nigerians have a lot of expectations from her company and assured that the company would not fail. This is one of the reasons her company carries everyone involved in the gold value chain along, without leaving anyone out.

 “We are positive and optimistic that we won’t fail, we have a refinery and what we have done is work with the full value chain from the miners to the processors, to the suppliers, to the dealers, even banks and dealers,” he noted. “We are not cutting anybody off; we are taking into consideration the specification of dealers, we are even covering the taxes of some miners,” Teriba said.

 While acknowledging the N30bn intervention fund injected into the industry by the present administration, Sanni said the industry needs more money that is strategically inherent in the budget over a period of time, because the one-time N30bn intervention fund is inadequate for the sector.

 “What the sector needs is not N30 billion, but sustainable funding for a very long time. For instance a declaration can be made to say that five per cent of the national budget should be set aside for the development of the solid mineral sector for the next 20 years and implement it properly. This is the kind of investment that would bring life into the sector,” Sanni said.

 Mining sector currently contributes 0.3% to the nation’s Gross Domestic Product (GDP), according to government figures.  However, Bwari expects this to rise to three percent by the end of this year, and 10 percent at end of 2025.