• Thursday, December 07, 2023
businessday logo


Why Nigeria’s solid minerals sector is crawling

FG in pact with PwC on solid minerals roadmap

Nigeria, which boasts 44 different types of minerals in commercial quantity, did not earn a trillion naira in total revenue from the solid minerals sector in 15 years.

Data obtained from the Nigeria Extractive Industries Transparency Initiative (NEITI) revealed that the sector contributed N818.04 billion ($3.2 billion) to the Federal Government’s receipts between 2007 and 2021.

Nigeria has gold, manganese, bitumen, lithium, iron ore, lead, zinc, limestone, uranium, gemstones, coal, topaz, and copper in commercial quantity in over 500 locations in the 36 states and the Federal Capital Territory (FCT).

According to the National Bureau of Statistics, the country earned N60.11 billion in the first half of 2023, accounting for 0.56 percent of total trade.

Read also: World’s most-wanted mineral offers Nigeria chance to cash in

The solid minerals industry report by NEITI showed that the country made N121 billion in 2021, accounting for a 51.89 percent increase from the previous year.

NEITI revealed that only limestone and granite were the most produced minerals in 2021, accounting for about 74.4 percent of total production. However, the sector contributed a meagre 0.63 percent to the country’s economy.

“Improving the contribution of the solid minerals sector to the economy would require significant efforts in terms of infrastructure development, exploration and mining activities, investment attraction, and policy reforms,” said Umar Oba Adelodun, vice president, commercial at OAT Ltd.

He said the government would need to provide adequate support and incentives to encourage both local and foreign investors.

“Additionally, there should be a focus on improving the regulatory framework, addressing issues of illegal mining, and promoting sustainable practices in the sector,” he said. “With a comprehensive and strategic approach, Nigeria can make significant progress towards reaching its target.”

Exports and destinations

NEITI said China accounted for 95 percent and 88 percent of the total export volume and value, respectively, in the period. Others are Malaysia (4.64 percent), Korea (1.41 percent), Thailand (1.17 percent), and the UAE (1.11 percent).

The industry report showed that 143,000 tonnes of minerals were exported during the period.

States’ contribution to production

According to the report, Ogun, Kogi, Edo, Cross River, and the FCT were the top solid mineral-producing states in 2021, with a total contribution of 66.49 percent to total production volume.

Contribution by geopolitical zones

The North-Central, South-West, and South-South contributed the most to the total production with 31.2 percent, 30.5 percent, and 23.7 percent, respectively, in 2021. On the other hand, the South-East contributed the least, at 0.94 percent to production volume and 0.9 percent to royalty.

Licence issuance improvement

The number of artisanal minerals operators increased by 85 percent to 2,336 across the country. NEITI said there was no commensurate data in production, royalty payments and exports, among others, to support this increase in operators.

Dele Alake, minister of solid minerals, recently unveiled a comprehensive policy directive on curbing illegal mining and formalising the sector, among others.

“The ministry has to take the bull by the horns if the country must reap the harvest of the trillion dollars worth of minerals under the ground across the country. To achieve this laudable objective, there has to be a paradigm shift in the strategy by re-positioning the sector in terms of the human and capital factors that can drive its transformation,” the minister said.

Read also: Nigeria generated N814.59bn from solid minerals in 15 years — NEITI

“Mining is big business. Nigeria must assert its presence in this environment by replicating its strategic positioning in the petroleum sector by setting up a corporate body that plays in this field. Consequently, the ministry shall work towards the incorporation of the Nigerian Solid Minerals Corporation,” he added.