Global miners shun Nigeria as policy, knowledge gap hurt investment

International miners such as Barrick, Astra, Newsmont and Mitsubishi Materials are avoiding throwing money into Nigeria as a result of unclear policy.

They are also worried by the poor level of knowledge shown by Nigeria’s mining administrators and the government officials who fail to understand that they must first pursue companies well known for exploratory activities, to invest.

There is also a poor knowledge of Nigeria’s solid minerals viability and marketability in the global space.

Experts say part of the problem is also that investors see Nigeria as an oil nation only, rather than a country with strong solid minerals potential, as they prefer countries such as South Africa, Democratic Republic of Congo, Ghana, Tanzania and Zimbabwe, who are known to have developed mining infrastructure.

“Once you are seen to have certain negative characteristics, nobody will come to your country,” said Ibrahim Garba, an expert in mining and vice chancellor of Ahmadu Bello University, Zaria, who spoke to BusinessDay in Kaduna.

“The investor has a choice as to where to go. We must realise, understand and deliver what the investor wants. If your country has a reputation for instability, no investor will come, and if you do not have a good educational system that will give the investors cheap labour, he may not come because it is expensive to bring in foreign labour to work on mining sites,” Garba said.

Research has shown that Nigeria has up to 43 minerals, some of which are not mined. Between 1993 and 2012, mineral prices were high in the global market but have been declining since 2013.

Inspite of the declining prices, some Chinese, Indian and Lebanese companies have liaised with several local communities in the northern part of the country to illegally mine minerals, walking off with large chunks of money, while denying government of its royalties.

“The first thing for government to do, to attract investors is to have a reliable, bankable and detailed exploration or geosciences data,” said, Shehu Sani, president, Miners Association of Nigeria (MAN).

In other parts of the world, government spearheads geological data generation to the point of bankability and sells such data to miners,” Sani told BusinessDay.

Africa’s largest economy is hard hit by declining oil price which has hurt Federal and state governments’ revenue. Many states have proven to be unviable, as they fail to pay workers salaries. While the Constitution still puts issuance of mining rights in the hands of a federal minister of solid minerals, states have failed to make something from what they have in their backwards, by not doing enough to communicate them to investors.

“States can liaise with the private sector to harness solid minerals in their backyards,” said Seun Olatunji, president, Association of Metal Exporters of Nigeria.

According to Olatunji, with not less than 38 viable solid mineral deposits in sustainable export quantity in Nigeria, the solid minerals sector has the potential to generate not less than N5 trillion annually, once the government puts necessary things in place.

Olatunji points out that the solid minerals industry could serve as the much-needed solution to unemployment, as the development of the value chain from mining to export can create more than five million jobs.

Bassey Edem, president, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), says diversifying into the solid minerals sector will lead to social-economic development, as doing so will bring the much needed development in the hinterlands.

“There are tremendous investment opportunities for investments in the solid mineral sector in Nigeria.  Solid minerals can contribute significantly to the GDP of Nigeria, as is evident in countries like South Africa, Russia, Australia, Ukraine and Guinea, which have gone down this path,” Edem said.

ODINAKA ANUDU