• Thursday, July 25, 2024
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Investors eye mining sector on bankable data

mining sector

As Nigeria readies to diversify its economy through the solid minerals sector, investors are asking the Federal Government to spearhead the gathering of geological data to the point of bankability to enable them pump billions of naira into the industry.

According to the investors, the Federal Government should be able to sell such data to local miners and prospective investors to enable them have the right information and a clear view of what is required when they come into the local mining industry.

They also say that as is done in other parts of the world, government must lead this investment campaign by first opening up the sector to enable manufacturers who will use the mined minerals as raw materials for local industry.

This means there must be a development plan for the industry, which will also detail the Federal Government’s financial commitment within a specified period of time. 

“Government should be able to conduct a bankable and detailed exploration report,” said Shehu Sani, president, Miners Association of Nigeria (MAN) in a telephone interview with BusinessDay.

“In other parts of the world, government spearheads geological data generation to the point of bankability and sells such data to miners. This is what investors are asking for. “There is a firm in Ogun State, which did an exploration for four years. After the exploration, it discovered 600,000 ounces of gold in Nigeria and today these ounces of gold are quoted in the London Stock Exchange. This is the way to go and what we mean by bankable data, ” Sani told BusinessDay.

Data shortage remains one big clog in the wheel of progress in Nigeria’s mining sector, as key information required to make investment decisions are mostly lacking. Owing to the obsession with crude oil, Africa’s biggest economy is still relying on research done in the industry in the early days of independence, which does not reflect current realities.

Bankable data helps facilitate discovery, exploitation, value addition and sustainable development of solid minerals, which still contribute less than one percent to the gross domestic product.

Kayode Fayemi, minister of solid minerals development, had acknowledged in his inaugural media briefing, that despite that the country has some geosciences data, it is still heavily reliant on work done 30 to 50 years ago to estimate its reserve potential.

Nigeria has 44 identified solid minerals, but fewer than 15 are being mined, processed and marketed. Experts say there are many mineral deposits in the country yet to be discoverded.

Some of the minerals found in the country include kaolin, baryte, limestone, dolomite, feldspar, glass sand, ganstones, gold, iron ore, lead-zinc, tin (and its associated minerals), and gypsum.

According to the NBS, Africa’s largest economy loses $1 billion annually from its inability to exploit and export coal, which is in high demand in the international market, owing to its low sulphur.

“The problem here is that there is inadequate data that can be relied upon for investment decision,” said Patrick Odiegwu, partner in Anthracyte Limited, a general earth science company.

“Banks have not provided support, maybe because they do not understand the industry. We also expect a development of market-to-site extension services,” Odiegwu told BusinessDay.

Manufacturers in the non-metallic products industry  such as cement, glass and ceramics have pumped in huge sums of money in developing minerals such as limestone, gypsum, quartz , among others. This has boosted local input preference and halted the search for the foreign exchange with which to import these inputs.

Already, cement makers such as Dangote Cement, Lafarge Africa, BUA Group, among others, are expanding operations in areas where there are solid minerals availability. This has created thousand s of jobs in the economy.

“We have a lot of limestone 70 kilometers from Yola. Dangote is already showing interest. I know if it is not bankable, Dangote will not be showing interest,” said Abdurahaman Modibbo Girei, president, Adamawa Chamber of Commerce and Industry, in an interview with BusinessDay.