Uban Saidu Malami, President, Geological Society of Nigeria (GSN) in this interview with BusinessDay’s John Osadolor, speaks on why more investors are not playing in the Nigerian mining sector and the role of the geologists in national economic development…Excerpts
Why are there no known big names in the mineral resources industry and what are you doing to address the challenge in Nigeria?
Statistical data from the NBS shows a very dismal contribution of the mining sector to the GDP. In fact, it has never gone up to 0 .5 percent. There is a lot of activity in mining communities in Nigeria, in fact, you have a site with about 5,000 to 10,000 people, and you wonder why all that doesn’t add up.
Well, mining in Nigeria, is almost 70 to 80 percent artisanal, made up of small-scale miners. The biggest mining companies in the world have not found their way into the Nigerian sector. And why is that so? I’m always quick to have a comparison between solid minerals and oil and gas. Why are the Mobils and the Chevrons, the Shells in Nigeria? They’re here because the oil and gas sector has a very clear, articulate policy of engagement with foreign companies.
It also has a deliberate incentive for investors, and that didn’t happen immediately; it happened over the years and it took reviews and reviews of various policies in the oil and gas sector including the Petroleum Industry Act (PIA), but of critical significance and importance is what we had our roundtable on. Our roundtable was born out of a clear conclusion that was reached by some of the key management consultants engaged in the mining sector in Nigeria over the years.
The PwC had an article directed to the new government, and the conclusion was that there is a need to develop geo data. The KPMG report that I read, reemphasise that, but this is just in congruence to what we know as geologists. There hasn’t been a deliberate input of resources, like there had been for oil and gas. The Department of Petroleum Resources (DPR), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), have today in their kitty, data of almost every identified oil block that has been generated by competent geological organisations. And this is what they trade off for potential investors. So, when you’re interested in Nigeria’s oil and gas, you pay a non-refundable sum that allows you to go into the data room and you look at the oil block you’re interested in, you assess the report and then make your bid. Up until last six years, Nigeria never deliberately took an amount of money in developing a geological data of a particular mineral to the depth that will attract foreign investors.
In the last seven years, there was a deliberate plan called the NIMEP; Nigeria Integrated Mineral Exploration Project, and a paltry amount, compared to what is expended in other climes of $30 or to $40 million was used on certain minerals. So, that preliminary data generation report that the Nigerian Geological and Survey Agency generated, believe me, the whole industry was shaken by the amount of excitement that it attracted; because for the first time, there’s a geo data that has been generated. But we could do more, in mineral exploration, the exploration itself is where government intervenes to de-risk the sector. For me, I think that is fundamentally missing, as an attraction to big players in the mining sector. But critical of note, is the fact that there is an epidemic of mining malpractices by both illegal and legal miners.
And to be honest, I think it’s not far-fetched, if you open the newspapers every day, you’ll read about communities and state governments, and even the federal government complaining. So it’s about time that that sector is looked with very critical eye; and the professionals are given their right of space. Therefore, for any mining pit, there is a professionally acknowledged geologist or mining engineer who has the seal of the council of mining, engineering and geosciences that must have been accredited or approved for the practice of mining. Therefore, I think such professionals must be called to responsibility; and until you professionalize the sector as effective as it should be, we will be running round circles to identify what the problem is. Truly, today, mining has been associated with not just environmental damages, but even banditry and insecurity. So, there is a clear challenge in the sector.
If you were to advise the new government, what would you say it should do, as both President of GSN and a geologist?
The reports from development partners and consultants are very indicative of what is required to be done to trigger international interest. And why you need the bigger players is that, it will help the local players learn how big mining is done. There are a lot of arguments in that regard that we can build our smaller miners to the level of big. But I told them, why change a winning formula? In the oil and gas sector today, the owners of all the marginal fields and other fields are ex-shell, ex-mobil; and that’s because they used the opportunity in learning the model and have access to international markets and understand the game. I think we shouldn’t shy away from the fact that we need foreign big players in the mining sector to come in and help in developing the culture of big time mining in this country. So, yes, we need to tap BHP, Glencoe and the rest of them to come on and offer an honest and a fair, sustainable mining practice to engage with Nigeria and open an international mining corridor from our country today.
There are individuals that are prosperous in the mining sector, but they’re minimal compared to what we can achieve in terms of employment, in terms of skill transfer, and so many other things when we get these big players in. I will also seize this opportunity to advise government that there is need to take mining seriously, it is not just for an economic or social impact, it has what is considered today as geopolitical significance. It’s not every country and everybody that you can allow into your mining space. Most of these minerals, believe me or not, find themselves into the military industrial complexes used for making bombs and guns. So, you will have to be interested in tracing where your minerals go, and to the guy that will do the guns. So, there is geopolitics in mineral management and mineral administration, and I think is even more significant than any other factor for consideration.
If you don’t have a geologist that will understudy your geo data in establishing the proven reserves on which you’re building your business case on, you will have a problem of underperformance of that mine, or in fact, a failed mine because the geologists have not been thorough, and the mine has not been evaluated by somebody of knowledge.
Today, if you are in the mining space, you will know that the Western world and China have been at loggerheads in trying to control certain minerals, especially what is considered critical for the telecommunication sector, military and for other Nano technologies that are going on today. So, it is about time that we that are controlling the crude minerals put into clear consideration in negotiating who we will allow within our space and that for me, is a more critical consideration going forward.
Talk us through the aims and objectives of Geological Society of Nigeria (GSN).
The Geological Society of Nigeria, as contained in the memorandum of articles that was used in its registration, is primarily focused on the professional geologist. Why that is necessary is that, we wanted to clarify and also embolden the geologists that have been contributing to national economy, because we are mostly mistaken as miners, as geo-scientists and all sorts of names. But I’ve also agreed with my colleagues to look at our circumstance in comparison to other countries, and we saw clearly that geologists are heralded with their responsibilities, and they are called with their names in other countries.
The highest society that a geologists can belong to in Nigeria is the Nigerian Mining and Geoscience Society, which is the overall body for both mining engineers, geo-scientists, hydrologists and geologists. Under that organisation, you have other specialised groups; like economic geologists, and hydrologists. But there is no umbrella body for geologists as it is, and that was inspired when I actually called for a meeting of my class of ’86. And I realised that this was the first time we were meeting exclusively as geologists; and we have our unique challenges, we have our dreams, we also have professional discussions that are uniquely for geologists.
I started thinking and shared with all my colleagues that, in all the countries of the world you have the Geological Society of the United States, Geological Society of UK, Geological Society of South Africa, Geological Society in Tanzania, and so many others. How come we don’t have a Geological Society in Nigeria that can articulate our unique position? And we have easily been assumed to be miners. Mining is actually an extractive act, we are exploring the earth; if there’s anything that a geologist is expected to do, it is to preserve the environment and the earth balance. So, you will have geologists in the seismic centre to manage earthquake and measure earthquake activity.
You will have geologists in astronomy to compare Earth and other planets in the universe, you will have geologists in water; so we have hydro -geologists, who are basically doing seismic positioning. You have geologists in petroleum, they locate where the major petroleum reserves are. So, geologists have a broad application, so if we do not have an umbrella body for these various exciting earth experiences, it will be very hard to go forward after your first degree in Geology in appreciating the other aspects.
Secondly, and most importantly, we are hoping that the Geological Society of Nigeria will give a fresh graduate a broad insight of the various options he has as a geologist, especially as it affects, which sector or which industry, he would want to pursue a career. So, he has a place where he can go and he has a pizza pie of various industries that a geologist can work. I am one of the victims of the fact that I couldn’t clearly tell where I can deploy my skill to, so I don’t want that to repeat for any young geologist. I want the geologist to understand that he or she can be an astrologist; he can be a gemstone and jewelry maker, and he can be a hydro-geologist. That is the essence of our society.
Believe me, geologists are in banking, and in the stock exchange. We need geologists in the customs; today, we are complaining that people are smuggling minerals, if you don’t employ geologists in the customs services, you wouldn’t even understand what type of stone that is being traded on. So, that’s our excitement, which we have just found out that there is need for people to be aware of this special profession, and they should be given space in participating and adding value to our country.
Most of the geological or mining companies in Australia or New Zealand raise their funds in the stock exchange, in the capital market, and in the money market. If you don’t have a geologist that will understudy your geo data in establishing the proven reserves on which you’re building your business case on, you will have a problem of underperformance of that mine, or in fact, a failed mine because the geologists have not been thorough, and the mine has not been evaluated by somebody of knowledge.
So, those are the gaps we see, not just in the mining industry, but even in water, and banking. You carry your geological data to a bank and you want financial support, there’s hardly anybody that can interpret that professionally, and question it as it’s supposed to be other than a geologist. So, we have our space and our gap to be filled. We have a lot of universities in Nigeria today that offer geology, and they are tilted towards certain biases; either they are doing geology to promote general ecology, or they’re doing geology and mining. But geology is actually the study of the earth, and as I speak with you today, we also realize that sometimes it’s a bit late studying geology in university. So, we’re launching our Junior Geology Club for secondary school so that they will start understanding their environment, and maybe we’ll be able to inspire young people to look at the course. Most of us actually met geology in the university, but principally, it is a course that entails physics, chemistry and biology.
What is the greatest challenge facing the industry or geologists today? Your class of ’86 started the GSN initiative, have you been able to bring in other graduates of other universities?
Let me just quickly correct that the ABU class of ’86 gathering inspired me, so it wasn’t sold to all of them. It was just the gathering that inspired me. It might interest you to note that among the trustees of the Geological Society of Nigeria is a graduate of University of Port-Harcourt, even my classmates are not part of the trustee team that incorporated Geological Society of Nigeria.
Geology is a highly specialised field of study or knowledge. So, you need a society that is deliberate at conducting continuous professional development, at administering and enforcing standards of etiquette in the promotion of transparency and integrity of reports by geologists nationwide. We saw those gaps; with the over 10 -15 societies that geologists belong to, there is no one that anchors only for geologists. The Nigerian Mining and Geoscience Society (NMGS) is responsible for geologists in the mining sector, but geology goes beyond the mining sector, and we felt that there will be need to have a body that encapsulates all of us.
So, what we intend to achieve with this society is to be able to raise awareness. We have a lot of geologists, believe it or not. I can tell you that in the banking sector, there are so many geologists, but we have been institutionally bullied into timidity as geologists. Even right from school, you actually introduce yourself with a bit of apology, and I don’t know why. It’s a very tough science, the whole mineral resources in the world is based on geology. If there is no iron ore, there’ll be no steel; if there is no tantalite there will be no phones. There is no columbite and tin, there’ll be no spoons. If there is no kaolin, there will be no ceramics. So all the mineral resources that constitute the most in our lives are actually mined and credit are given to industries as against the people that know what it is. There’s this mascara and all these shiny cosmetic items all over my village, it’s from muscovite, and the Chinese are there in Nasarawa State packing it away to produce items.
Let me tell you the honest truth, there is either deliberate or a concerted, orchestrated design in making Africans distance themselves from the products that their crude raw material produces. There is Geology for almost everything, but making this connection has not been emphasised. The Chinese are all over Nasarawa and Taraba states looking for lithium, and they easily just tell you that it is used for battery and everything. But a geologist will tell you that the best lithium you can get in Nigeria is maybe 8% of the rock. The rock is made up of other mineral resources which could be more useful. And until you are able to make connections between the minerals that constitutes the rock to the final product, you might not know that the chap taking that lithium rock that constituted 8% of lithium which he is paying you for, is actually benefiting from copper or related minerals that are found on the rocks.
I was talking to a geologist who is doing gold in Nigeria and he was telling me that a kilogramme of gold is about N49 million, but the excitement about it is that, it is a 23 karat gold, it can only be 24 when it’s refined. So, for a 23 karat gold, the gold mineral element itself is about 97/ 98% of the total body of the rock. So, 2% could either be silver, copper or palladium. He said if it happens to be palladium, the 1% of palladium is more expensive than the 98% of gold. So, if you’re not a geologist, or a mineral conscious individual that has the experience, you will be selling the 98% of gold with a lot of excitement leaving the main thing out. So, knowledge is our key critical problem. But not just geological knowledge alone. The Tesla’s of this world have either through proxies or directly come to Nigeria, looking for lithium for their electric motors. So, we must consciously sell the awareness and that’s what will give the geologist the significance that he needs to have in the space. And that part of our objective is to take geology to the lowest end of the society so that our young people will start understanding the value of that course to their lives.
Can you share with us your programmes, challenges and where you want government to be of assistance?
In terms of our programmes, we’re re promoting relevance in the society. We are also promoting Inclusion, integrity, respect, collaboration, scholarship, accountability, and stewardship. We are hopeful that with the establishment of our society, we will have similar collaborations with similar societies around the world. Therefore, we do not intend to reinvent the wheel, we would want to collaborate effectively in a sustainable mining practice, in sustainable petroleum exploration practices, and some other practices.
Like I told you, geologists are in almost every sector, in fact, unexpected sectors too like customs, the finance industry, and so many other things. We intend to bring all that into inclusiveness so that we’ll work towards a common goal. Already, we’ve got supportive hands from the legislative arm of the government. We are hoping that the executive arm of government in Nigeria will appreciate our humble contribution, and to partner with us to see that we promote this profession that has been quite intimidated in the space. We are also calling on our colleagues in the various sectors of resource management to step up and speak to younger people and make them aware of where they can deploy their skills and knowledge.
Our mission is very clear; it is focused on geologists, and that’s what we are about; geologist and geologists only. It’s very easy for anybody to mistake us for miners, we are not miners, we are not mining engineers, we are geologists, and we are about the study of the Earth and Earth Sciences.
We hope our ultimate objective and goal will be to have made Nigerians and geologists to make that inevitable connection between our crude materials that God has endowed us with, to most of the finished products that we spend millions of dollars in acquiring. I can tell you that a simple bar of gold that is mined in Nigeria for N47 million can be turned into ornaments of hundreds of millions of Naira, which is sold back to us as Rolex wristwatches or all sort of jewelries. We need to bring that awareness and the understanding. Just like my favourite politician, which I will not mention his name says,” How come we have the gold pits and other countries have the gold reserves. How come we are poor and the people with the gold reserves are rich?” So, we need to close that gap between crude to finished products. This gap for me, is where development is. This is where we missed it. There’s a lot happening in the sector, there is traceability, most of our resources are finding themselves in the black market and cannot be traced back to Nigeria. So, we’re going to help in supporting traceability initiatives. That way, we will be very accountable for whatever minerals that is leaving our shores going forward.
There’s a lot in terms of knowledge gap in the sector, there’s so much required. The Nigerian Institute of Mining and Geosciences in Jos is doing its bit. In fact, I just heard over the week that it is going to be converted into a university of mining and geosciences. I think it’s all in the same spirit of trying to expand the knowledge of geology and mining. There is a way we want our new generation of geologists to think; when he takes a spoon, he knows there is iron ore from Itakpe that could have resulted into steel. This is how to think, and this is how to bring about manufacturing. This is the kind of thinking we must have, and that’s when we will appreciate how much resource there is all over us. So, geology of everything is what we want to bring into the fold and put geologists in their place of pride for the nation. And I’ll repeat it again, the geology of the country is the wealth of the country.
