• Monday, November 11, 2024
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Curbing illicit mining, insecurity, others will test Alake’s will

FG opposes Senate bill to establish new agency to tackle illegal mining

Gold and other minerals worth billions of naira are stolen from Nigeria yearly and vast swaths of mining fields with proven mineral deposits are overrun by armed bandits, developments that serve to indicate that the new minister of Solid Minerals has his work cut out.

As many want to point out, a minister’s job is to provide direction and get out of the way of civil servants who implement government policy. However, the success of the ministry largely depends on the competence of the minister.

Dele Alake, a former newspaper editor and media manager at his ministerial screening impressed the lawmakers that many commended his mastery of communication. Shortly after he took the oath of office on Monday, he told journalists that he had asked the president to assign the Solid Minerals ministry to him.

“The Ministry of Solid Minerals Development, as you know, is in a sensitive position in this period of economic renewal. So, that position was one that I specifically asked Mr President to give me, and he obliged. The ministry is key to the administration, and the president wanted someone that he trusted and believed would deliver effectively.”

His ideas for developing this sector he asked for would come under close scrutiny. Despite Nigeria’s vast solid mineral potential, it continues to underperform, accounting for less than 0.85 percent of GDP in 2022. Considering that this was a 32 percent year-on-year growth over 2021 data, suggests that it is on an upward trajectory. The minister’s key priority is to sustain the momentum.

A recent KPMG report said Nigeria currently boasts over 44 priced solid minerals in the mining space, with huge deposits scattered over different parts of the country.

Read also: Nigeria to tap $37bn market as firm confirms lithium deposits

“However, more efforts are required to set the sector on a faster growth trajectory, to compete with that of the oil and gas sector, as the main revenue earner for the country and facilitate our diversification agenda.”

According to KPMG, mining still embeds great potential to boost economic development, diversification and industrialisation. However, the realisation of these goals hinges on the FG’s continued political will to revamp the sector and avail it with the requisite machinery to function effectively.

Read also: Four illegal miners killed in Bauchi State mining disaster

It called for the provision of accessible and affordable funding, expediting amendments to mining laws, regulations, and policies, access to reliable geodata, provision of tax incentives and/or rebates, and enhancing security measures to safeguard mining operations.

This is where Alake’s expertise would be highly sought after. The minister provides blueprints and guidance on policy to achieve the overall goals of the administration.

Countries around the world are retooling their strategy to leverage anticipated growth in the minerals of the future. They will be used to produce car batteries and other clean energy technologies including Nickel, Aluminum, Phosphorus, Iron, Copper, Graphite, Lithium, Cobalt, and Manganese.

Australia’s success with mining, leading to an 8 percent contribution to its GDP, reveals what is possible with an effective strategy for the solid minerals sector. The government’s strategic purpose is to secure its position as a powerhouse in the global critical minerals supply chain, thereby protecting the nation’s future prosperity and national security interests.

Recently, Chile clarified mining rules with a new public-private partnership model, leading to more than 50 companies from around the world jostling to negotiate lithium deals in a country that represents 30 percent of global lithium production.

Nigeria has vast deposits of some of these minerals including Iron ore, Copper, Manganese, and Graphite but developing them has not been on the priority list of successive governments. Only iron ore features due to the industrialization potential steel can offer the country.

In 2017 Nigeria’s mining and minerals investment brochure was developed when Kayode Fayemi was the minister of mines and steel development. It seeks to develop seven out of the dozens of minerals found in many states across Nigeria. These are Coal, Bitumen, Limestone, Iron Ore, Barites, Gold, and Lead/ Zinc.

Read also: FG considers royalties, taxes from solid minerals alternatives to crude oil revenue

Olamilekan Adegbite, the former minister of mines and steel development, initiated reforms to encourage local development of mineral resources but they have been either ignored or mostly exploited by artisanal miners.

To encourage private sector participation, the ministry provided incentives including waivers on customs and import duties for plants, machinery, and equipment imported for mining operations and tax holidays of between three to five years for businesses as applicable.

Other incentives in the strategy planned till 2025, include free transferability of funds and permission to retain and use earned foreign exchange, capital allowances of up to 95 percent of qualifying capital expenditure, deductibility of Environmental Costs (money meant for environmental remediation now tax-free), and 100 percent ownership of mineral properties.

The challenge for the new minister is how to ensure that these incentives are strategically directed at the minerals of the future. Recent discoveries of huge lithium deposits by Thor in Oyo State show where energies should be directed.

Isaac Anyaogu is an Assistant editor and head of the energy and environment desk. He is an award-winning journalist who has written hundreds of reports on Nigeria’s oil and gas industry, energy and environmental policies, regulation and climate change impacts in Africa. He was part of a journalist team that investigated lead acid pollution by an Indian recycler in Nigeria and won the international prize - Fetisov Journalism award in 2020. Mr Anyaogu joined BusinessDay in January 2016 as a multimedia content producer on the energy desk and rose to head the desk in October 2020 after several ground breaking stories and multiple award wining stories. His reporting covers start-ups, companies and markets, financing and regulatory policies in the power sector, oil and gas, renewable energy and environmental sectors He has covered the Niger Delta crises, and corruption in NIgeria’s petroleum product imports. He left the Audit and Consulting firm, OR&C Consultants in 2015 after three years to write for BusinessDay and his background working with financial statements, audit reports and tax consulting assignments significantly benefited his reporting. Mr Anyaogu studied mass communications and Media Studies and has attended several training programmes in Ghana, South Africa and the United States

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