The 30th edition of “Investing in Mining Indaba,” recently held in Cape Town, South Africa, provided another opportunity for African countries through their Ministers of Solid Minerals and Mineral Resources to consolidate on the pact to forge a common front in projecting the continent’s interest in the global mining industry.
Nigeria and Uganda had led over a dozen other African countries into a coalition in early January on the sidelines of the Future Minerals Forum in Riyadh, Saudi Arabia, to make a case for local value addition and maximum beneficiation from its vast mineral resources for citizens and member countries.
The African Minerals Strategy Group (AMSG) was formed through a coalition, with Nigeria’s Minister of Solid Minerals Development, Dr. Dele Alake, elected as its pioneer chairman. Alake emphasised the end of wasting solid minerals without adding value to Africa’s economy.
His words were, “We must speak with one voice on value addition as a prerequisite for investment in the mining sector. Let those who want our minerals know that if you go to country A, you have the same regulations and laws guiding the sector. You go to country B; you find the same. So, there is no divide and rule anymore. That is when we can show sincerity of purpose, and the world will begin to take Africa seriously. On behalf of our president, I pledge our full support to achieve our objectives.”
Doubling down on the resolve of the African continent, the Minister, while speaking as a panellist on the theme ‘Positioning Africa to Succeed in Diversifying Global Value Chains’, emphasised the necessity of creating the value chain from exploration to mining, processing, inventory management, transportation, and then delivery to the end-consumer.
“All these processes require infrastructure, and in my engagement with private sector players over time, I have discovered that a lot of them prefer to engage in investments in mining sites close to ports. That means there is a need for transportation—roads and rails. I’m thinking that the best approach is to collaborate with consumer nations that need these raw materials for the provision of infrastructure without jeopardising local value addition,” he added.
Highlighting why Nigeria should be the destination of choice for prospective investors in the lithium value chain, Alake stressed that the country is experiencing a ‘Lithium boom’ citing the preponderance of the critical metal in several localities, which he noted are literally on the surface of the earth, in most locations. “This will culminate in lower production costs for extraction compared to other countries.”
While reiterating the need for public-private partnerships (PPP) in cahoots with multilateral financial institutions to unlock the requisite funding for mining sector development, the Minister informed his audience that Nigeria has taken the lead with the establishment of the Solid Minerals Development Fund (SMDF) to build the capacity of local investors to engage in mineral exploitation.
“The SMDF is also in partnership with the African Finance Corporation (AFC). This body has been responsible for encouraging local investment in the mining sector, and appreciable results are coming in. They are also through the AFC involved in the Lobito corridor involving Angola, Zambia, and the DRC. We are encouraging the same corridor to be put in West Africa, starting with Nigeria, because we have these mineral resources in abundance.”
Speaking further on financing, Alake charged African countries to take a cue from Nigeria by taking a critical look at the SMDF model. “While we look forward to the foreign financial institutions, I will recommend to other African countries to also look inwards. The SMDF in Nigeria is sourcing its funds from other economic engagements. I will recommend this policy initiative to other African countries”.
Back home in Nigeria, reforms of President Bola Tinubu on the mining sector are gathering momentum. Just recently, an inter-ministerial committee tasked with developing a blueprint for securing natural resources established by the president and chaired by Dr. Alake has since swung into action.
The administration envisages the setting up of a specialised security outfit made up of well-trained operatives equipped with the requisite technology and ammunition that will secure natural resources comprising solid minerals, forest flora and fauna, and the marine economy. The last meeting involved heads of security agencies, and they were given a timeline to come up with a robust action plan that will assist the committee in turning in its report.
In line with the Minister’s 7-point agenda, plans are ongoing to bequeath an efficient governance structure for the mining sector with the establishment of a Special Purpose Vehicle (SPV), tentatively called the Nigerian Mining Corporation.
The corporation is conceptualised to be private sector-driven, with cumulative equity for the private sector pegged at 50 percent, the government at 25 percent, and the Nigerian public at 25 percent, respectively. Learning from past experiences, this model is designed to minimise government interference and guarantee the corporation’s efficiency and stability, even beyond any administration.
The National Assembly is amending the 2007 Nigerian Minerals and Mining Act in collaboration with the Ministry of Solid Minerals Development. The amendment will support proposed mining corporations and other reforms. The House Committee on Solid Minerals recently held a public hearing involving top officials, ministry agencies, and mining industry stakeholders.
Dr Alake hinted at the revocation of more mining licences in an interview with Channels TV, following the revocation of 1,633 mining licences due to a default in annual service fees. He vowed to enforce stricter regulations to free up space for genuine investors and those willing to comply with regulations.
In all of these, what is not in doubt is that Nigeria is playing a pivotal role in Africa’s mining sector renaissance. Summing up the new direction as chair of the AMSG during Cape Town’s Mining Indaba, Alake affirmed, “We are sanitising the mining environment, creating the enabling environment to attract investments, whether local or foreign. This time around, the emphasis will be on local value addition. So that henceforth, Africa can gain maximally from its abundant natural resources.”
Segun Tomori is the Special Assistant on Media to the Honourable Minister of Solid Minerals Development.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
