Stakeholders in Nigeria’s mining industry have reiterated the need to improve financial investments to the sector, in order for it to be fully utilized for economic gains, foreign exchange inflow and job creation.
This was discussed at the Mining and solid minerals conference organized by the Mining and Solid Minerals Group of the Lagos Chamber of Commerce and Industry (LCCI) themed ‘Solid minerals: The foreign exchange game changer’.
Olamilekan Adegbite, Nigeria’s Minister of Mines and Steel Development said in countries endowed with strategic mineral deposits, the mining sector contributes substantially to foreign exchange earnings, adding that direct foreign investment in the mining sector creates a massive inflow of foreign exchange for the exploration and development of minerals with a positive impact on infrastructure and employment.
“A key Constraint in the accelerated development of solid minerals is the undeveloped financing mechanisms for the mining sector, the Nigeria banking system has limited exposure to mining which probably is due to the lack of sufficient understanding of the sector,” he said.
The minister commended the Central Bank of Nigeria for its interventions in key sectors of the economy which has produced results and advised that such actions are replicated in mining.
“The success of rebuilding the industry to achieve the transformational ambition for shared mining prosperity depends on the active participation of all stakeholders including the Nigerian vibrant financing community,” he said.
He reiterated that through the Solid Mineral Development fund, the Ministry of Mines is poised to partner with banks, private sector investors, and multilateral partners to unlock private sector investment and financing into the mining sector and develop long term mining sector development bonds to finance the sector.
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Data from the Nigerian Geological Survey Agency (NGSA) confirms that Nigeria has over 44 mineral deposits occurring in commercial quantities in over 500 locations across the country, however, these resources cannot contribute to Nigeria’s development as activities are small-scale and are plagued with little inflow of funds.
Michael Olawale-Cole, LCCI, president in his remarks said Nigeria’s solid mineral sector holds a lot of untapped potential which if realized can elevate the sector to contribute significantly to economic growth and also become a major foreign exchange earner for the government.
He said for this to be achieved, a number of reforms have to be instituted especially as it regards attracting investors, making funding available, improving security, investing in refineries, etc.
“The existing fiscal framework for investors in the mining sector is not friendly enough and does not consider the peculiar nature of the sector, particularly, its long gestation period, Nigeria will need to revisit the entire fiscal framework for the taxation of mining operations, to attract mining majors and foreign investors,” he said.
Oluwaseun Olatunji, chairman, mining and solid minerals group, LCCI said 80 percent of operators in the Nigerian mining sector are either artisanal or small-scale mining companies which limits the potentials offered.
He advised that there is need to increase the production and value addition capacities of existing operators in the solid minerals sector adding that it is a low hanging fruit with promising returns when the available resources and markets are considered.
