Fayemi seeks expansion of mineral processing to reduce $3b import bill
The Minister of Solid Minerals Development, Dr. Kayode Fayemi said for a quick economic rebound and achievement of sustainable growth in mining sector in the country, there must be a clear focus on expanding domestic Iron ore and minerals processing industry.
Such move, the minister said, would promote the economic growth and contribute to the nation’s Gross Domestic Product (GDP).
Besides, he noted that steel is the world’s most important engineering material crucial to any country’s industrialisation objectives, adding that Nigeria imports an estimated $3.3 billion of processed steel and associated derivatives, representing 80 per cent of the $4.2 billion total metal products imported per year.
The minister, who was speaking at the 2016 Stanbic IBTC Bank Iron Ore and Steel business session, in Lagos, said the forum was focused on strategy to improve the iron and steel industry and the Nigeria economy.
According to him, the steel sector is weak due to poor infrastructure for extracting, processing and transporting bulk material such as freight rail transport, access roads to mines and electrical power.
He however, noted that the Federal Government is of the view that the steel industry can be attractive to investors due to the large untapped demand potential similar to cement in 1990s. The current market size of $3.3 billion per annum has potential to grow to $15.1 billion per annum with increase industrialisation.
However, the minster said its ministry is working with banks on how to create low cost funds for the mining sector, adding that banks are working hard to establish mining desks.
Fayemi also listed some of the strategy for unlocking the sector’s full potential, which are; comprehensive turnaround of the board mining and metals sector; to build a world class minerals and mining ecosystem designed to serve a targeted domestic and export market for minerals and ores; and to return to global ore mineral markets at a market competitive price point.
According to a recent report by the National Integrated Master Plan (NIMP), to fund the infrastructure needs of its growing economy over the next 30 years, Nigeria would need to spend about $3 trillion.
This investment would allow Nigeria to close its current infrastructure gap and sustain an ideal infrastructure stock level of 70 per cent of GDP as it builds and maintains infrastructure assets across all its seven key sectors such as roads, rail, ports, airports, power, water and ICT.
Also, the Head of Mining at Standard Bank, South Africa, Anders Alfredson, stated that Nigeria market has potential to develop domestic iron ore and other steel raw material resources and abundance of attractively priced energy sources available locally.
Alfredson said Nigeria is not starting mining funding from the scratch, adding that Nigeria should develop a legal framework in place to get mining working.