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How to address mining sector challenges in Nigeria, by experts

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With the appointment of a Minister for mining, experts in the country’s mining and solid minerals sector have advised the Federal Government to address the lingering challenges bedevilling the industry.

Coming at a time, when government is focusing on diversifying the economy from oil and gas, Managing Consultant, Geocardinal Engineering Services Limited, Titilope Adeyemo urged the new minister to work on the regulatory framework of the sector, stressing that the existing regulations are not properly enforced.

Speaking with The Guardian on the state of the sector, Adeyemo, said while laws regarding exploitation of natural resources are in the exclusive list, some state governments still use their state apparatus to frustrate enforcement and mining investors.

“A lot of foreign companies have left the country because they could not cope with the laws by some state governments, against those by the federal government. The sad thing is that those states are not even ready to exploit the resources with which they are endowed. They do not have control over the resources, because illegal miners have taken over.

“What they should do is to create the enabling environment to attract prospective investors, and then market what they have in their domains. The state governments are supposed to register their own mining companies and use them to acquire mineral titles all over the country. But, they are not doing that”, he added.

If the regulatory framework is strengthened, Adeyemo believes that prospective investors should be given an operating guideline that would prioritise obedience to environmental and reclamation laws, as the practice are in countries like Canada and Australia.

While there were promises on diversification of the economy through non-oil sectors, Adeyemo noted that efforts of the government were only felt in the agricultural sector, stressing that the solid minerals sector is facing the challenge of the dearth of capacity, which would have enabled the diversification objectives become realistic in the sector.

“In Australia, Canada and South Africa, professionals are the ones running the industry. Not in Nigeria. Most of the people working in the solid minerals sector do not have the technical know-how to mine the resources. Most of their activities only create the environmental problems the industry is facing today. If the government does not take steps to enhance the capacity of the professionals operating in the sector, by establishing centres to offer training on how to engage in small-scale and artisanal mining, its diversification effort will not go far,” he said.

He insisted that the government was not doing enough in the sector, adding, “even where the investor has the money and does not have the capacity and expertise on how to use the money effectively to develop the sector, the result will still be the same.

“The capacities of the artisanal miners, professional miners that do mining on a large scale, and the government agencies and the ministry monitoring the operators in the sector, need to be developed. They have to go to South Africa, Australia and Canada, where they know the industry is operating according to international and globally accepted standards, to learn.”

Director, Head Mining Industry, PwC, Habeeb Jaiyeola, noted that federal government was only serious about addressing the challenges in the sector due to the shortfall in the price of oil, adding that the priority dropped as soon as the commodity’s price started improving.

With a new minister, Jaiyeola advised the government to open up conversations that would help in mitigating the critical obstacles limiting the sector, stressing that there was need for an environment that would encourage mining activities.

“The diversification agenda of the government was taken serious when the previous administration took over. That was primarily due to the downturn in the crude oil prices and the impact it had in taking us into a recession. We got out of recession because of the improvement in oil prices. But the attention on the need for the mining sector to be one of the diversified sector dwindled,” he said

According to him, though crude oil price is averagely stable, government needs to put pressure on the mining industry to move quickly, especially with a success story that can be celebrated globally.

Jaiyeola said: “The global community is looking for a mining community to take their investment. When they are sure of investing without challenges, they will confidently bring in the needed resources that will develop the sector. We need to give that confidence. So the minister may be interested in ensuring that there is success story either picking one mineral and moving across the value chain.”

Since the global community is moving away from fossil fuels, Jaiyeola expressed worry that the country is not investing in commodities, which have future value.

“Mining is a dynamic industry. The global economy is moving towards minerals that can support green energy. There are minerals like led, tin and others that can support production of batteries and other minerals that are more futuristic so that by the time we are developing these minerals, we won’t be running a show of catch up,” he said.

He expressed worry over policy inconsistency in the sector, adding that the federal government must find a way to address overlapping challenges between state and federal government as the bureaucratic measures could continue to distance investors.

He noted that the agency would complement government’s efforts with necessary assistance that would aid current efforts to overhaul the sector.

Professor of Geology at the University of Ibadan, Gbenda Okunlola had also expressed worry over illegal mining, lack of protection for miners and the dichotomy between the federal and state governments.

Decrying the lack of investment in the sector, he noted that unless the challenges were urgently addressed, the development of the sector might remain a mirage despite over 54 minerals finds.

Okunlola insisted that improvement of transparency and governance should include sustaining a robust regulatory framework, revamping the institution and technical structure, getting the licensing framework right, enhancing and plugging loopholes in the production and revenue profile, availability and dissemination of geoscience data, as well as a more robust stakeholders’ participation that also takes into consideration community participation, gender mainstreaming and civil society engagement.


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