Preparing Nigeria for minerals of the future beyond oil

With favourable geological formations consisting principally of three major lithological components namely, the basement complex, younger granites, and sedimentary basins, Nigeria is best suited to play big in the global mining sector. To do this however, the country needs to be strategic in its development of minerals, especially those needed for innovation. FEMI ADEKOYA writes on how the Federal Government can exploit opportunities in titanium and cobalt, having raised the bar with Gold.

Nigeria, according to the Ministry of Mines and Steel Development, is endowed with 44 different mineral types that occur in commercial quantities in more than 500 locations across the 36 states and the Federal Capital Territory.

Seven of these minerals have been tagged as strategic for immediate development. These are Coal, Iron Ore, Bitumen, Gold, Limestone, Lead/Zinc and Barite.

The designation of these minerals as strategic, according to the Ministry, stems from their potential to make significant contributions to Nigeria’s economic development. These strategic mineral assets are available across the federation as proven reserves.

The Minister of Mines and Steel Development, Olamilekan Adegbite, stated that the Ministry had been adopting a forward-thinking approach by developing the strategic minerals of the future.

He listed the minerals to include minor metals like titanium and cobalt, which are vital to futuristic industries such as telecoms and electric vehicle manufacturing.

The Democratic Republic of the Congo houses most of the world’s supply of cobalt.

Already, a new report from Goldman Sachs shows that clean tech is expected to drive $1 to $2 trillion in yearly investment going forward, and renewable power is expected to become the largest area of spending in the energy industry by 2021.

Nickel, aluminium, phosphorus, and iron are expected to lead the way during this decade, while copper, graphite, and lithium also expected to do very well. Government incentives in China and Europe will also bolster demand for these metals.

To enjoy a share from this spending, Adegbite urged investors not to shy away from the mining, as the Ministry has de-risked the sector.

Unearthing minerals of the future
Despite its desperate need to enhance revenue generation and the commitment of its politicians to take the green way to industrialisation, the International Energy Agency (IEA), noted that Africa lagged far behind all the other continents in renewable energy actual generation and capacity growth.

According to the agency, half of Africa’s booming population still has no access to electricity, and power cuts affect 80% of the companies operating on the continent.

Some 60% of the total share of electricity generated in sub- Saharan Africa comes from hydropower. Oil comes second with a share of 18%, followed by gas (16%).

According to the IEA Africa’s hope to face the growing demand, brought about by demographic growth and projected economic development; rely on the development of solar energy. This has the potential to overtake hydropower as the main renewable generation source – coupled with the use of the abundant reserves of natural gas discovered in recent years in the continent.

“The big open question for Africa remains the speed at which solar PV will grow. To date, the continent with the richest solar resources in the world has installed only five gigawatts (GW) of solar PV, less than 1% of the global total,” says the IEA.

Renewable energy however depends on the production of batteries for storage of generated power.

The World Bank reported recently that the production of battery metals such as graphite, lithium and cobalt will have to increase by nearly 500% by 2050, to meet the growing demand for clean energy technologies.

According to the global lender, over three billion tonnes of minerals and metals will be needed to deploy wind, solar and geothermal power, as well as the energy storage required to transition to a low-carbon economy.

Many of the critical minerals used to make batteries for electric vehicles are found in developing nations. The World Bank’s goal is to help those nations to mine those commodities in a sustainable manner to avert major ecological damage.

Mining the vast amount of key commodities the world will need, is seen as the only path to achieving the goals of the Paris Agreement, which seeks to limit global warming to 2°C or less.

While renewables and energy storage technologies require more minerals, the carbon footprint of their production — from extraction to end-use — will account for only 6% of the greenhouse gas emissions generated by fossil fuels.

For Nigeria to mine for the future, Adegbite noted: “We have learnt our lessons for neglecting the development of our solid minerals sector, more so, today; as we are faced with the situation of dwindling revenues from oil and gas. This impacts on the budget and our ability to meet the country-wide economic aims.

“Therefore, with the development of the Solid Minerals sector, this helps in meeting the cross-sectorial, country-wide development aims, which include bridging gaps between economies, education and pro-poor strategies. It is recognized by the Government that mining is a key enabler to implement these strategies.

“Our focus is now on de-risking the sector, by the provision of more up-to-date and comprehensive data on mineral occurrences in Nigeria and enabling a more investor friendly environment through favourable incentives,” he added.

Reforms and future of Nigeria’s mining industry
According to Geological expert, Bill Feast, “A poorly implemented mining cadastre system could complicate an already complex regulatory environment,” adding that this was currently the case in South Africa, where the mining cadastre system impacted negatively on investment into the country’s mining sector.

He noted that for a mining cadastre to be successful, it had to achieve a balance between protecting and guaranteeing the rights of the state and the titleholders.

Although Feast had argued that there were various challenges with regard to the implementation of a mining cadastre that have to be considered to ensure that the system functioned optimally, Adegbite explained that the Ministry has embarked on major reforms. This is based on the principle that government serves as a business-friendly regulator, providing the enabling environment for businesses to thrive.

He noted that under the reforms, the private sector is seen as the catalyst for growth that will drive the sector forward.

“Underlining the vision itself is a strict promotion of transparency regime that empowers patrons to build trust and ensure accountability. For example, the ‘first-come-first-serve’ and non-discretionary granting of mineral titles policy of the Mining Cadastral Office, now ensures the issuance of 6 types of licenses and permits to cover all activities from exploration to mineral production as well as granting of licenses between 30 – 45 days using transparent rules and regulations.

“The recent establishment of the Investment Promotion and Mineral Trade Department is indicative of our zeal and preparedness to welcome global investment partners. We will strengthen the Investment Promotion and Mineral Trade Department to provide all the necessary assistance investors will demand. I urge you to take advantage of the incredible incentives put in place to support all visionary investors in the sector,” Adegbite added.

Encouraging investors through incentives
With the dynamics of global trade changing as a result of many sovereign entities reviewing their alliances, the need to sell the country’s mining industry becomes more important than ever.

Adegbite said the Federal Government is determined to protect any direct foreign investments, as indicated in the Nigerian Mineral and Mining Act 2007.

The Minister allayed investors’ fears and assured them that the mining sector was very friendly and that the government had put in place incentives that would favour them.

“Our focus is now on de-risking the sector, by the provision of more up-to-date and comprehensive data on mineral occurrences in Nigeria, and enabling a more investor-friendly environment through favourable incentives.

The upsurge of mineral exports from the informal and small-scale miners has encouraged the country to confidently promote activities that will trigger the emergence of a new vista and its sustainability,” he added.

Shinkafi

On her part, the Executive Secretary, Solid Mineral Development Fund, (SMDF), Fatima Shinkafi, noted that there are so many incentives that have been put in place to attract investors into the sector.

“One of them is royalty waivers for gold exploiters to encourage compliance with royalty payment. The Minister has a vision to make Nigeria a gold producing hub in West Africa; hence he has made it easier for stakeholders in the sector to apply for mining licences. We have streamlined our operation at the mining cadre office, making it easier for investors to apply for mining licences online.

“There are also waivers for those who want to bring in equipment into the mining sector. Indeed, the sector has become more business friendly under the tenure of the minister. One of the things he has also done is to include private sector stakeholders in policy making frameworks. Without a doubt, his tenure has been encouraging more investment into the mining sector through the implementation of laudable policies enshrined in the roadmap and geared towards revamping diversification of the economy.”, she added.

President of Miners Association of Nigeria (MAN), Kabiru Kankara, also agreed that the Minister has made it easier for miners to get licences, saying: “the minister has indeed made the sector more business-friendly through the policies he has been pursuing. It is now easier to get mining licences, and the Minister has made himself available to stakeholders in the sector.”

President of Women in Mining, Janet Adeyemi, urged improved public-private sector collaboration to aid exploration activities in the country.