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The solid minerals and advantage!


The Minister of Solid Minerals Development, Kayode Fayemi

The Minister of Solid Minerals Development, Kayode Fayemi

In The Guardian newspapers of 2nd and 9th March of the year, Drillbytes did a detailed state-by-state analysis of the solid mineral deposit in Nigeria. The idea was to get the governments of the solid minerals endowed states to fast-track the development of those deposits in their states as a way of finding sustainable bail-out in the crisis of internally generated revenues plaguing the country.

The Federal Government of Nigeria, through the Ministry of Solid Minerals has done a detailed work in the sector with a roadmap to boot, but it would appear the road and the map are not in agreement, at least, in the area of quick-fix alternative cash to make up for the badly dwindled crude oil revenue to the Local, State and Central government.

Meanwhile, some of these states are sitting on hundreds of billions of Naira worth of solid minerals deposits, and yet paying salaries in installments or outrightly unable to pay, it becomes imperative to remind their excellencies that they have everything to gain by quickly turning the solid minerals in their domain to increased revenue that takes care of internally generated headache!

While it is true that solid minerals have been discovered in several states some decades back, it is equally true that the easy money that comes with petro-dollars has made government lazy to developing the sector, a void that was quickly filled with all manner of illegal miners that helped themselves to the exploitation of such minerals for several years while the government pretended not to notice.

The advent of illegal miners further cheapened the sector, as raw minerals are not as valuable as polished and/or refined ones. Lack of solid minerals processing companies made the mined minerals exchange for peanuts and exported illegally outside the country to places where it can be further processed and thereafter auctioned at humongous amounts of money.

This is where the states and the Federal Government have been losing good money over the years and will continue to lose if concerted efforts are not put in place in good time, to start harvesting attractive returns from the mineral deposits. It is a sector that is unattractive to pipeline vandals, illegal bunkerers and bombing of export terminals so the risk factor is significantly reduced. The government has no reason to owe salaries or abandon projects due to a shortfall from federal allocations, which in turn reflects the position of international basket price for oil. It is time to do the needful!

One of several ways by which this could possibly be achieved is to get the illegal miners, at least, those willing to embrace the new policy, together to form companies licensed by government to mine the minerals. Another is to encourage the few registered ones with incentives that will fast-track the development of the sector. This will allow government to monitor them effectively and get beneficial returns on their oversight. Punishment for illegal miners can be made through plea-bargaining or outright confinement to Gashua prisons! This is particularly necessary in the short and medium terms because the illegal miners understand the terrain better than any government agencies, new comers or any group of people for that matter.

The medium and long term solution will be for the government to set up solid mineral processing plants in the country. It is to these plants the registered miners will take their products for further processing thereby making more money on the end products for the miners and for the government. It is an incontrovertible fact that government has no business in business particularly now, that the hands of the central government is full. It is therefore imperative for the Federal and concerned State governments of Nigeria to go into partnership with private investors, local and foreign, in order to add more value to accruals that will make life more meaningful for the greater good of the majority. It is refreshing that Governor Umaru Tanko Al-Makura of Nasarawa State has kick-started this campaign.

All the states of Nigeria are endowed with one goldmine or the other even if acknowledging it is one thing and turning it around is another! There is absolutely no way any state government that generates less than N5B a month can pay salaries and deliver heaven as promised during their respective political campaigns. The depletion of crude oil production together with the weakness of the Naira has suddenly made the promise of heaven look more like the reality of hell!

Some governments with the eagerness to deliver on electoral promises have had to borrow for two years from within and without using the model of a basket price of $100/barrel of crude oil only for the commodity to crash to a stable price of N40/barrel within the first year! Such indolent states will remain rich in internally generated excuses! Since the future of crude oil in the market is beginning to look more as unreliable as an oasis in a desert, it is about time the governments of these states look in the direction of solid minerals for sustainable bail-out. Turning around the solid minerals sector in these recessive times holds the promise of good returns if only the concerned governments can find the way to the will. This is the solid minerals advantage!
. Kayode Adeoye is a energy analyst in Lagos.

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1 Comment
  • emmanuel kalu

    This turn around require leadership in state houses and the federal government, of which we don’t have any. like the article mention, a very quick way to start benefiting from the solid mineral and even from the illegal refining of crude oil, is to start bring those illegal miner in line with the legal operation.