‘How Nigeria can exploit its coal, mineral resources for wealth creation’

Mrs Rabi Umar Sodangi is the Acting Director General and Chief Executive of the National Steel Raw Materials Exploration Agency (NSRMEA). In this interview with BENJAMIN ALADE, she talks about how the nation can move beyond oil and exploit its mineral resources, especially coal for power generation for wealth creation. Excerpts

How would you describe activities and impact of NSRMEA in the last 46 years it was established? 

The National Steel Raw Materials Exploration Agency is a Government Parastatal under the supervision of Ministry of Mines and Steel Development. It came into existence as the Exploration and Mining Division of the defunct Nigerian Steel Development Authority (NSDA), which was established by Decree 19 of 1971.

It later became a corporate body through the enactment of decree 49 of 1992 with mandate amongst others to carry out the exploration of steel raw materials in all parts of Nigeria and elsewhere to source raw materials for the iron and steel industry.

In keeping with our mandate, the agency has been actively involved in the identification, qualification and quantification of local deposits of iron ore and other related raw materials for the iron and steel making.  This has been achieved through intensive and extensive geological, geophysical and geochemical investigation in various mineral-prospecting areas of the country.

The agency was operating successfully until around year 2002, when Federal Government’s funding of the steel sector drastically declined because it has entered into a financial agreement with the like of SOLGAS of USA and later a concession with an Indian company, the Global Infrastructure Nigeria Ltd (GINL) on the Ajaokuta Steel Company Ltd.

Both SOLGAS and GINL failed woefully. They were eased off on realizing they were short-changing the country.

Those policies and actions really affected the agency; coupled with the challenge of old and obsolete equipment, low funding and no capacity building. The agency just managed to maintain skeletal operations mostly on consultancy because the whole steel sector was completely neglected until the arrival of this current administration in 2015.

How much has now changed with this government’s renewed interest and investment in the sector?

A complete overhaul is ongoing in the mine and steel development sector as we speak, and our agency is catching up on the transformational effects. For instance, government’s funding and intervention has assisted us to rescue the agency from comatose and set it on the path of full recovery, rejuvenation and profitable curve.

The total budgetary allocation to the agency in 2016 was, for example, 10 times more than that of the immediate past government. And with it, we were able to do quite a lot, acquiring drilling rigs, field vehicles, geophysics and survey equipment and some laboratory equipment including handheld XRF machines, training and retraining our employees.

Given this development, how attractive has the sector become to investments?

The Ministry of Mines and Steel Development under the leadership of the two ministers has effected major improvements in the area of geosciences data generation for investors in the sector.  A roadmap was articulated in line with the African Mining Vision and the Mining Implementation Strategy Team (MIST) was constituted for the implementation of the roadmap.

Through this, various sources of financing and capacity building were secured for the sector through the World Bank, the Natural Resources Development Fund, Donor Agencies support and foreign collaborations etc. The focus is to build a world class minerals and mining ecosystem.

With quality leadership and political will, the potential of the sector has been fully unlocked, with the Ministry effectively deflating the risks therein, thereby making the Nigerian Mining Jurisdiction now more attractive to investments and have a better investment risk profile than `Russia, China, India and even New York.

What are the investment preferences at the moment?

These include but not limited to exploration, exploitation, mineral processing, buying, exporting and reporting etc.  Besides, the steel raw materials resources in Nigeria are quite enormous. This country has a very favourable geological formation.

We have basement complex in most part of North West, South West and the North Central and North East. That is where you find iron ore, ferro alloys like tantalum, niobium, chromite manganese, bauxite, and various industrial minerals like limestone and various types of clays used in the iron and steel industry.

We also have the Cretaceous sedimentary areas, otherwise known as the Benue trough (a geological formation extending to about 1000Km North East from the Bight of Benin to Lake Chad through Calabar, Abakaliki, Enugu, Kogi, Nasarawa, Bauchi, Gombe etc; Bida basin and Sokoto basin (comprising Zamfara, Sokoto and Kebbi States) where you find many large coal sites .

We even have tin and tungsten in Jurassic younger granite areas scattered around Abuja, Plateau, Bauchi and Kaduna States.These are capital intensive and risky but highly profitable investment. And the government has made this more possible with its Ease of Doing Business Policy.

How surmountable are the challenges hindering the smooth conversion of the country’s minerals into wealth?

The basic challenges are funding for retooling, for the exploration itself and for capacity building. Exploration is capital intensive.
Is this not being addressed in the budgetary provisions?

It was but can be better. Our 2017 budgetary allocation was about N1.3b. We have received 100m. This is a lot of improvement but we still have a long way to cover.

How much is your agency doing to address the health and safety concerns of the host communities of these mining and exploration sites, given the country’s poor record on crude oil and its devastating environmental impacts in the Niger Delta?

There are a lot of concerns regarding this but the ministry (of mines and steel development) is tackling it.  There is a dedicated department that is addressing this issue.

How can the nation explore our abundant coal reserve for improved power generation and supply?

Indeed Nigeria is blessed with abundant coal resources estimated to be about 2.8billion metric tonnes. It is mostly sub-bituminous which is very good for power generation. The largest come from the Anambra basin which is about 3000sqkm situated west of the lower Benue Trough. It is believed that about 18 States in Nigeria have coal sites and that coal supply to power can last more than 200 years.
Nigeria can have up to four coal-fired power plants in Kogi, Benue, Enugu and Gombe States situated near the coal sites which can generate about 20,000MW.

Exploration must be intensified to quantify and determine the quality of all these sites for mining to feed the power plants. We need to pursue the cheapest source of electricity which is coal. We must do what industrialized nations do in order to industrialize, which is uninterrupted power supply. Nigeria’s energy mix is dominated by hydro and gas and has been oscillating between 5000MW to 7000MW due to low water levels and vandalism of gas pipelines.

Nigerians are industrious by nature, what has been holding us down is lack of electricity. A coal power plant can also generate over 2000 direct jobs and much more indirect jobs.

Therefore, investors should be supported and compelled to complete the exploration in order to attract major miners to produce the coal. National Steel Raw Materials has been contributing towards coal exploration and could do a lot more with necessary funding from government. We have done some exploration work in Okaba, Ogboyoga, Ogwashi, Obi- Lafiya, some sites in Gombe State and are currently in Amasiodo .

Two years after your appointment as the NSRMEA boss, how far have you gone in implementing strategic initiatives? 

We have actually achieved quite a lot, even far beyond our own expectations, to be honest. We have boosted our moribund GIS Unit and it is now up and running.

Formerly, operations for this unit were outsourced. But today, we have trained our staff on the technical know-how and we have acquired latest software and gadgets to domesticate the money that was being channelled out through the outsourcing. And as a result today, our GIS unit can now collect reports from the field, process them into map, digitalize the maps and produce reports. And these can be done at an internationally competitive level.

It is worthy of note that this singular effort has assisted the agency in saving cost that would have run up to N20million or more in year 2017. We have also been able to carry out capacity building such that at the moment, we can now send three teams of drillers, two teams of surveyors and two teams of geophysics simultaneously to go out and work in the field.

Also, as soon as I came in, I was ordered to rejig the agency. Among my priorities was the effort to boost the agency’s consultancy services unit, which we have now done successfully. This was in consonance with Federal Government’s drive for more Internally Generated Revenue through all its agencies and parastatals.

And in return, this year alone, we have generated N80million through consultancy services and have remitted it to the government sub treasury single account. This agency has never generated such revenue before. Ours was unprecedented!

When I took over, we had so many failed and abandoned projects across the country and many of our equipment confiscated by clients because of failed contract. But I was able to generate money from other consultancy works and settle the clients and was able to recover all our impounded rigs, compressors, water tankers and other tools, repaired them and make them operational again.

Between 2016 and 2017, we have successfully worked on 15 exploration projects. And we have made a lot of discoveries in the process.