Mining sector: Time to walk the talk
A claim the other day by the Minister of Mines and Steel Development, Mr. Olamilekan Adegbite that seven ‘‘strategic minerals’’ that can unlock potential in the mining sector have been identified by the Federal Government should not be trifled with.
The minister who revealed the development at a recent event of the Nigerian Economic Summit Group (NESG) noted that the strategic minerals include coal, iron ore, bitumen, gold, limestone, lead/zinc and barite. What needs to be said quickly to this is that the government must walk its talk and not let this be one of the countless statements of commitment that never came to fruition.
Merely going by the phrase used by the minister, ‘‘strategic minerals’’ are so designated because they are considered critical to everyday use in defence equipment, medical and electronic devices, household and agricultural equipment. They are true of utmost necessity to modern life. Take coal that is primarily a source of power generation, besides that it is of value in both steel and cement production; take iron ore that yields iron and on further refinement, steel for the automobile, ships, building and constructions of various types, and even paper clips. Bitumen is used in road construction and also to make roofing products because of its waterproof properties. The intrinsic value of gold as a store of wealth is indubitable, besides its many uses including electronics, jewellery, medicine and dentistry. These minerals and even many more are found largely in commercial quantities all over Nigeria.
This country is literally sitting on the natural wealth of unbelievable proportion. Olamilekan rightly noted that there are more than 44 minerals occurring in over 500 locations across the 36 states and the Federal Capital Territory.
According to a compilation in the 2013 official diary of the Federal Government, gold is found in 13 states, limestone in 12 states, and lead/zinc in 14 states. Coal is found in seven states and iron ore in another seven states. All these exclude such high –in-demand valuable minerals as uranium, cobalt, marble, gemstone and tantalite and silica sand.
It is a crying shame that Nigeria has so much but does so little with it. The glaring proofs of this are two sobering –and saddening -stories of, on the one hand, the Ajaokuta Iron and Steel project conceived in the 1950s, begun in the 1970s, and about 95% completed since 1994, but has, in the words of Boss Mustapha, Secretary to the Government of the Federation, “languished in economic unproductivity for about four decades.” On the other hand, the four outrageously, disgracefully under-performing, corruption-riddled government-owned petrochemical refineries are another case in point.
As the minister talks big intentions to unlock the potential in the mining sector, this newspaper feels constrained to remind him of the very important need not to take this country again through the insufferable route of mere producer and export of primary products. Value-added products have always been the sensible way to go for any country that is determined on economic development and social progress. A raw piece of iron ore is worth only a fraction of its processed value, but if turned into iron, multiplies its value, many times, if further refined into steel, is worth even far more than that. This is not only simple economics but common sense. So, The Guardian would say clearly to Adegbite and the government he speaks for that every so-called strategic mineral, as well as the other minerals, need to be exploited and processed here to maximise the derivable benefits. It is trite to say that these benefits from local processing include the acquisition of technical skills by Nigerians, generation of employment and the expansion of the productive sector and the multiple revenues accruable to the government through royalty and taxes – corporate income tax, export tax, value-added tax, capital gains tax, withholding tax and personal income tax of the workers.
Nigeria has over a billion metric tonnes of coal in 22 coalfields across 13 states according to the Bureau of Public Enterprises (BPE). This is a huge source of coal-to-power that must be urgently harnessed. Indeed, regardless of the outstanding environmental issues, coal energy remains as relevant to the energy mix of many countries. The top six coal-powered countries of the world include China which derives up to 70% of its energy therefrom. Russia, Australia, and even the United States, which generates 30% of its energy from this source, are coal-powered countries. As of 2011, America reportedly operated 589 coal power stations that produced 1.5 gigawatts of electricity. Nigeria’s miserable energy supply can be increased many times by simply exploiting its coal reserve.
One important and perennial obstacle to the maximally beneficial exploitation of Nigeria’s mineral resources is the central control of these resources. A constitutionally-backed exclusive list that vests the ownership and control of mines and minerals, including oil fields, oil mining, geological surveys, and natural gas” on the central government violates the spirit and purpose of federalism, which indeed the constitution pretends to stand upon.
Furthermore, as legal practitioner Olasupo Shasore stated, rightly, in a December 2016 paper, “the central control of the country’s mineral by the Federal Government in itself is also… a hindrance to the success of the sector as a source of economic development for the country…Centralism in policymaking creates social inequities and economic injustice which in turn, ensure that local communities set up mental and attitudinal barriers to central control…” He concluded that “we must reduce centralism in resources.”
In 2016, a committee on ‘Roadmap for the Growth and Development of Nigerian Mining Industry’ set up by the Kayode Fayemi-headed Ministry of Mines and Steel developed a policy paper to transform the minerals and mining sector. Besides his own vision of how to go, Mr. Adegbite will do well to take a look at the paper-and indeed relevant documents from other sources – for ideas that can help make his ministry more useful to the country.
In the main, there is so little time left for this country to catch the train of development. But if the government walks the talks of its officials, Nigeria can quickly earn its rightful place among countries that matter in the world.