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Nairaland Forum / Nairaland / General / Politics / Neglect Of Solid Minerals: Why Nigeria Remains Poor (1459 Views)
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Neglect Of Solid Minerals: Why Nigeria Remains Poor by samueld0(m): 5:04am On Jun 29, 2015 |
Economists, geologists and surveyors have long agreed that under the Nigerian soil are wealth and riches untold. But majority of Nigerians are wallowing in poverty. The Nigerian Extractive Industries and Transparency Initiative, NEITI report suggests that there are about 40 different kinds of solid minerals and precious metals buried in Nigerian soil waiting to be exploited. The commercial value of Nigeria’s solid minerals has been estimated to run into hundreds of trillions of dollars, with 70 per cent of these buried in the bowels of Northern Nigeria. Solid minerals President of Miners’ Empowerment Association of Nigeria, Mr. Sunny Ekosin, reveals that Nigeria loses a whopping N8trillion annually in unexploited gold alone. He also says that Ajaokuta remains the key to Nigeria’s industrialisation and that getting it back to work is a matter of patriotism for President Buhari and his team. Ekosin in an interview with Vanguard said: “If Nigerians were taking data seriously, we would have built a database, where we have authentic information. In 2012, the Permanent Secretary of the Ministry of Mines and Steel, came before the nation and said, that from our precious metals alone, specifically from gold exploitation alone, Nigeria is losing N8 trillion ($50 billion) annually.” The failure of Nigeria, since independence in 1960, to put in place a structure that will make the benefits of the exploitation of solid minerals available to all Nigerians has been the bane of the nation. At the moment mining of minerals in Nigeria accounts for only 0.3 per cent of its GDP, due to the influence of oil resources. The domestic mining industry is underdeveloped, leading to Nigeria having to import commodities it could produce domestically, such as salt or iron sheets and billets. According to NEITI’s audit findings, solid mineral deposits are scattered all over Nigeria, with more deposits in certain areas than others. Over 40 million tonnes of talc deposits have been identified in Niger, Osun, Kogi, Ogun and Kaduna states. There are huge deposits of coal ranging from bituminous to lignite in the Anambra Basin of South-Eastern Nigeria. There are lead-zinc ores within the Asaba Area of Niger Delta, while tin, niobium, and lead, are to be found around Oyo and Igbeti, with as much as over a billion tonnes of gypsum spread around Sokoto, Niger, Ondo and Ekiti states. Nigeria’s potentially most beneficial solid minerals are spread around the nation but most of them are in the North. Limestone deposits occur in Cross River, Ogun, Benue, Gombe, Ebonyi, Sokoto, Edo and Kogi states; magnesite in Adamawa and Kebbi states; coal in Enugu, Imo, Kogi, Delta, Plateau, Anambra, Abia, Benue, Edo, Ondo, Bauchi, Adamawa and Kwara states; wolframite in Kano, Kaduna, Bauchi and Niger states; silver is found only in Kano, with kyanite in Kaduna and Niger states; manganese only in the Northern states of Kebbi, Katsina and Zamfara with diatomite found only in Yobe State, while ilmenite-rutile is only in Bauchi, Plateau and Kaduna states; fluorite only in Taraba State with gold in Niger, Kebbi, Kaduna, Kogi, Kwara and Zamfara and a little in Osun. Nasarawa State in the North has been appropriately tagged as Nigeria’s home of Solid Minerals. The state is one of the most naturally endowed states in Nigeria in terms of the availability of economically and commercially viable natural resources. These include clay, columbite, ilmenite, mica, barytes, pyrite, galena, limestone, sodium chloride, ephalerite, silica sand, granites, tantalite, mica, sphalerite, talc, gemstone (tourmaline, aquamarine and sapphire), halcopyrite, topaz, cassiterite, columbite, tantalite, emerald, heliodor, amethyst, quartz, coking coal, marble, and iron ore. Bauchi is another richly endowed state in the North with metal ores, non-metallic ores and gemstones. Other untapped mineral resources in Bauchi include kaolin,talc,tin,quartz,iron ore, gypsum, zircon, calcite, tantalite, chalcoprite, mica, copper ore, limestone, tourmaline, beryl, garnet, columbite, muscovite, aquamarine, topaz, marble, bismuth, wolfromite and others. Yet with these potential money spinning resources, states in the country are starved of funds and are currently facing a cash crunch. Nigeria as a nation is passing through economic hardship as a result of fall in oil prices. The low activity in the solid mineral sector is not yielding the desired financial benefit as there are no records of payment of taxes and royalty to the government. Nigeria is losing lots of resources from untapped mineral deposit as well as from the little that is being mined mostly by illegal miners who smuggle the products out of the country. According to NEITI audit report on solid mineral operation in Nigeria, there are six buying center, nine dredging companies, eleven exporters of solid minerals, fourteen medium scale mining companies, thirty-five commercial quarry, fifty-four construction quarry, eight quarry for manufacturing giving a total of one hundred and thirty-seven activities in the solid mineral sector of the Nigerian economy. Report on the Physical and Process Flows in Nigeria Solid Minerals Industry 2011 prepared by Haruna Yahaya & CO (Chartered Accountants) indicated that there are no adequate records of operations in the sector. The report said “A review of Central Bank of Nigeria and Nigeria Customs Service records on exported minerals showed that there were discrepancies in the value of exported minerals as well as the associated company. From available records of Central Bank of Nigeria, 15 companies exported 9,068.70 metric tonnes of minerals valued at N577, 768,456 while Nigeria Customs Service records showed that 30 companies exported 7,107,099.80 metric tonnes of minerals valued at N11,496,070,691. “Despite the fact that Gold and Barites were being mined across the nation, there is no record to show that these minerals are among the mined or exported minerals. Further finding shows that barites are mined in Benue and Nasarawa states, they are also purchased by multinational oil companies as drill fluids, despite high activities of miners there are no record of royalty payments. “From the available records of the Ministry of Mines and Steel Development, there were no evidence of royalty payment on these exported minerals. The Nigeria Minerals and Mining Act 2007 requires that any exporter of solid minerals must request for permit to export minerals. But in defiance to the Act, there was no available evidence of request for permit or approval to export minerals by the companies,” the report stated. The report further said “The informal players are mostly artisan miners, medium scale operators and illegal miners who hardly keep any record. Some of the minerals mined in Nigeria are exported out of the country by both formal and informal players. There are no official records from ministry of Mines and Steel Development on the actual volume of minerals exported out of Nigeria within the period under review. However, the few records available relates to transactions that were done by the formal players as they passed through the Central Bank of Nigeria, Nigeria Customs Service and Nigeria Export Promotion Council”. NEITI 2012 report conducted by Moore Stephens of LLP 150 Aldersgate Street London signed by Tim Woodward on 31 December 2014 on Nigeria solid mineral said “Artisanal and Small-Scale Mining Department failed to report revenues collected from mining cooperatives and from the Minerals buying Centre. These revenues were selected by the NSWG in the EITI scope through unilateral disclosure of the Government Agency. “This situation led to a significant amount of the discrepancies. Total revenue from the Solid Minerals Sector amounted to N31.449 billion in 2012. The revenue stream from the Solid Minerals Sector is composed of 84.18 per cent of taxes received by FIRS. Mining taxes received by MID and MCO represent 3.48 per cent and 2.24 per cent respectively. “According to the data collected from extractive companies and Government Entities, after reconciliation work, revenues generated from the Solid Minerals Sector amounted to N31.449 billion. These revenues include, in excess of the reconciled revenue amounting to N28.736 billion, unilateral disclosures of companies amounting to NGN 2,003 million and unilateral disclosures of Government Entities amounting to NGN 710 million: Government Revenues from the Solid Minerals Sector increased from NGN 26,925 million in 2011 to N31.449 billion in 2012. Large sector mining was higher in 2012 due to an increase of granite and limestone production respectively to 12 million tons and 18 million tons compared to 8 million tons and 15 million tons in 2011. This was a result of the increase of the consumption of granite and production of cement in Nigeria during 2012. “The Solid Minerals Sector accounted for an average of 0.02 per cent of total export earnings for the year 2012. Zinc and Lead ores account for more than 48 per cent of the Solid Minerals Sector exports. All companies operating under a mining or quarrying license and which make payments to MID in excess of NGN 2 million ($ $12,500) were required to report their payments in accordance with EITI Requirements. As a result, cash flows reconciled for Solid Minerals Sector represent 89.43 per cent of royalties received by MID from the Solid Minerals Sector. MID also collected over 3.41 per cent of the entire Nigerian flows from the Solid Minerals Sector. The selection resulted in 65 extractive companies listed with the Nigerian authorities. For extractive companies operating in the Solid Minerals Sector and which have made royalty payments below the N2 million threshold, cash flows are included in this report through unilateral disclosure by Government Entities. The report said “At the beginning of the reconciliation, the total amount reported by the Government Entities of Nigeria from the Solid Minerals Sector amounted to N49.759 billion. We note, however, that the total net difference between the amounts declared by reporting companies’ and those of the Government Entities amounted to NGN 6,535,199,305 (13%), At the end of the reconciliation, a total amount of N27.560 billion was reported to have been received by the Government of Nigeria between 1st of January and 31st of December 2012. A net difference of N (2.004 billion) (7.3%) remained unreconciled. According to the data collected from Solid Minerals Companies, we have calculated the royalties that should be paid to the MID based on quantum reported during the reconciliation work. The difference between amounts really paid and those calculated amounting to N (12,089,562) and represents (1.4%) of the total royalties as declared by MID”. The inability of states to exploit the resources in their domain is partly traceable to the 2007 Mineral Act which has vested the ownership of solid mineral on the federal government. Organized mining began in 1903 when the Mineral Survey of the Northern Protectorates was created by the British colonial government. A year later, the Mineral Survey of the Southern Protectorates was founded. By the 1940s, Nigeria was a major producer of tin, columbite, and coal. The discovery of oil in 1956 hurt the mineral extraction industries, as government and industry both began to focus on this new resource. The Nigerian Civil War in the late 1960s led many expatriate mining experts to leave the country. The exploitation and exploration of solid minerals are governed by The Nigerian Minerals and Mining Act 2007 (“the Act”) which was passed into law on March 16, 2007 to repeal the Minerals and Mining Act, No. 34 of 1999. The Act vests control of all properties and minerals in Nigeria in the states and prohibits unauthorised exploration or exploitation of minerals. According to the Act, all lands in which minerals have been found in commercial quantities shall from the commencement of the Act be acquired by the Federal Government in accordance with the Land Use Act. Property in mineral resources shall pass from the government to the person by whom the mineral resources are lawfully won upon their recovery in accordance with provisions of the Act. The Minister, amongst other things, is charged with the responsibility of ensuring the orderly and sustainable development of Nigeria’s mineral resources, creating an enabling environment for private investors, both foreign and domestic, by providing adequate infrastructure for mining activities and also identifying areas where government intervention is desirable in achieving policy goals in mineral resources development. The Act also provides for the establishment of the Mining Cadastre Office, MCO, which shall be responsible for the administration of mineral titles and the maintenance of the cadastral registers, and empowers the Minister, by regulation, to determine areas eligible for the grant of an exploration or mining lease based on a competitive bidding process. The MCO shall collect a fee for processing of applications for mineral titles and an annual service fee established at a fixed rate per square cadastral unit for administrative and management services. In other words, the FG owns, controls, monitors the exploitation and exploration of natural solid mineral resources. In economic development mineral resources are the foundation upon which an industrialised economy is built, and industrialisation is essential if Nigeria is to reduce over-dependence on the oil industry – an industry which, despite the revenue it generates, provides employment for just 6 per cent of the Nigerian labour force. The schist belt that covers the western half of Nigeria has proven reserves of gold. Although gold production in this region dates from 1913, colonial mining companies abandoned their activities following the onset of the Second World War. The gold mines have since remained dormant, aside from an abortive attempt at extraction by the Nigerian Mining Corporation in the 1980s, which floundered due to a lack of funds. Artisan miners now account for most gold extraction, but primary deposits that could support mechanised mining have been identified in the north west and south west parts of Nigeria. These deposits are of a relatively high grade, and it is estimated that extraction costs could be as low as $50 per ounce, due to the shallow depth at which they are found. An estimated 10 million tonnes of lead and zinc veins straddle eight of Nigeria’s states, with the 700,000 tonnes in Abakiliki in Ebyoni State representing the most favourable prospect. In the non-metallic minerals category, riches also abound: the building industry is supplied by crushed rock, gravel and sand; glass-making grade sand has been established in many parts of the country; and Niger, Osun, Kogi, Ogun and Kaduna states collectively boast up to 100 million tonnes of talc, a mere fraction of which is used in several medium-sized talc processing plants. Gemstone mining is one area that has seen something of a boom, though again the level of exploitation is running well below potential. Gemstones present include sapphire, ruby, aquamarine, emerald, tourmaline, topaz, garnet, amethyst, zircon, and fluorspar. Bentonite and barite – both of which are constituents in the mud used when drilling oil wells – are also in abundance, with 7.5 million tonnes of barite in Taraba and Bauchi states and 700 million tonnes of bentonite across the country. http://www.vanguardngr.com/2015/06/neglect-of-solid-minerals-why-nigeria-remains-poor/ |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by samueld0(m): 5:05am On Jun 29, 2015 |
Reserves of bitumen represent another under utilised resource, with estimated reserves of 42 billion tonnes or twice the country’s existing reserves of crude oil. Paradoxically, most bitumen used in road construction in Nigeria is currently imported. Coal and tin were among the natural resources mined on a massive scale, with the former being used to generate electricity, power the railway network and meet the demands of regional and international markets. Lead and zinc were a significant source of export revenue, and Nigeria was the world’s largest exporter of columbite. Stagnation in the solid minerals sector cannot simply be attributed to the meteoric rise of oil: poor management by state-owned enterprises – compounded by corruption and an incoherent exploitation of resources – has also played its part. Precious metals are also present in quantities that make them commercially viable. But for all this mineral wealth, Nigeria’s mining industry remains in the shadow of the oil industry. Arc. Musa Mohammed Sada former Honourable Minister of Mines and Steel Development said in an interview while in office that the World Bank project institutional frameworks such as Nigeria’s Minerals and Mining Act of 2007 was put in place to bring mining industries in the country to be in line with global best practices. He said Nigeria’s Steel industry has to be resuscitated for Nigeria to realise its vision of becoming one of the first top 20 industrialised nations in the world by year 2020 The solid minerals sector in Nigeria has long been treated as the poor relation of the oil and gas sector. Compared to the level of investment and development in oil and gas extraction – which has grown exponentially since Nigeria joined the Organisation of Petroleum Exporting Companies (OPEC) in 1971 – mining activity has suffered stagnation, and even decline. While petrol dollars dominate the economy, the National Bureau of Statistics lists solid minerals as contributing less than 1 per cent of GDP, despite significant coal and iron ore reserves, and known deposits of gold, uranium, tin and tantalum. But the vast potential of Nigeria’s mineral wealth has not always been so ignored. Before the oil boom of the 1970s, the economy was largely sustained by the exploitation of solid minerals. International blue-chip mining companies have long since given the sector a wide berth due to its reputation for inefficiency. President Mohammadu Buhari has acknowledged its potential as an alternative to the petroleum industry for foreign exchange earnings, and said he would revitalise its fortunes. The rationale for Nigeria’s renewed interest in exploiting its natural resources is simple. The government recognises that over dependance on oil also leaves the economy vulnerable to international oil politics and fluctuations in oil prices. A simplification of the procedures for attaining mining licenses is key to future development of the solid mineral sector. In the past, efforts to generate growth in the industry have been thwarted by bureaucracy and the absence of a focused federal policy. The emphasis is on providing transparent procedures that will help develop an industry led by the private sector. Tax concessions, deferred royalty payments and 100 per cent foreign ownership of mining enterprises are among the incentives it is hoped will encourage investment. In September 2009 the national president of the Miners Association of Nigeria, Mr Sunday Ekosin, announced that illegal mining had declined by 30 per cent com-pared to previous years, thanks to a renewed commitment by the association and the Ministry of Mines and Steel Development to integrate illegal miners into the mainstream. If the government’s plan to revitalise the solid minerals sector is to succeed, it must first boost confidence in mining titles among potential private investors. In September 2009, Mines Minister Diezani Alison-Madueke told a conference at the London Stock Exchange that Nigeria will soon start addressing a backlog of new mining licenses and will complete a review of existing licenses aimed at weeding out speculators by the end of October 2009. The review aims to open up new areas for qualified mining companies, which will build on new legislation that makes the sector more accessible to investors. But so far this has not been realized. Though the potential rewards for both investors and Nigeria are high, so too is the cost of regenerating the solid minerals sector. If the substantial known reserves of industrial minerals are to be exploited, significant finance and expertise must first be ploughed into the sector. It is estimated that the industry would require an investment of $10 billion a year if Nigeria is to achieve its aim of becoming one of the top 20 world economies by 2020. The government must also take measures to ensure that the exploitation of Nigeria’s mineral wealth benefits a greater proportion of the population than the oil sector has. Further challenges include an inadequate infrastructure and the environmental impact of large-scale mineral extraction. However, offsetting these challenges are the immense rewards a successful revitalisation of the industry would bring: a huge boost to the national coffers; a means of halting the drift of labour from poor rural areas to more affluent urban concentrations; and, most significantly, a viable alternative to the oil and gas revenue that has dominated the Nigerian economy for three decades. If foreign investors are willing to bear the start-up costs of large-scale mining operations – and if the federal government can cement a favourable policy framework to make foreign investment both attractive and tenable – Nigeria’s solid minerals sector could finally shake off the status of oil’s ‘poor relation’ and provide a lucrative, sustainable drive that will set the economy on the road to industrialisation.
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Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by Nobody: 5:08am On Jun 29, 2015 |
Its so true ,buh
President Buhari is busy playing in west germany |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by kazmanbanjoko(m): 5:14am On Jun 29, 2015 |
obejoseph10:pls, go to dis website "www.getsense.com" you need it more than anyone else. 4 Likes 1 Share |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by bogolobango(m): 5:50am On Jun 29, 2015 |
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Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by bogolobango(m): 5:51am On Jun 29, 2015 |
Oh lord of mercy dry dis our oyel so that my lovely country can move forward |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by Sirnokiopee(m): 5:53am On Jun 29, 2015 |
It's damn too long abegi... Summarize am to liquid mineral (coke and fanta)so we go understand am fast. This one too solid for solid mineral news |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by ZeezaRapture(m): 6:42am On Jun 29, 2015 |
kazmanbanjoko: hahahahahahahahah ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() ![]() Three chilled Orijin for you there ![]() Z.R 1 Like |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by niyogeol(m): 8:15am On Jun 29, 2015 |
At Op, there is also glass sand at (Igbokoda); Limestone at (Okeluse) in Ondo state. Also note: Anambra basin (lower benue trough) is not limited to south-east Nigeria only. The schist belt, which trends in N-S direction houses the gold deposit and some other precious base metals in Nigeria! Nigeria is so blessed with mineral resources. All we need is the political will to formulate the right policies that will bring FDI into the solid minerals sector. I can only hope the Buhari led government will revive this great sector that holds the key to our dear country becoming an Industrialised nation. God bless Nigeria! |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by TechRev: 8:27am On Jun 29, 2015 |
Only revenue from Oil is enough to make Nigeria very great not including solid minerals, but because that entity called Nigeria rewards and adores evil, even if you mine all the solid minerals in Africa the Zoological republic of Nigeria will never develop. The Zoo is falling, will fall. |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by Dollyak(f): 8:30am On Jun 29, 2015 |
Op edit the stupid article. Nigeria doesn't have hundreds of trillions of dollars worth of natural resources ![]() ![]() |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by samueld0(m): 8:47am On Jun 29, 2015 |
Dollyak: See this one come to Osun state and see Gold wasting uderground no government to tap from it |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by samueld0(m): 8:50am On Jun 29, 2015 |
obejoseph10: Blame the past government not this new one. Let's wait and hope the new government will look at the direction |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by oduastates: 8:57am On Jun 29, 2015 |
I say , " leave the minerals in the ground" . What have they done with the free oil which has been gushing out free $$$$$$ like tap water. Redemption lies in agriculture and manufacturing. |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by Nobody: 9:04am On Jun 29, 2015 |
When you tap solid finish.. Na you poo we go dey chop |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by Nobody: 10:01am On Jun 29, 2015 |
... I know this country would have been an industrial colony if the whole world was under one government... Xo many resources untapped.. |
Re: Neglect Of Solid Minerals: Why Nigeria Remains Poor by freshdude99(m): 12:51pm On Jun 29, 2015 |
Dollyak:Just read about Kabila's Congo before saying things like this, I bet u would have a rethink dear |
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