What have been the main achievements realized by the Ministry of Mines and Steel Development in the last year?
The last year has been challenging due to the COVID-19 pandemic. In spite of this, we have managed to notch some milestones. Perhaps one of the most crucial is the launch of the made in Nigeria barite, which we did in October. Made in Nigeria barite is all about developing the capacity of local barite producers to produce barite that meets the American Petroleum Institute standard. We now have the local capacity to do that, which when fully on stream should save us millions of dollars spent on importing barite.
Recently, we also commissioned a Fire Assay Laboratory, which is a critical analytical infrastructure that supports the mining ecosystem. With the establishment of the Fire Assay Laboratory, we no longer need to take metal ores out of the country for analysis. It is also remarkable that more investors are investing in the Nigeria mining industry. The African Natural Resources and Mines Limited in Kaduna is on the verge of completing its Integrated Iron Ore Mining and Processing Plant with an initial production capacity of 4.704 million tons of steel per annum, which will be scaled up to 5.85 million tons per annum soon. Similarly, the Segilola gold mine project in Osun State operated by Thor Exploration is expected to produce 80,000 ounces of gold annually and has commenced operation. Indeed, our effort at de-risking the sector through the Nigeria Integrated Mineral Exploration Project, NIMEP for private sector investments is paying off. It is quite interesting that NIMEP has discovered new findings of gold, nickel, lithium oxides, platinum, tungsten and sliver, thereby adding new stock to the national mineral inventory. Our bitumen drilling project is also yielding good result. These are just some of our achievements despite the COVID -19 and its excruciating variants which have unleashed multiple economic and social shocks that have led to slow down in global GDP.
What are the main developments in Nigeria’s mining industry?
Besides the ones enumerated earlier, we have also commenced cluster projects in the six geopolitical zones in order to enhance local content along the mineral value chain. This is in line with our mandate to fast-track mineral processing in the country using a cluster approach. Each cluster is being equipped with modern equipment and technologies to support a network of miners, processors, skills development providers, logistics providers, amongst others.
Currently, we are also establishing a complete and comprehensive electronic National Geo-Data Centre, which will include current and historical geoscientific data. The Geo-Data will be easily findable on a global network and accessible in a digital format to all investors and researchers. With regards to gold, we are creating an ecosystem to minimize the high rate of illegal gold mining and smuggling and increase the government’s revenue from the resource. Foreign investors are welcomed to invest in any of the gold value chain.
Why is diversification towards mining important for the economy?
Mining has the potential to surpass oil as a source of revenue and employment for the country, making us less vulnerable to the volatility of the oil market. Mining has the potential to lift millions out of poverty as it offers a better linkage to the rest of the economy than the oil sector.
What is the fiscal environment that Nigeria offers to foreign investors?
We have institutionalized business-friendly incentives to make the Nigerian mining sector very attractive to foreign investors. I doubt if you’ll find any mining jurisdiction that can offer the juicy incentives that we do. The incentives include customs and import duties waiver for plant, machinery and equipment imported for mining operations, tax holidays of between three to five years, free transferability of funds and permission to retain and use earned foreign exchange, capital allowances of up to 95% of qualifying capital expenditure, amongst other incentives. You can’t have it this good in any other mining jurisdiction.
Nigeria is the mining jurisdiction where you can earn one of the highest rates of return on your mining investment. Our minerals are closer to the surface, conferring the advantage of a lower cost of production when compared to other mining jurisdictions.