“Nigeria Beyond Oil” – Text Of Speech On The Three Years Stewardship Of The Minister Of Mines And Steel, Abubakar Bawa Bwari
MONDAY, 14TH JANUARY, 2019.Protocols and Introduction
It gives me great pleasure to address you on the activities and achievements of the Ministry of Mines and Steel Development, and the Mining Sector, in the last three years of our stewardship.
2. Looking back, there is no doubt that so much has changed since November 11, 2015 when President Muhammadu Buhari assigned the responsibility of running this ministry to Dr Kayode Fayemi, now Governor of Ekiti State, and my humble self.
There is a new sense of hope and a resurgence in mining activities that signal a bright future for the sector.Our Mandate
3. At the inception of this administration, President Muhammadu Buhari, assured Nigerians of his commitment to diversify the economy, using mining as one of the arrowheads of this effort. The Ministry of Mines and Steel Development was therefore given the mandate to increase the sector’s contribution to the GDP and it’s capacity to create jobs. However, in order to get a clearer picture of how far we have come in fulfilling these obligations, it is necessary to recall what we met when we first took over the reigns.Challenges We Met
4. On assumption of office, this administration inherited enormous challenges which included the following: Insufficient budgetary allocation; lack of geosciences data; weak institutional capacity of the supervising ministry; limited cooperation between federal and state authorities; limited supporting infrastructure; low productivity; informal mining and community challenges; weak ease of doing business and perception issues; and protracted litigation on legacy assets.
5. As a result, the mining sector, which used to flourish before the discovery of oil, became comatose, contributing only 0.03 percent to the GDP. Generally, morale was very low, investors felt discouraged and the ministry was unable to perform it’s regulatory role effectively.
6. In the last three years, we have embarked on a number of strategic interventions to derisk the sector, and with the support of the Presidency and Office of the Vice President, the Ministry has been able to record the following achievements:Landmark Achievements So FarRoadmap for the Sector
7. As a matter of priority, we developed a Roadmap for the Growth and Development of the Nigerian Mining Sector, in collaboration with stakeholders, to address inherited challenges. The document was approved by the Federal Executive Council in November 2016 and outlines the collaborative actions that all stakeholders must take for the growth of the sector over the next ten years (2015 – 2025).
8. Indeed, in order to enhance the Ministry’s operational capabilities, various FEC approvals were obtained within the period to execute critical projects and programmes in both the exploratory and regulatory aspects of our activities.Addressing Funding IssuesA. Increasing Budgetary Allocation
9. Over the years, poor budgetary allocation made it impossible for the ministry to function, but now our annual budget has risen from N1 billion in 2015 to about N7 bn in 2017. The government further approved the sum of N30bn (approx. $100m) as intervention fund meant to help fund exploration projects to generate critical geosciences data, and other necessary regulatory framework for sectorial growth.
10. We have also secured support from the World Bank in the form of a loan of $150m for funding the Mineral Sector Support for Economic Diversification (Mindiver) programme. A critical component of this will be used to provide technical assistance for the restructuring and operationalization of the Solid Minerals Development Fund, SMDF. The Fund would in turn make finances available to ASM operators through micro-finance and leasing institutions. It is also expected to help in revamping previously abandoned mining projects like tin ore, iron ore, coal, gold and lead-zinc.B. Funding for Operators
11. The Nigerian Mining landscape is dominated by artisanal and small scale miners who find it difficult to get loans from banks because of the high interest rates. In order to assist this group of operators, the Ministry, in collaboration with the Bank of Industry, established a N5 Billion Artisanal and Small Scale Miners Financing Support Fund to make funds available at a concessionary rate of 5%.C. Addressing Revenue Issues
12. A number of measures were also taken to increase the sector’s contribution to the GDP and plug loopholes in the royalty payment regime. A new Mineral Export Guideline was developed to take care of false declarations, and under-valuation of commodities for export. Our goal is to ensure that the true market value of our minerals are charged, based on the content of the mineral in the ore, concentrate, or refined consignment. This will help us get payment for the associated minerals that are often mined and exported without any royalties paid on them.Acquiring Critical Geoscience DataA. Retrieval of Old data The availability of accurate geoscience data is critical to the growth of the mining industry so we have gone to great lengths to provide essential data for the use of mining investors. We finally acquired the result of the aeromagnetic survey that Fugro carried out in 2006 but refused to release due to non-payment. We paid and retrieve these data which covers various mineral deposits across the country and the Nigeria Geological Survey Agency is currently using the data to explore for strategic minerals.
14. So far, they have made some interesting new discoveries which confirm the existence of Base metals in Ebonyi State, and gold in Osun and Kaduna states, in addition to previously known areas of mineralisation.
15. Integrated Exploration Programs In addressing the issue of scarce geological data, the Ministry commenced an Integrated Exploration Programme with the award of N15 billion contracts to five exploration companies for the purposes of exploring priority minerals like Gold, Lead, Zinc, Iron Ore and Rare Earth Metals. Delineated areas arising from these activities would be blocked and concessioned to technically and financially competent mining investors.
16 Drilling Equipment The Ministry also acquired diamond core drilling rigs and assaying equipment for the Nigerian Geological Survey Agency and National Steel Raw Materials Exploration Agency for use in geosciences data generation.
17. Phosphate Prospects In support of the Food Security Programme of this Administration, the Nigerian Geological Survey Agency carried out exploration for Phosphate in Sokoto State and discovered phosphate rich areas that could support the establishment of fertilizer plants. Currently, test drilling is ongoing and we are holding discussion with OCP (largest phosphate producer in the world) of Morocco to carry out cross beneficiation tests for NGSA.
18. Increasing Limestone Reserves During the period under review, the limestone resource base of the country was increased from 2.3 billion tonnes to 10.6 billion tonnes, with occurrences in 14 states, comprising Sokoto, Gombe, Benue, Kogi, Edo, Oyo, Ogun, Cross River, Ondo, Plateau, Bauchi, Akwa-Ibom, Enugu and Ebonyi States. An estimated 4.8 billion tonnes of Marble was also found to occur in the FCT, Nasarawa, Ondo, Edo, Oyo, Kogi, Kwara, Niger and Kebbi states.
19. Coal Prospects. As part of our contributions to the energy policy for the invigoration of the coal sub-sector and the concession of Nigerian Coal Corporation coal blocks, a Project Delivery Team (PDT) has been inaugurated. This is in furtherance of government’s aspirations to ensure that coal fired power plants generate 30% of the nation’s electricity by the year 2020.
20. Technical Cooperation Agreements In our effort to develop the mining sector, we have signed a number of MoUs and Technical Cooperation Agreements with countries with advanced mining jurisdictions like South Africa, Brazil, and China amongst others. Indeed, the NGSA recently operationalised the MoU with the China Geological Survey which has since commenced a nationwide regional geochemical mapping, aimed at identifying new mineral deposits.
21. Industrial Minerals Development A demand gap analysis of industrial minerals used by local industries shows that we import $44. 9 million worth of industrial minerals annually between 2014 – 2016, despite available local mineral deposits. The desire to facilitate local production of these minerals to conserve foreign exchange and create jobs led to the development of a Roadmap for the nation’s industrial Minerals. This presents opportunities for the development of hydrated and quick lime for water treatment; dimension stones for construction; and Calcium Carbonate, Gypsum and Kaolin for the pharmaceutical and cosmetics industries. Also included are Bentonite and Barites for the oil and gas industry.
22. Limestone Reserve It is interesting to note that Nigeria is now self sufficient in cement production as a result of our Limestone reserves. After additional exploratory activities, the limestone resource base of the country has been increased from 2.3 billion tonnes to 10.6 billion tonnes, occurring in 14 states, comprising Sokoto, Gombe, Benue, Kogi, Edo, Oyo, Ogun, Cross River, Ondo, Plateau, Bauchi, Akwa-Ibom, Enugu and Ebonyi States. Similarly, an estimated 4.8 billion tonnes of Marble was also found to occur in the FCT, Nasarawa, Ondo, Edo, Oyo, Kogi, Kwara, Niger and Kebbi states.STRENGTHENING EASE OF DOING BUSINESS AND PERCEPTION ISSUES
23. The Federal Government is fully focused on making it easier to do business in the Mining sector. We have one of the most competitive mining laws in the world, and we continue to collaborate with the Federal Inland Revenue Service to ensure the implementation of the 3-year tax holiday for new investors.
24. We have strengthened the ministry’s capacity to handle investment promotions and mineral trade by upgrading the unit in charge of these matters to a department, with the mandate to promote investment opportunities in the sector and supervise mineral trade. The Ministry has therefore partnered with the Ministry of Finance to develop a new Solid Mineral Export Guideline to address outstanding issues in mineral export administration. The new guidelines shorten the time for processing Mineral Export Permits from two weeks to two working days.
25. Upgrading the Cadastre OfficeIn order to further make it easier to do mining business in Nigeria, the operations of the Mining Cadastre Office has been made more effective and efficient with the establishment of six zonal offices to speed up the procurement of licenses, permits and approvals. The Cadastral System is also being upgraded with the introduction of online mineral title administration to make the MCO more transparent and accessible while also reducing Mineral title processing from 45 days to 15 days.
26. The Ministry addressed issues regarding non usage of mineral titles acquired from the MCO through the implementation of a provision in the Nigeria Minerals and Mining act, 2007 which allows for the revocation of non-performing or defaulting mineral titles. The exercise led to the revocation 2, 595 licenses which were made available for acquisition by interested investors.Addressing Mines Environmental and Health Issues
27. The sustainable management of our mineral resources by ensuring environmental justice, remains a priority of this ministry. To this end, we have prioritised the reclamation of abandoned mine sites nationwide.
28. The Mineral Resources and Environmental Management Committees (MIREMCO), were also reactivated in all the states of the Federation for effective operations. A nationwide monitoring and enforcement of environmental compliance by mining operators was conducted to reduce mining operational hazards.Responding to Earth tremors
29. In response to the frequency of earth tremors in Nigeria, especially in Abuja and its environs, the MMSD acquired high sensitivity seismometers for use in monitoring and detecting earth movements and earthquake related activities locally and internationally. This is to provide timely information and advice to the public and other concerned government agencies. The first batch of these seismometers have been installed at various locations across the country based on geological considerations.Addressing Lead Poisoning
30. In our determination to promote Safer Mining practices, we have been collaborating with Médecins Sans Frontières, also known as Doctors without Borders, in providing medical services, advocacy and capacity building for miners and communities. Last year, we held an international Conference on Lead Poisoning associated with Artisanal and Small-Scale gold mining in the country. The resolutions from the Conference are being implemented, culminating in the establishment of a Centre for Training on Lead Poisoning, in Shakira, Niger State.Cooperation Between Federal and State Governments
31. In order to encourage beneficial participation of State Governments in the mining sector and enhance cooperation with the Federal Government, the Ministry successfully constituted the National Council of Mining and Mineral Resources, the highest policy body in the extractive industry. So far, we have held two editions of the Council which brought stakeholders together to shape the polices and programmes being executed by the ministry.
32. We are also working closely to build the capacity of State governments to structure Special Purpose Vehicles to participate in Mining in their jurisdictions. A two-day capacity building workshop for this purpose was organised in Sokoto State, which attracted representatives from all the states.
33. We believe that these administrative mechanisms has helped in dousing tension between federal and state authorities on issues surrounding natural resource governance.Developing Nigeria’s Gold Value Chain
34. Gold is one of the most smuggled commodities in Nigeria and a great deal of Nigeria’s gold is traded in the international market with hardly any impact on the economy or GDP. We therefore decided to reorganise the gold sector by developing a national gold policy aimed at facilitating formal gold production, trade and exports to ensure regular payment of royalties and taxes.
35. There is also a National Gold Purchase Scheme which is meant to promote the production and refining of gold for purchase by the Central Bank of Nigeria under a Federal Gold Reserve Treasury Scheme which is meant to accredit 10,000 artisans in five states; shore up our gold reserves as the CBN purchases the refined gold under the Federal Gold Reserve Treasury Scheme; produce 175,000 ounces of gold per annum, and increase the earnings from gold by N53 billion thus boosting our sector’s contribution to the GDP massively.Gains of Reforms
36. As a result of these efforts in the last three years, the sector has seen growth in a number of areas, and Nigeria is gradually becoming a mining destination once more. Some of the benefits include:REVENUE GENERATION AND EMPLOYMENT CREATION
37. Increased Sector Contribution to the GDP: Under the President Muhammadu Buhari administration’s strategic interventions, the mining sector has witnessed a steady rise in its contribution to the GDP from 0.03% in 2015 to 0.6% in 2018. Indeed, even during the recession of 2016, the sector was recording growth.
38. According to the audit report of the Nigeria Extractive Industries Transparency Initiative, NEITI, the solid minerals sector contributed N43.2 billion to government coffers in 2016, including N40.38 billion in taxes collected by the Federal inland Revenue Service. In 2017, royalties and fees alone amounted to N3.92 billion with limestone leading in royalties earned by the government. Indeed, the Mining Cadastre óffice which until the advent of this administration in 2015, contributed an average of N600 million annually to the federation account, made N2. 1billion in 2017 alone.Improved Local Production
39. Essentially, the local mineral production index has experienced a boost as more and more private operators are committing huge investments to the sector. A great deal of trust in the Nigerian mining landscape is being demonstrated and formal mining is gradually becoming popular again as seen from the following developments:
40. Gold refineryIn line with our policy of developing the downstream operations of the sector, and following decisions reached at the recently concluded ERPG Focus Lab, the ministry approved the first ever gold refinery license in Nigeria to a private operator, Kian Smith Trade Co. Ltd. The ground breaking ceremony of the plant took place in Mowe, Ogun State, on the 13th of December 2018 and production is expected to start this year. The company will start with a production capacity of three tonnes per month of 99.9 percent gold and one tonne per month of 99.9 percent silver. Most of the gold will be sourced locally and when completed the refinery will provide more than 500,000 jobs in two years.
41. GemstonesAMRAN Mining Company Ltd commissioned the first ultra-modern incubation centre for gemstone faceting in Gwarimpa, Abuja in June 2018. The centre will be training youths in the art of gemstone faceting to enable them establish their own businesses, which should result in more jobs and wealth creation.
42. Iron Ore MiningKogi Iron Limited continues to blaze the trail in the utilization of iron ore. Contrary to previously held beliefs, the company has developed ways of using its iron ore resource to produce high grade steel, proving that apart from Itakpe, – which was meant to feed Ajaokuta – Nigeria has other sources of iron ore for making steel. It plans to build a steel plant at Agbaja is in its final stages.
43. Gold MiningSegilola Resources Operating Limited/Thor Explorations Ltd – operating in Atakunmosa East LGA, Osun State, the company is listed on the Toronto Stock Exchange and has established a proven reserve base of about one million ounces on part of their tenements. Mine development and further exploration is ongoing. The Company plans to commence production of gold in the first quarter 2020.
44. Lead/Zinc MiningSymbol Mining/Imperial Joint Ventures located in Bauchi State is a major Lead/Zinc and Copper prospect. The company’s mined material grades 22% zinc compared to the average global value of 6%. It is continuing with exploration activities to expand its mineral reserves.
45. First Patriot Ltd (Formerly Royal Salt Ltd) located at Ikwo LGA, Ebonyi State, is mining lead/zinc with an estimated reserve of two million tonnes. It has an installed lead/zinc ore processing capacity of 500 metric tonnes of lead/zinc concentrate per day. The Company operates an open cast mine and has concluded plans to commence underground mining by 2019.
46. Barely a month ago, we performed the groundbreaking ceremony of another lead/zinc/copper processing plant in Ebonyi State, owned by Tongyi group. It is also expected to begin operations this year
.47. Nickel ExplorationComet Minerals Group made a significant Nickel discovery in Kaduna State and is set for deep exploration. The company is currently finalizing arrangements for listing on the Australian and London Stock Exchanges for more exploration funding.
48. Tin Smelting PlantTimah Nig.Ltd, a product of a Joint Venture Agreement entered into between Messers Topwide Ventures and Messrs P.T Timah, for the purpose of exploration, mining and mineral processing/beneficiation of tin, intends to set up a processing plant of large capacity as a first step towards establishing a Tin Smelting Plant in Kaduna.
49. Coal ProductionEta Zuma located in Ankpa LGA, of Kogi State is presently mining coal and is also into intensive exploration to determine more coal reserves. The Company supplies coal to Dangote Industries for firing their kilns. Eta Zuma has also successfully developed the production of coal briquettes for household cooking; thus helping to curb the menace of deforestation arising from using wood as fuel for domestic heating.
50. MarbleRoyal Ceramics Ltd has successfully launched a new line of engineered marble tiles made from marble chipping with a total local content of 95 per cent. Its products are comparable to the best anywhere and still cheaper than imported ones.
51. Legacy ProjectsWe have made progress in resolving the legal issues around our legacy projects, particularly Ajaokuta. We have signed a Modified Concession Agreement (MCA) that has finally returned the entity to the Federal Government of Nigeria. Similarly, the issues around the reactivation of the Aluminum Smelting Company of Nigeria, ALSCON, has been resolved in favour of UC RUSSAL, which is now set to commence operations this year.
52. SteelIn our quest to ensure local sourcing of steel raw materials, the National Steel Raw Materials Exploration Agency, undertook the delineation of 7.5million tonnes of bauxite deposit assaying 45% alumina in Mambila Plateau, Taraba State; iron ore diamond core drilling in Yola Nora, Bauchi, kogi, and Kaduna States; and over a hundred core holes drilled for various private companies.531. These projects are geared towards satisfying the current estimated local steel demand which stands at 4.5 million tonnes per annum, out of which only 30% of the local requirements are met by local steel companies using 100% scrap as raw material.
53. It is however pleasing to note that some of the private steel plant owners like the African Natural Resources and Mines Ltd; KAM Steel; and WEMPCO have acquired mineral titles in preparation for steel production, using iron ore instead of scrap iron or steel.
54. African Natural Resources and Mines Ltd, in particular, has invested $600 million in the development of their steel plants located at Lagos, Ikorodu, ogijo, Agbara, Abuja and Port Harcourt. They are also building a captive power plant in Kaduna, using Nigerian coal.Developing Supporting infrastructure
55. The ministry is mindful of the need to develop the necessary infrastructure required for the effective functioning of the minerals and mining ecosystem. These include railways, competitive financing systems, mine and asset security, and related support services which are being developed in concert with other government agencies.
56. We have therefore collaborated with the Federal Ministry of Power, Works and Transport for the re-operationalisation of rail transport services along the Itakpe-Ajaokuta-Warri line; and the reactivation of Ajaokuta’s 110MW Thermal Power Plant which will be used to generate electricity for the plant while the excess is fed into the national grid.
57. We have also commenced the development of mining resource corridors around contiguous States and along key infrastructure like railways, so that we can establish cluster industrial zones for increased economic opportunities and growth. We believe that when States are able to determine their comparative advantage within the mining resource corridors, they will make meaningful infrastructural investments to support our modest efforts.
58. Addressing Illegal Mining and Community ChallengesThe ministry has taken the following actions to address issues of informal and illegal mining;CooperativesThe Artisanal and Small Scale Mining department is working with the MinDiver programme, state MIREMCOs and other relevant MDAs to formalise our Artisanal miners into cooperatives for easier management and monitoring. This will facilitate their access to financial and commodity markets through grants and the establishment of mineral buying centres. So far, out of the over 2000 applications we received for the formation of cooperatives, we have registered 725 of them that meet our criteria after the verification exercise we conducted. Each cooperatives has not less than 10 members and engages about 20 artisans, and this has created over 15000 jobs in the sector.
59. As a result of increased activities in the sector, and the prospect of loans and other facilities that are only available for registered operators, we now have a total of 216 Private Mineral Buying centres all over the federation.
60. Mines policing and SecurityWe have reinvigorated our Mines Surveillance efforts with the deployment of newly trained and empowered mines officers across the federation. We have also established the Special Mines Taskforce team to address challenges of informal miners and conducted sensitization workshops and training for security agencies to help them understand our regulations, so they can identify, arrest and prosecute informal mining operators. We have procured over 70 new Hilux vehicles and distributed these to our offices nationwide, to security agencies for monitoring activities, and to the Mineral Resources and Environmental Management Committees (MIREMCO) across the states.
61. Considering the general security challenges in the country, we partnered with the NSA’s office to review the Explosives Act to check cases of proliferation, pilfering and diversion of explosives. We have also improved the ministry’s collaboration with security agencies, especially the Nigeria Customs Service, in addressing illegal exportation and smuggling of minerals; and the Nigeria Security and Civil Defence Corps in checkmating cases of illegal mining activities.
72. Stakeholder Capacity BuildingUnder the MinDiver program, we have commenced the modalities for capacity building in community-based organizations and other community representatives, helping them to participate in key decisions in mining operations and processes. We are also providing guidance on suitable benefit sharing mechanisms (e.g. foundations, trusts and funds) and educating communities on what to expect from a mining operation, and at what stage in the operation.Other Issues
73. We improved our capacity to promote sustainability in our mining sector by producing the Mining Environmental Regulatory Compliance Handbook, and the guidelines for Environmental Protection and Rehabilitation Programme, to ensure sustainable mining in Nigeria. We are already collaborating with the United Nations Industrial Development Organisation to develop an Action Plan on Mercury in the Artisanal and Small Scale Gold Mining (ASGM) sector of Nigeria.
74.We also ensured the operationalization of a centralized GIS Web portal and ICT Infrastructure upgrade which has led to the automation of our monitoring activities.
75. As part of our collaborations with stakeholders in the sector, the Ministry granted N84 Million to 11 Universities for research development in various areas in the mining and metals sector in July 2018 in the first phase of our research collaboration with Tertiary Institutions.
76. Moreover, after several years, the Nigeria Institute of Mining and Geoscience (NIMG) Bill, 2018 has been passed into law and recently assented to by His Excellency, President Muhammadu Buhari, while the Bill for the National Metallurgical Institute, Onitsha is undergoing processing.
77. The Ministry engaged in some strategic developmental programmes to improve the sector. We continue to support the Miners Association of Nigeria, and Women in Mining in Nigeria, especially in their conferences and workshops. We hope to ensure gender mainstreaming in the mining sector, while ddressing social issues like child labour, conflicts, human rights abuses.
78. Similarly, some trainings and other forms of human capacity development were done to meet the skill challenge in the sector in order to empower our youth and create more job opportunities. In this vein, the Metrological Training Institute Enugu graduated 714 students and trained 60 persons under the Npower programme.
79. On its part, the Nigeria Institute of Mining and Geoscience, Jos graduated 66 post graduate students in the field of Mining Engineering, Mineral Engineering, and Exploration. A total of 157 Nigerian Youth were also trained as Gemmologists amongst others.
80. The NGSA trained 11 scientific officers of the Nigeria Geological Research Laboratory, in Mintek, South Africa for 10 days on XRD, SEM, XRF, Fire Assay and ICP-ores. Forty-nine (49) other staff were also trained on Health, Safety and Environment at ABU Zaria.
This report presents the highlights of our efforts and major achievements so far. I am confident that more successes will be recorded by the Ministry within the remaining period in the life of the present Administration.
Let me seize this opportunity to appreciate the entire staff of the Ministry and its Agencies for their wonderful commitment to duty. I also thank all our stakeholders and development partners for their cooperation with the Ministry and interest in the progress of our country.
We thank the members of the Press for their continued cooperation and patriotism and look forward to more of such partnerships in the period ahead.
Thank you all for listening, and may God bless You.