With illegal mining sites thriving in many states of the country, the move by the federal government to reposition the solid mineral sector, could not have come at a better time than now that the economy needs a more robust diversification. In furtherance to this, the government has taken the bold step by revoking the operating licence of 1,633 mining title holders, for failure to pay annual service dues to the government’s treasury. Out of this number, are 536 exploration licences, 279 quarry licences, 787 small scale mining licences and 31 mining leases. Minister of Solid Minerals Development Dele Alake while announcing the action, said it was aimed at sanitising the sector and free up space for new investors who are ready to live up to the required expectation that will boost the economy.
This is a welcome development. The solid minerals seems to have become an all-comers affair with no clear-cut guidelines to regulate the operators, with the economy losing so much in revenue. The minister has also warned that failure to heed the new order will attract prosecution, stating that notice to defaulters had since been published in the Federal Government’s Gazette Number 178, Volume 110 of October 10, 2023. The mandatory 30 days given to the operators is said to have expired since November 10, 2023. And government says it is not ready to bend or break the rules for violation and non-compliance, but determined to enforce the law as deterrent to defaulters. For example, holders of the exploration title are required to pay N1,500 per cadestral unit, not exceeding 200 units, while those holding mining title covering more than 200 units pay N2,000.
Altogether, the move to revoke the mining licences of defaulters is said to be in accordance with Section 5(a) of the Nigerian Minerals and Mining Act 2007, The Act stipulates a rational system of administering mining titles transparently and comprehensively to ensure a seamless transition from reconnaissance to exploration of mineral extraction in the country. But illegal miners have flouted these rules with impunity. This has been the case in Zamfara, Kebbi, Ondo, Ekiti, Kogi and many other states. It is unacceptable. Nigeria is currently reported to be losing billions of dollars to illegal mining, and failure of successive governments to fully exploit the nation’s abundant solid mineral. According to statistics, Nigeria stands to earn over $50 billion annually from solid mineral deposits. But this is only achievable if the necessary framework and adequate security are put in place.
Despite the huge solid mineral resources, the sector contributes less than one percent to the country’s Gross Domestic Product (GDP). According to figures from the National Bureau of Statistics (NBS), in 2021, it was 0.65 percent. The performance was even an improvement compared to previous years where the sector contributed 0.45 percent in 2020, and 0.26 percent in 2019. However, the ‘golden era’ of Nigeria’s solid minerals could be around the corner, if concrete policies are put in place and strictly implemented. This has become more urgent now that the economy is in dire financial straits.
Available statistics, Nigeria is endowed with over 400 solid minerals, with over 10 percent of them discovered in commercial quantities. These include gold, gypsum, limestone, bismuth, marble, coal, silver, bitumen, gemstone, talc, copper, iron ore, and kaolin. It is estimated that gold alone could fetch the country N8trn yearly. Besides, Nigeria has about three billion metric tons deposit of iron-ore worth over $1bn, and 27 metric tons of coal worth over $1bn, 2.23 trillion metric tons of limestone and gypsum estimated at over $1.25bn. Optimal exploitation of these minerals will make the economy less dependent on crude oil revenue, and create millions of direct and indirect jobs within the country, as well as boost Africa’s inter-trade, which currently stands at $110 bn, according to 2015 estimates.
This positive outlook will remain on paper until concrete efforts are made by government to boost the economy through solid minerals. It is unfortunate that foreigners have infiltrated the mining sector in complicit with unpatriotic Nigerians. That must stop. The sector requires a comprehensive reform based on international best practices. The Nigerian Minerals and Mining Act 2007 needs review in such a manner that will stimulate keen interest from investors. The present administration should look into recommendations of past administrations to cede control of solid mineral resources to states.
In 2019, the National Economic Council stated that for the economy to receive the necessary boost for recovery, states should be allowed to exploit mineral deposits in their domains. Currently, mineral resources are in the exclusive legislative list, meaning that it only the federal government that is vested to exploit mineral resources nationwide. A basket of incentives is required to promote private sector participation and investment, as well as confidence in the sector. In the face of dwindling national revenue, it makes huge economic sense to accord the mining sector the priority it deserves. Not long ago, a World Bank Report affirmed that Nigeria’s solid minerals sector has the potential to match or even outstrip crude oil as major revenue earner. We urge the present administration to walk the talk in the sector by developing a pragmatic programme of action for the success of the this sector. It must address challenges confronting the sector. It is heartwarming that the federal government has said through the Minister of Solid Minerals Development that it is about to unveil security strategies to spur mining investment across the country. This is timely because insecurity poses a major challenge hampering the development of the sector.