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DIVERSIFICATION: Steering A Troubled Economy Into Safety

By Gregory Austin Nwakunor ( Lagos) and Alemma-Ozioruva Aliu (Benin City)   |   21 November 2015   |   11:30 pm  
mINING

A mining site in Ebonyi

THERE is no doubt that petroleum (crude oil) has contributed substantially to the country’s revenue since its discovery in commercial quantity in Oloibiri, Bayelsa State, in 1956, and more especially, when its price skyrocketed as a result of the Arab-Israeli war in the 1970s.

For over four decades, the Nigerian economy has mostly depended on proceeds from the sale of crude oil. This is at the expense of other sectors such as, solid minerals and agriculture that hitherto, contributed significantly to the economy of Nigeria.

Nigeria is Africa’s top , and the world’s 10th largest oil producing country. It has realised over $600 billion in oil revenues since 1960, a figure, experts say, is greater than the resources used by the Marshall Plan in rebuilding Europe after World War 2.

In May, shortly before he was sworn-in as President, Muhammadu Buhari said he would shift attention from oil to agricultural and mining sectors to create jobs. Buhari said this while receiving Northern Elders led by a former diplomat, Maitama Sule.
He said he would address the problem of unemployment, as it was one of the biggest challenges facing the nation.
The diversification, according to the President, will be captured in the 2016 national budget.
President Buhari gave the hints at a meeting with a delegation of French investors under the aegis of Movement of the Enterprises of France, MEDEF, led by its President, Mr. Pierre Gattaz, in Abuja.

It will be recalled that President Buhari had, during his visit to Paris, met with the investors who assured him of a visit to Nigeria on investment survey.

President Buhari said the policies currently being evolved by his administration would boost domestic manufacturing and attract greater investment to Nigeria’s agricultural and mining sectors.

In 2007, Nigeria launched a solid mineral development policy, which is fundamentally hinged on the Minerals and Mining Act of 2007. However, they were earlier efforts towards the development of the solid mineral sector, albeit with very little success, some of these include:

Experts have argued that given the role played by the solid mineral sector prior to the discovery of oil, it is apparent that solid minerals have the capacity to contribute immensely to the economic development of Nigeria as in the pre-independence years.
They say, for the sector to develop beyond its current level, a critical evaluation cum reform of the policy is imperative.
Thus, the primary objective of the current government policy on sold mineral development is to take maximum advantage of the increase in international commodity prices and the global resurgence of exploration activities, coupled with the potential benefits to the Nigerian economy as a whole, that has for too long depended mostly on oil revenues –Hence the need for diversifying the economy from over reliance on oil.

According to NEITI (Nigerian Extractive Industry Transparency Initiative) audit report on solid mineral operation in Nigeria, there are six buying centres, nine dredging companies, 11 exporters of solid minerals, 14 medium scale mining companies, 25 commercial quarry, 54 construction quarry, eight quarry for manufacturing giving a total of 137 activities in the solid mineral sector of the Nigerian economy.

Report on the Physical and Process Flows in Nigeria Solid Minerals Industry as at 2011 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
.

It would be recalled that in 2014, former President Goodluck Jonathan in Benin City, Edo State said about 44 new mineral deposit had been discovered in 800 locations across the country. 
 He was a guest at the 50th Annual International Conference and Exhibitions of Nigerian Mining and Geosciences Society (NMGS) in Benin City.

He said then that the implementation of road map for the development of solid mineral sector in 2012 has led to increased sustained flow of Foreign Direct Investments (FDI) in exploration and extraction or minerals- which included coal, gold, iron and ore.
A public affairs analyst and Director, Justice Research Centre (JRC), Donald Inwalomhe, told The Guardian that one way out of the country’s economic challenge is a review of the Nigerian Minerals and Mining Act 2007, 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 State and prohibits unauthorised exploration or exploitation of minerals.
“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.”
Inwalomhe said the Act should be reviewed to accommodate host communities, local governments and states.

Osun State, like many others in the country, has potentials to be great, sadly, every successive administration has failed to harness the God-given resources, particularly, large deposit of gold scattered in various communities of Atakumosa west and East council areas.

The Guardian learnt that there is availability of the precious metal buried in the jungle of Atakumosas, which is capable of transforming the impoverished state. All over the communities, you are sure to have a taste of the activities of illegal miners, scavenging for the precious raw ornaments. There is high level of degradation to the environment.

From Igun to Ijana, Iperindo to Osu and Owu-Epe, there is a high level of poverty and deprivation due to the absence of social amenities, including portable water, motorable roads, and functioning health facilities, though there is large deposit of gold.

While in Edo state, gold is found in Atte, Dagbala and Ososo communities and as far back as 1990,illegal miners have been exploring these resources with nothing to the community in the form of corporate social responsibility (CSR).
There are also large deposit of limestone, Kaolin, Marble, lime, Dolomite, Tourmaline Feldspar, precious stone, Iron-Ore, bentomite and several others.

“Edo State has an abundant supply of some of the most beautiful and durable marbles in the world. Although the exact size of Edo’s stone industry is unknown, there are more than 60 known deposits of marble, with 35 different types in 40 different colours. Edo’s Chesht and Khogiani marbles have been favorably compared to Carrara marble, an Italian marble that is considered to be one of the finest in the world.

Approximately 80 percent of Edo marble is exported as rough-hewn blocks and is often re-imported, mostly from UK, as higher-value polished marble products for Nigerian reconstruction projects. The Edo marble industry in Akoko-Edo, Etsako West, Etsako East, Owan East and Ovia South West lacks proper equipment, has little technical knowledge, and uses poor extraction methods. Those issues often degrade the value of the marble and destroy a large portion of the stone that is quarried. In response to the situation, an entire day of the conference was devoted to technical skills development for local quarry operators and processors.
“Increased investment in the Edo marble sector could address the need to modernize the extraction equipment and process at the quarries. The promotion of modern extraction methods and financial assistance in purchasing or financing more modern equipment would allow existing quarries to begin producing more and better-quality marble from known deposits.”

Inwalomhe urged the Federal government to take a cue from Botswana in diversification of her economy. The country (Botswana) has, over an extended period since independence and the subsequent establishment of its diamond mining industry, managed its mineral wealth carefully and has used taxes; royalties and dividend revenues to fund managed structural change within its economy, infrastructure and society. In the past few years diamond cutting and polishing factories in Botswana have been established in an effort to diversify within the diamond industry and create additional employment opportunities. In addition to the diamond Manufacturing Company established in 1980 and currently employing hundreds of workers. Two more factories were recently opened at Serowe and Molepole. Teemane Diamond Manufacturing Company in Serowe.”

Also commenting on the issue, the Palace Secretary of the Otaru Palace in Igarra, Elder Folorunsho Dania informed The Guardian, “those who into it just come and inform us that they are operating here. They do something for the community but just too little to make any impact in our community. The palace has written to them severally but they tell us they are accountable to the federal government. We feel the federal government should make it compulsory that the needed industries for the resources they excavate should be built here so that jobs can be created for our youths and our people.”

The Edo State Government recently said that it had identified about 200 solid minerals in different parts of the state awaiting exploitation. 
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.

The Nigerian Gold Mining Company, a subsidiary of Nigerian Mining Corporation and Livingspring Mineral Promotion Company Limited are some of prospecting firms that had explored gold in Atakunmosa West in recent past.

To prospect for gold on any land, miners, working in collaboration with middlemen, who buy from them, and later sell the product in the black market in Ejigbo, Saki, Ilesa, Ife, Jos, and neighbouring countries, including Ghana, Benin Republic and Niger Republic.
The former Special Adviser to the Governor on Mineral and Natural Resources, Mr. Babatunde Ajilore, explained the effort by the government not only to curb the activities of unauthorised miners, but also enhance development of the sector for the overall wellbeing of the citizens.

He noted, “these illegal miners have done lots of havoc on the mining titles that belong to the state without taking permission or paying anything. On these titles, the state government pays royalty of about N50 million to the Federal Government yearly and we will not fold our arms to allow the illegal miners destroy our collective heritage.”

He said apart from being rich in gold and agricultural products, Osun is also endowed with a number of vast other mineral resources such as clay, tantalite, talc, feldspar, kaolin among others.
“This is why the government created the ‘Omoluabi’ Mineral Promotion Company Limited. The government hadmoved far in the exploration investment strategy of gold by entering into an MOU with Andalusian Mining Property of Australia, Consumet Nigeria Limited of South Africa, Preston Technologies Nigeria Limited, Rotimi Obeisun Nigeria Limited among others in order to facilitate the vast exploration and exploitation of the state mineral resources.

However, of all the MOUs, it is the one with the Australian company that holds the highest promises for now as the company has assured of moving to site to give the state its first batch of mined gold. The state is making serious move in stopping the activities of illegal miners who had turned the state to their haven.

Experts who spoke on the issue said wherever illegal mining activities take place; the land will become useless meaning that farmers can no longer grow crops, thereby depriving them of their means of livelihood. It can also lead to erosion and even bigger environmental problems.



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