11 February 2007

Nigeria: Hidden Treasures - Nigeria Opens to Outside World

Lagos — The decision of the Federal Government to declare 2007 as the Minerals and Mines Year, was premised on the fact that the sector should be thrown open to investors from across the globe. With enormous opportunities in the sector to grow the economy and depend less on oil, an international mining conference was held in Abuja penultimate week to put potential investors on notice. Godwin Haruna writes

From the famous mining capitals of the world in the United States, Canada, South Africa and other mining-dependent economies such as Chile, China, India, Japan and many others, they were all in Abuja. The roll call also included both local and international financial institutions. Their mission was to attend the two-day International Mining Conference with the theme: "Unearthing Nigeria's Hidden Treasures", which held at the Congress Hall of Transcorp Hilton Hotel.

The conference was organised by the Ministry of Mines and Steel Development to showcase Nigeria's multiple mineral deposits to the outside world. It was a well-attended meeting in which eager participants were glued to their seats for the various presentations spanning two days.

Some of the participants also visited two sites of the mineral deposits on excursion to have a feel of where the real action is. The selected sites for the trip include the Okaba Coal Mine in Kogi State and the Tsohon Birnin Gwari Goldfield in Kaduna State.

The Kogi District covers about 225,000 hectares of Anambra Basin. It is said that two areas within the district have been explored to a limited degree. The more northern of the two areas, Ogboyaga, has the greatest amount of available drill data, where 27 holes have been drilled and cored. The Kogi area of interest is Okaba where there is a small idle surface mine.

The Tsohon Birnin Gwari gold site is within the Kushaka schist belt of northwestern Nigeria. It was an active gold mine in the 1930s where over 600oz of gold were produced. The gold mineralisation is within a series of metasediments that lie in a number of isoclinal fold structures trending N-S and with a strong foliation parallel to the axial planes of the folds. The Kushaka belt is also associated with another prominent site of gold mineralisation refereed to as Kwaga site.

Beyond these, Nigeria is reputed to harbour more than 34 mineral resources scattered in all the states of the federation. Among them are tantalite, kaoline, mica, baryte, bitumen, diatomite and a number of them.

Declaring the conference open, President Olusegun Obasanjo, who was represented by Obong Ufot Ekaette, Secretary to the Government of the Federation, stressed that his administration declared 2007 as the Minerals and Mines Year (MAMY) as a practical demonstration of the critical need for the strategic management and development of Nigeria's extensive mineral resource endowment.

According to the president, the idea of MAMY was to provide a platform to consolidate a broad spectrum of initiatives, which have been implemented to create a conducive and competitive environment for mining investment; raise consciousness about the opportunities and challenges of the evolving mining sector; and engage pertinent stakeholder communities in ways that enhance returns on investments.

He said although the initiative was still young, MAMY has already ushered in a series of remarkable gains. This, he added, include the commencement of the first module of classes marking the inception of the Nigerian Institute for Mining and Geosciences after a long time.

Obasanjo reiterated that the investment conference was a demonstration of the administration's abiding faith in the private sector as the engine of growth of the national economy.

"The last quarter of 2006 witnessed the privatization of core assets of the Nigerian Mining Corporation, which had been a major vehicle for government control of the mining sector. In addition, a number of initiatives have been put in place to promote optimal private sector participation and accelerate foreign direct investment in the sector". he stressed.

He told the diverse conference delegates that the measures enjoy the force of law and are stipulated in the Minerals and Mining Act, which the senate has just passed into law, adding: "Of a truth, we can now say that Nigeria is 'open for business' as a choice mining destination".

The president acknowledged that Nigeria had not featured on the global radar screen as a serious mining destination. He stated that in view of the enormous mineral endowment in the country, the Federal Government has taken substantial steps to build investor confidence and attract mining capital.

"The Mining Cadastre has received scores of applications since its opening and licences will be issued to qualified applicants in accordance with the 'first come, first served' principle now that the law has come into existence. The elimination of discretion and the issuance of permits on the basis of objective criteria is just one feature of the new legislation which is informed by best practice examples drawn from across the globe", Obasanjo said.

He said the Act guarantees tenure security, offers a generous selection of incentives and makes provision for diligent environmental stewardship and community development.

Earlier in a welcome address, Prof. Leslye Obiora, Minister of Mines and Steel Development, stated that the mining industry should be a vehicle for economic growth and should provide for the creation of valuable infrastructure, employment and should contribute to the improvement of the quality of life of the people. Obiora noted that meeting these goals would depend largely on the ability of the sector to access international and local investment funds and commodity markets.

"Although we have economic mineral deposits, exploration and exploitative efforts in the past years either by the private sector or the public mining institutions have been grossly inadequate. Informal artisanal mining, particularly for gold, tin, tantalite, gemstones and small-scale quarrying of industrial minerals are the dominant activities in the mining sector", she said.

The minister stressed further that the overall strategic plan took cognisance of this and as being executed can only lead to a mining sector that is not only prosperous, but also socially, economically and environmentally sustainable with broad community and political support. This, she added, will assist the government in its poverty alleviation programmes and contribute to the general economic development of the nation. She stated that a number of training programmes have been introduced to ensure the fulfillment of expectations in the sector.

According to the minister, they have also initiated an open and transparent information, education and communication campaign targeted at all stakeholders through the promotion of regular institutional linkages, cross-visits and site-visits.

She stated that they have set targets and milestones for activities that would form the bedrock of investment inflows. These include enactment of a new mining law, which the minister announced to the gathering had been assented to before the commencement of the conference. However, needless controversy appears to have dogged the path of the new law as the senate leadership have faulted the procedures leading to its assent.

The law provides for the establishment of a Mining Cadastre Office that will transact business in a transparent and effective manner thereby reducing the processing period of mining and exploration titles. The law, Obiora disclosed, also gives the necessary legal backing to formalisation and assistance to artisanal and small-scale miners. She said applications have been received from about 400 artisanal miners cooperatives intending to buy centre operators.

Another step, the ministry has taken to attract investment flow, she said, is that the Nigerian Geological Survey Agency has started making technical information available to the public. The on-going privatisation of state-owned mining companies, remains another plank in driving investment to the sector.

According to the minister, the intentions of government in this new drive to attract the private sector include promotion of geological opportunities to foreign and local investors; simplification of procedure for obtaining permits and licenses in a transparent manner on a basis of "first come - first served"; ensuring security of tenure, certainty, credibility and competitiveness; ensuring environmental remediation and collection of revenue.

"Investors are invited to note our good mineral potential and attractive geology. Nigeria also has a glorious mining history for minerals like tin, columbite, coal, gold and lead-zinc. Our fiscal incentives are very attractive. Components like tax holidays, import tax exemptions are already in place", the minister said.

She said Nigeria has over 145,000 km of paved road while the railway network has a total of 3505km, which is presently being modernised to standard guage with plans for new routes. She said there are three main deep seaports in Lagos, and the others in Onne, Port Harcourt, Calabar and Warri. She added that there were 17 standard airports with some other airstrips and four international airports.

She gave current power installed capacity in Nigeria as 5,600 mega watts and expressed the optimism that it will get to 10,000 mega watts by the end of the year. "Local costs of fuels power, labour and gas are among the lowest in Africa and investors can be assured of low operating costs and high return on investment", Obiora told the conference delegates.

The Senate President, Chief Ken Nnamani was represented at the forum by his deputy, Alhaji Ibrahim Mantu. Speaking on the occasion, Mantu praised the doggedness of the minister of mines and steel development in actualising the legal framework for the mining sector in Nigeria. He said as someone imported from the Diaspora to become minister, he did not know initially that Obiora was abreast of developments in the country.

He said the minister had mounted so much pressure (or was it lobby?) on him to have the Mining Act passed at an incredible speed. He stated that the new Act now doused in controversies over the procedure adopted in its passage, was given accelerated hearing in both Houses of the National Assembly because of the socio-economic importance to the nation.

Mantu observed that the nation's mineral endowments were located in the manner of the country's federal character in such a way that when full exploitation begins, no part of the country would complain. According to him, the mining of the minerals will put to rest the squabbles over oil and resource control agitations.

He expressed his delight over the avalanche of available information for investors on the different minerals and where there are located. He expressed the willingness of the senate to support the efforts of the investors to create wealth for Nigerians.

Also speaking in a keynote address, Mr. Pranod Mittal of Global Steel, Uk, confessed that when he first signified his interest of coming into Nigeria, his family could not understand why. This, he said, was because of the bad image problem of the country, which associated Nigerians with scams.

However, Mittal stated that since his foray into the country, he has been transformed into a great believer of the country and would like it to grow economically. He said the president has restored transparency and openness to governance and this has re-invigorated investors' confidence in the country. He harped on the role of education in the development of any country and urged leaders not to treat issues on the subject with levity.

Chief Cornelius Adebayo, Minister of Works, Transport and Aviation, who chaired the afternoon session said the administration has not toyed with laying a solid infrastructural foundation upon which the nation's industrialisation could take off. He said the amount of road construction being undertaken by the administration in this dispensation has never been witnessed before now.

Adebayo stated that rail construction has also been re-energised just as measures have been adopted to ensure air safety in the country. According to him, the environment has been made conducive for investors to reap from their investments in the sector. He added that investment opportunities are such a long term investment that they do not mature until such a long time.

Also speaking during the afternoon session, Mr. Mandla Gantsho, Vice President, Infrastructure, Private Sector and Regional Integration of the African Development Bank, noted that Africa has become more attractive for investment opportunities in recent years. Gantsho maintained that government remained the catalyst and driver for investment.

He stated that it is a paradox that African countries with vast mineral wealth are among the poorest in the world. He stated that the mining sector offered huge opportunities to unlock Africa's economic potential and urged the delegates to take advantage of Nigeria's huge mineral deposits.

In his own address during the committee session, Mr. Ruel Khoza from South Africa, noted that globalisation could not be reversed and that it is much more diverse than hitherto thought. He opined that Asia's foray into the continent's economic arena was not an entirely bad idea. He said it was time Africa threw herself into the globalisation ring.

However, Khoza noted that as at the moment the equation was so unbalanced since the developed nations own the field, the ball and the whistle, a situation that has made things difficult for less endowed players in the world. He posited that if people want to work in Africa, African people must define the terms of reference. "In as much as we need investments, this rule must be kept", Khoza declared. He said South Africa has a long way to go in terms of mining development, but that there was steady progress towards achieving the ideal.

Many other papers such as the Legal and Regulatory Framework chaired by the eminent jurist, Justice Chukwudifu Oputa, Mineral Endowment, Investor Confidence, Institutional Development were presented at the conference. If MAMY 2007 opened Nigeria's huge mining opportunities to the world, the international mining conference surely cleared the way for a diverse group of foreign investors to participate in Nigeria's hidden treasures.

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