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LCCI, others suggest ways to develop solid minerals sector

Miners at work

The Lagos Chamber of Commerce and Industry (LCCI) and other stakeholders have proffered solutions to drive potential investments and harness the benefits of the Nigerian solid minerals sector.

The Chamber in collaboration with other major stakeholders across the mining value chains, including the Association of Metal Exporters of Nigeria, and a group of companies said this would boost economic diversification and revenue earning for the country.

LCCI in a statement yesterday quoted President, LCCI, Dr Michael Olawale-Cole, as saying that the recommendations were to generate insights that would position Nigeria to earn more foreign exchange from solid minerals.

Olawale-Cole said a report by the Nigerian Extractive Industries Transparency Initiative (NEITI), indicated that revenue from the sector to the Federation Account rose by 54% from N75 billion in 2019 to N128 billion in 2020.

“Solid minerals exports in the last quarter of 2021 stood at N13.56 billion, a decrease of 25.95% compared to the third quarter, but an increase of 201.41% when compared with the corresponding quarter of 2020.

“These are confirmations about the potential in the solid minerals sector yet untapped,” Olawale-Cole was quoted as saying.

The LCCI President said highlights from the Organised Private Sector (OPS) showed that the fragmented legislative framework of the 1999 Constitution hindered investments in the solid minerals sector.

According to him, the Constitution, as amended, gives the Federal Government exclusive powers to legislate on mining and solid minerals matters.

He noted, however, that states had enacted parallel mining laws and regulations interfering and usurping Federal Government’s powers and the powers of the Ministry of Mines and Steel Development to regulate activities in the sector.

“Presently, Nigeria only attracts about 0.12% of global exploration investments. The emerging market for Nigeria’s solid minerals includes industrialised and emerging economies of BRICS countries and the G20 countries which created a demand for energy, metals, and minerals,” he said.

BRICS is the acronym for Brazil, Russia, India, China, and South Africa, which are known for their significant influence on world affairs.

The Nigerian banking system has limited exposure to mining, and this probably is due to a lack of sufficient understanding of the opportunities in mining or the complex nature of the sector.

Mining regulations

Olawale-Cole also noted that unstable laws and regulations gave bad signals to investors who would not want to risk nationalisation after they have invested in solid minerals exploration.

He stressed the need for the government to establish a robust fiscal framework for investors and address bottlenecks caused by multiplicity of regulatory agencies.

He also called on the government to tackle security challenges across mineral-rich communities that continue to undermine production and investments.

“There’s a need to invest in refineries for minerals as we cannot continue to mine minerals and export them in their primary state or else Nigeria might remain a crude exporter of minerals, which is analogous to challenges in the oil sector.

“Government and private investors should secure communities’ buy-in in the projects to ensure environmental justice, economic empowerment, and social harmony. These are critical in preventing and replicating the flaws witnessed in the Niger Delta.

“Steel production should be encouraged because mining and metal production could be used to develop infrastructure and reduce import dependence.

“Nigeria must develop mineral commodities markets and dependent instruments to trigger innovation through technology, material science, biotechnology, and supercomputing alloy.” he said.

Government and private investors should secure communities’ buy-in in the projects to ensure environmental justice, economic empowerment, and social harmony. These are critical in preventing and replicating the flaws witnessed in the Niger Delta.

Investment inflows

The Minister of Mines and Steel Development, Olamilekan Adegbite, said a well-governed mining sector with good investment inflows was fundamental to a diversified economy.

Adegbite noted that the solid minerals sector would have been better developed but for the low financial support, and urged the finance industry to invest in mining to impact the economy positively.

He said the National Integrated Mineral Exploration Programme (NIMEP), has further exposed investment opportunities in gold, lead, zinc, battery minerals, barite, and iron ore.

He added that NIMEP, which provides reliable geo-data for investment decision-making, is a short-term initiative to auction the results from existing exploration and plough back the fund into the development of unexplored minerals.

The minister noted that the more sustainable approach was financial intermediation and Foreign Direct Investment inflow into the mining sector.

Adegbite was quoted: “The success of rebuilding the industry to achieve the transformational ambition for shared mining prosperity depends on the participation of all stakeholders, including a vibrant financing industry.

“The Nigerian banking system has limited exposure to mining, and this probably is due to a lack of sufficient understanding of the opportunities in mining or the complex nature of the sector.

“According to NIMEP, solid minerals are capital intensive, and this is evident when a 50-million-dollar investment was used in executing four out of the 44 minerals discovered for exploration in Nigeria.”

“The Ministry would embark on a transformational reform agenda aimed at providing good practice in mineral resource management.”

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