Interview

Bandits now control mining sites, collecting royalties from companies —Baraya

Nigeria is moving towards alternatives to oil with solid minerals as a viable option. In this interview by ISAAC SHOBAYO, the Head of Corporate Operations and Communications of a major mining company in Jos, Plateau State, Elipse Group of Companies, Daniel John Baraya, speaks on the prospect and challenges of the sector. Excerpt

In some parts of the country, especially in the North West and North East, bandits are actively involved in mining, thereby fueling insecurity and economic loss to the country. Don’t you think this might hamper the efforts of the federal government to rejuvenate the sector?

You know, when the banditry thing came up a few years ago, the first business that suffered was mining because they didn’t stay in towns and cities. They stayed in the bush, and our business is in the bush. So we found out that we lost a lot of people who needed to go there for their daily income, and they fell victim to the activities of this banditry. And I think, apart from farming, the only other area that suffered economically and even psychologically was mining. I think they are growing now to the point where they are, like you said, collecting royalties and basically exploiting legitimate mining companies. It is either you pay or you will not operate. So most people just quietly leave, and they acquire those areas.

Now, lots of mining sites have been fully occupied by bandits. So ,the government really needs to do something about that. So that we know that you can go into the bush, do your business, and come back safely. The most pernicious part of it is that they brought kidnapping into the whole mix, and if they, by mistake, catch anybody and realize that this person is a miner, they will feel that they have hit a goldmine.

If that avenue is locked up because of insecurity, that means that investment is gone. So, if the government is serious about it and they want investment in the sector, they have to do something about it.

How do you think the federal government can drive the process of repositioning the mining sector to achieve its goal?

Well, we have been scratching the surface so far in this country. And we have been doing that mostly without government support. Now that the government has decided to come in and support us, it’s a good thing. It’s a welcome development. Our only prayer is that they will touch those areas that are really the main choke points that are disturbing the industry. The pronouncements so far that the government has been making are very encouraging. And the area we hope that they will focus on is number one: the regulatory environment. That is the main problem holding this industry back. Of course, the Minerals and Mining Act of 2007 is not enough with the modern realities on the ground. It’s not capturing the actual operational problems that we’re facing; I’ll give you an example. You can go to a place and identify a mineral; you are expected to start exploration. Now, when you do that, you’re supposed to go and file an application with the ministry. But before they give you any license, they will expect you to go to the community and obtain their consent, which is good. Now, the problem with that is who is in the community. Sometimes there is a landowner who farms on the land or does activities on the land; it’s his land. Maybe through history and tradition, it becomes his land, and then there are traditional rulers.

Now, there is always a problem. If you collect the consent of that land owner and take it to the ministry tomorrow, somebody will come up and say he is the paramount ruler in the community; he has not given you consent. And the law, as it states, is that you seek consent from the landowners. Now, on the basis of the paramount rulers’ complaint, your licence gets revoked, and the law does not recognize that. So, what we are saying is that one of the key areas that they can help us with is clarifying this point and making it okay if we are going to seek consent from the community, from whom, and which one will protect our interests. If they say to work with the traditional institutions, fine. That means nobody can come tomorrow and say, I’m a landowner; it’s my father’s land, and I did not give you consent.

If they say to work with the landowners, fine. We will work with that; nobody can come and write a petition tomorrow and claim that I am the chief, so I should have a say in the matter. Once that is clarified, it helps and makes it easier. Also, we know what we are doing. And the ministry should take a very strong stand to make sure that this issue is clearly spelled out for the operators to understand so that our business can move forward.

The second issue that we are seriously facing is the issue of illegal mining. illegal mining obviously disturbs both the government and even the operators. You spend a lot of money securing the site during exploration, prospecting, and identifying a mineral. The moment you get to a point where you’re supposed to actually start enjoying the benefits, illegal miners will flood into that place, sometimes with the backing of the traditional rulers. Now you find it challenging to actually evict them because you cannot muster up the kind of resources required to get the law enforcement people into that place. And even if you do, some of those places are very challenging by nature. Because mining is not done in cities, it’s in the bushes, and you can’t say okay; you go to the police station and report. How many police people will follow you into the bush to go and take action?

So we are hoping that the government will really look seriously into the issue of illegal mining and make sure that at least there are mechanisms in place to make sure that it does not even happen in the first place.

In some states, there is controversy over who controls mining between the state and the federal governments, and this is somehow unhealthy for the development of the industry. What is your opinion on this?

The confusion between the role of the federal government and the role of the state governments is a source of concern to most of us in the industry. Now, you are all aware that some state governors have taken it upon themselves to ban mining in their states, which, to the best of our knowledge, is on the exclusive list of the federal government. They have no business doing any of that. But they are doing it. And so far, nothing has been done to stop it or to challenge it. So, it confuses everybody in the industry. We are here; we know that we identify these minerals. We go to the ministry to apply, and they give us a licence. We wake up one day and discover that our investment in billions is being put on hold, banned, or challenged by the state government. Because if you know these things, you will be able to plan ahead of time. if the government is considering changing the laws to allow participation by the state government. What is expected is that they will give us some advanced information so that in our planning we will take into consideration the effect of state government participation. But this is not the case; you will find out about a project that has been going on for years, and one day somebody will wake up and make a pronouncement. And say, I’ve banned mining activity within my domain for some reasons.

For the industry to move forward, there has to be a strong action on the part of the federal government; either they involve the state governments and work together with them. And let us know that now that things have changed, we have to work with the state government, or they will clarify these things as clearly as possible to all the players so that we know who we are dealing with.

The industry is no doubt capital-intensive; what do you think governments can do to motivate investors in this regard?

I told you that we have barely scratched the surface in Nigeria. Mining, as an industry, is a very big part of the economy of Nigeria, not because we don’t have the resources. The resources are there. We are blessed with mineral resources; every state you can count on in this country has abundant mineral sources on the ground. Now, the challenge is that you need certain steps to move it from where it is on the ground to where it’s now useful. For instance, you say there’s copper here. And how do you prove it to that person? For instance, I see some signs that tell me there is copper, and I come to you. I want you to help me so that we can explore these resources. Well, how do I prove it to you? You see those other countries that have developed their industry; they have an entire value chain built around supporting this industry. We have people who are specialists in drilling a particular type of rock; we have specialists who have skills in aeromagnetic service; and we have people who are skilled in interpreting this data. Once you collect the data, you have specialists, and you have specialist labs. Now, if you pick a sample, to get an accurate and, you know, recognized sample that is ISO recognized, you have to send it to South Africa; you have to send it to other places; we don’t have that in Nigeria.

So, one of the critical things that we have to do is get our industry to the level of South Africa, Australia, and Canada in terms of infrastructure. I am talking about assay labs, building the manpower and the skill level that are required in our geologists and mining engineers to be able to come up with reports that you can take outside of this country, and they will agree.

Okay, if the mining sector is properly positioned in Nigeria, how much do you think it can fetch Nigeria in terms of revenue?

Well, I give you an example of Rio Tinto and BHP Billiton. The average capital market capitalization of one or two of those averages is about $200 billion, $100 billion, or $150 billion. Now, if you convert that and compare which company in Nigeria has that kind of market capitalization, none. If you add all the companies in Nigeria, they are not up to half of that. So that will give you an idea of what mining is about. We have these resources, for instance, if you discover an iron ore site that has a billon on the ground. That will give you an idea of the effect mining will have on our economy.

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