Minister expresses worry over low investment in mining sector

The Minister of Mines and Steel, Dr Kayode Fayemi has expressed concern over low investment in the mining sector.

Speaking at a workshop on “Contemporary Community Engagement Models in the Oil and Gas Sector: Lessons for other sectors” organised by the New Nigeria Foundation in Lagos, Fayemi, who was represented by his Chief of Staff, Mr Oluwaseun Odewale, Fayemi stated that the Nigerian Minerals and Mining Act 2007, with globally competitive sector incentives has been in place for up to a decade but the sector’s contributions to Gross Domestic Product (GDP) has remained less than ideal, accounting for a paltry sum of about 0.33 per cent in 2015.

He noted that four months after assumption of office, he set up a multi-stakeholder committee to develop a roadmap for the transformation of the minerals, mining and metals sector and the roadmap report, 30 days later, represented the  first major landmark in the journey to transforming the sector and systematic framework of plans and policies towards pursuit of this strategies through value chain growth plan.

The minister said building a competitive mining value chain means firms operating in Nigeria must compete on best quality, competitive cost and global peers.

“However, government and the private sector must share the responsibility of investing in key drivers of success such as the availability of access to public geosciences data that investors required.

“It would be remiss of us not to flag the quick and special support received from Ford Foundation towards better governance for improved natural resource management,” he said.

In his address, the Commissioner for Energy and Mineral Resources, Lagos State, Mr Wale Oluwo, said that the 13 per cent derivation given to oil producing states was not attractive to anyone.

He stressed that the government should focus on how to breakdown the structural rigidities that made it difficult for states and other stakeholders to invest in solid minerals with their money.

According to him,  “The 13 per cent derivation is not attractive to anybody and that is the truth. And also the suggestion that the government can set up structures for people to invest and make profit in the mining sector, I don’t agree because the governments are not business entities. Government cannot do business because it has no business with business.”

He noted that the government should be an enabler, regulator and an organ that provides enabling environment for everybody. He added that “If government is now in business, it shows they are out of tune of what they should be pursuing.”

Oluwo emphasised that this kind of workshop should be regular one, bringing more stakeholders into the fold and working together in order to bring a lasting solution to all the process that will make Nigeria move away from a mono economy to the one that that is diversify, export driven and creation of employment for the people.

In the same vein, the Commissioner for Commerce and Industry, Ogun State, Chief Bimbo Ashiru, said Nigeria was endowed richly with economic natural resources that are widely distributed across the six geopolitical zones of the country and mining is done virtually in all states, and has been a key driver of the economic growth and development process.

“It is pathetic that the discovery of crude oil has drastically reduced the performance of the solid minerals industry, even to the extent that the contribution of mining of solid minerals to the country’s GDP has been declining until lately when the states were allowed to participate in the sector , thereby arising for the newly inaugurated roadmap for the growth and development of the mining sector.

“Our past concentration on the oil sector has led the Nigerian economy to become a mono-product economy and hence did not allow the past governments to attend to global challenges that evolved in the areas of solid minerals development,” Ashiru stated.

He stressed that the major constraints militating against the mining sector in the country are the Mining and Minerals Acts, classifying the mineral resources on the Exclusive list, insufficient exploration investment, non-involvement of state in the process that lead to granting of Mineral Title to prospective holders, issuance of exploration leases covering large expanse of land outside of their target minerals, thereby preventing investors from having access to proper documentation and over reliance of the country economy  on crude oil.

He reiterated  that, the solid mineral sector is key in terms of uplifting the general economic standard of the country if properly annexed, beyond boosting the GDP of the country.

Ashiru called for reorientation on the part of government both Federal, States and the citizenry in order to adequately tap the benefit of the sector.

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