Post by Trade facilitator on Feb 9, 2011 4:01:54 GMT 1
Tope Adebanjo is the Country Representative of Tasaree International Limited. He tells TOYOSI OGUNSEYE that the solid minerals sector is the future of Nigeria’s economy.
The Nigerian solid mineral sector is still widely unexplored. Why is this so?
One of the key strategies of the current democratic government in Nigeria for economic recovery is the attraction of foreign direct investment into the country and the diversification of the revenue base of the Nigerian economy. The stated objective of the current administration is the reduction of dependence on oil revenue to about 50 per cent by 2020. Presently, virtually all the foreign direct investments coming into Nigeria are from the petroleum industry, and recently the telecommunications industry.
Even for local investors and financiers, the preferred areas of investment are in the telecommunications and petroleum industries. Local banks not renowned for lending to the real sector of the economy now readily provide financing for any business venture, which is petroleum or communications based. About 80 per cent of all government revenue is derived from the oil industry.
Meanwhile, mining should be one of Nigeria’s major success stories. Instead, it has been plagued by the same factors that undermine the country’s potential generally - deteriorating infrastructure, uncertain government policies and overdependence on oil. Given the huge amounts of capital required by mining operations and the long-term nature of projects, investors cannot be blamed for thinking twice about putting their money into the sector.
The country is trying to lure investors to its solid mineral deposits, which were sidelined in the race for oil in the 1970s. Nigeria has embarked on a new drive to turn its large deposits of sold minerals into major contributions to national income in order to diversify its foreign earnings away from oil.
Do you think solid minerals can sustain the economy like crude oil?
Before oil became the mainstay of the economy in the mid-1970s, solid minerals and agricultural commodities accounted for almost all of the country’s exports. The tin mines of the central plateau region around the city of Jos, and the coal mines around the southern city of Enugu had been opened up by the late 19th Century. But tin production is now down to a trickle, while coal exports slumped from a peak of 3.2 million tones a year in the 1970s to nothing within two decades as successive administrations focused on the oil boom of the 1970s and early1980s.
Proven reserves of good quality coal low in sulphur and ash are put at 2.75 billion tones. Deposit of iron ore is estimated to exceed three billion tones. Bitumen reserves, put at over four billion tones are nearly double the known reserve crude oil while the deposits of gold and other gemstones, including sapphire, aquamarine, emeralds, topaz, tourmaline, citrine, amethyst etc are said to occur in viable commercial quantities in different parts of the country. We have industrial minerals, such as barites, bitumen, kaolin, gypsum, salt and iron ore, among others that could bring substantial foreign earnings.In an interview with Sunday Punch recently the Speaker of the House of Representatives, Dimeji Bankole, said, ‘some states only become active when they return from Abuja, after sharing money. This is unsustainable.’ All the states in Nigeria are fully blessed with abundant solid minerals, if they are partially developed, they will attract foreign investment, sustain their states and create employment opportunities for their citizens.
What are the challenges within this sector?
Risk evaluation is a reality of life in the mining world. Before spending money on new projects, investors and bankers want to know what risks attached to the geology of a certain prospect, or the availability of infrastructure in a particular mining area. The condition of the market into which the developer hopes to sell its commodity is yet another concern. Simmering civil unrest also undermines investors’ confidence. There are also capital considerations. Another factor that may affect investor sentiment in Nigeria mining are aids. However, while the alarming infection statistics are readily available, the impact on the mining industry seems to be a well kept secret apart from generalisations and projections. The difficulty of getting estimates particular to the mining industry and the potential effect on operations have resulted in a big debate.
You said that the business community has been largely ignorant of the economic potential in this sector. Don’t you think it is because the community has found a ‘comfort zone’ in oil?
Nigeria has embarked on a new drive to turn its large deposits of sold minerals into major contributions to national income in order to diversify its foreign earnings away from oil. Recently, there have been key developments affecting the sector that are intended to make it more conducive for private investment. Nigeria is endowed with abundant solid mineral resources of various kinds. The solid minerals sector has the capacity to provide an estimated three million jobs, both in its upstream and downstream sectors. There is local and international demand for solid minerals resources, which provide substantial trade and investment opportunities for both local and international investors. Recently, there have been key developments affecting the sector that are intended to make it more conducive for private investment.
Your company has been at the forefront of the campaign for the exploration of the mineral sector by governments at different levels. How well has it been received?
Our campaign has yielded positive results. The chairmen and members of the various committees in the National Assembly, Senate and the House under Senator Sekibo and Honourable Barde, respectively and also to Nigeria Miners’ Association, under the leadership of Alhaji Sheu Sani, have performed oversight functions in the solid minerals sector reforms. The mineral resources sector in Nigeria has been reformed to make it an irresistible destination for global mining capital.
What are the features of this reform?
The features of the reform include the development of a new national policy that isclearly defines the role of the government, review of the Minerals and Mining Law to create a regulatory environment that attractive to mining investment capita, restructuring of the National Mining Cadastre – a transparent and efficient mechanism for granting access to mineral titles, strengthening geological data generation and dissemination capability, divestment of government interest in mining through privatisation of mineral assets of public mining corporations and promotion/Marketing of investment opportunities.
Our company has recently designed a learning programme for investors and other stakeholders requiring a background to mineral exploration and mining. The programme provides a non-technical introduction to mining and mineral processing, the evolving image of mining, an introduction to mining investment – understanding the risks, the concept of sustainable development in mining and interpreting mining financial statements.
What is now necessary is for the local investors to position themselves for foreign partnership and international funding by packaging their companies and embarking on value added strategies other than having exploration licences without proof of adequate and factual geo-physical survey, geo-chemical analysis, geo-techniques/exploration and bankable feasibility study of their licensed sites. All of these will afford the local investors seeking foreign partnership what to expect and ways of negotiating other than “we have the minerals” and also afford them the power of negotiation. You don’t get what you deserve, you get what you negotiate for.
What are the investment opportunities in this sector?
The investment opportunities in solid minerals sector are enormous – some of which are not limited to mining, quarry, gemstones trading, smelting and refining, mining training school, trading metal exchange, sales of mining equipment, trading in scrapped metals, prospecting and exploration, recycling and warehousing, polishing and slabbing factory, world class lapidary for gemstones and world class laboratory for chemical analysis.
How well have foreign investors received the potential in the mineral sector?
The limited success of Nigeria’s investment drive in the mining sector can be linked to lack of modern geophysical data, which is the bedrock of modern mining but having carried out first and second phases of the airborne geophysical survey funded by World Bank under the sustainable management of minerals resources project in the ministry of mines and steel development, the mining sector should be witnessing a boom in the next few years if the ministry can create awareness of the availability of the contemporary data in exploration and market very effectively. Investors are watching and waiting in earnest to take calculated risks if adequate contemporary data in exploration are made available.
Pulled from: www.punchontheweb.com/Articl.aspx?theartic=Art201101230305318
For more information on solid mineral export / non oil export contact:
Ismail AbdulAzeez
www.ismailabdulazeez.com
+2348023050835 , +2347033632285.
The Nigerian solid mineral sector is still widely unexplored. Why is this so?
One of the key strategies of the current democratic government in Nigeria for economic recovery is the attraction of foreign direct investment into the country and the diversification of the revenue base of the Nigerian economy. The stated objective of the current administration is the reduction of dependence on oil revenue to about 50 per cent by 2020. Presently, virtually all the foreign direct investments coming into Nigeria are from the petroleum industry, and recently the telecommunications industry.
Even for local investors and financiers, the preferred areas of investment are in the telecommunications and petroleum industries. Local banks not renowned for lending to the real sector of the economy now readily provide financing for any business venture, which is petroleum or communications based. About 80 per cent of all government revenue is derived from the oil industry.
Meanwhile, mining should be one of Nigeria’s major success stories. Instead, it has been plagued by the same factors that undermine the country’s potential generally - deteriorating infrastructure, uncertain government policies and overdependence on oil. Given the huge amounts of capital required by mining operations and the long-term nature of projects, investors cannot be blamed for thinking twice about putting their money into the sector.
The country is trying to lure investors to its solid mineral deposits, which were sidelined in the race for oil in the 1970s. Nigeria has embarked on a new drive to turn its large deposits of sold minerals into major contributions to national income in order to diversify its foreign earnings away from oil.
Do you think solid minerals can sustain the economy like crude oil?
Before oil became the mainstay of the economy in the mid-1970s, solid minerals and agricultural commodities accounted for almost all of the country’s exports. The tin mines of the central plateau region around the city of Jos, and the coal mines around the southern city of Enugu had been opened up by the late 19th Century. But tin production is now down to a trickle, while coal exports slumped from a peak of 3.2 million tones a year in the 1970s to nothing within two decades as successive administrations focused on the oil boom of the 1970s and early1980s.
Proven reserves of good quality coal low in sulphur and ash are put at 2.75 billion tones. Deposit of iron ore is estimated to exceed three billion tones. Bitumen reserves, put at over four billion tones are nearly double the known reserve crude oil while the deposits of gold and other gemstones, including sapphire, aquamarine, emeralds, topaz, tourmaline, citrine, amethyst etc are said to occur in viable commercial quantities in different parts of the country. We have industrial minerals, such as barites, bitumen, kaolin, gypsum, salt and iron ore, among others that could bring substantial foreign earnings.In an interview with Sunday Punch recently the Speaker of the House of Representatives, Dimeji Bankole, said, ‘some states only become active when they return from Abuja, after sharing money. This is unsustainable.’ All the states in Nigeria are fully blessed with abundant solid minerals, if they are partially developed, they will attract foreign investment, sustain their states and create employment opportunities for their citizens.
What are the challenges within this sector?
Risk evaluation is a reality of life in the mining world. Before spending money on new projects, investors and bankers want to know what risks attached to the geology of a certain prospect, or the availability of infrastructure in a particular mining area. The condition of the market into which the developer hopes to sell its commodity is yet another concern. Simmering civil unrest also undermines investors’ confidence. There are also capital considerations. Another factor that may affect investor sentiment in Nigeria mining are aids. However, while the alarming infection statistics are readily available, the impact on the mining industry seems to be a well kept secret apart from generalisations and projections. The difficulty of getting estimates particular to the mining industry and the potential effect on operations have resulted in a big debate.
You said that the business community has been largely ignorant of the economic potential in this sector. Don’t you think it is because the community has found a ‘comfort zone’ in oil?
Nigeria has embarked on a new drive to turn its large deposits of sold minerals into major contributions to national income in order to diversify its foreign earnings away from oil. Recently, there have been key developments affecting the sector that are intended to make it more conducive for private investment. Nigeria is endowed with abundant solid mineral resources of various kinds. The solid minerals sector has the capacity to provide an estimated three million jobs, both in its upstream and downstream sectors. There is local and international demand for solid minerals resources, which provide substantial trade and investment opportunities for both local and international investors. Recently, there have been key developments affecting the sector that are intended to make it more conducive for private investment.
Your company has been at the forefront of the campaign for the exploration of the mineral sector by governments at different levels. How well has it been received?
Our campaign has yielded positive results. The chairmen and members of the various committees in the National Assembly, Senate and the House under Senator Sekibo and Honourable Barde, respectively and also to Nigeria Miners’ Association, under the leadership of Alhaji Sheu Sani, have performed oversight functions in the solid minerals sector reforms. The mineral resources sector in Nigeria has been reformed to make it an irresistible destination for global mining capital.
What are the features of this reform?
The features of the reform include the development of a new national policy that isclearly defines the role of the government, review of the Minerals and Mining Law to create a regulatory environment that attractive to mining investment capita, restructuring of the National Mining Cadastre – a transparent and efficient mechanism for granting access to mineral titles, strengthening geological data generation and dissemination capability, divestment of government interest in mining through privatisation of mineral assets of public mining corporations and promotion/Marketing of investment opportunities.
Our company has recently designed a learning programme for investors and other stakeholders requiring a background to mineral exploration and mining. The programme provides a non-technical introduction to mining and mineral processing, the evolving image of mining, an introduction to mining investment – understanding the risks, the concept of sustainable development in mining and interpreting mining financial statements.
What is now necessary is for the local investors to position themselves for foreign partnership and international funding by packaging their companies and embarking on value added strategies other than having exploration licences without proof of adequate and factual geo-physical survey, geo-chemical analysis, geo-techniques/exploration and bankable feasibility study of their licensed sites. All of these will afford the local investors seeking foreign partnership what to expect and ways of negotiating other than “we have the minerals” and also afford them the power of negotiation. You don’t get what you deserve, you get what you negotiate for.
What are the investment opportunities in this sector?
The investment opportunities in solid minerals sector are enormous – some of which are not limited to mining, quarry, gemstones trading, smelting and refining, mining training school, trading metal exchange, sales of mining equipment, trading in scrapped metals, prospecting and exploration, recycling and warehousing, polishing and slabbing factory, world class lapidary for gemstones and world class laboratory for chemical analysis.
How well have foreign investors received the potential in the mineral sector?
The limited success of Nigeria’s investment drive in the mining sector can be linked to lack of modern geophysical data, which is the bedrock of modern mining but having carried out first and second phases of the airborne geophysical survey funded by World Bank under the sustainable management of minerals resources project in the ministry of mines and steel development, the mining sector should be witnessing a boom in the next few years if the ministry can create awareness of the availability of the contemporary data in exploration and market very effectively. Investors are watching and waiting in earnest to take calculated risks if adequate contemporary data in exploration are made available.
Pulled from: www.punchontheweb.com/Articl.aspx?theartic=Art201101230305318
For more information on solid mineral export / non oil export contact:
Ismail AbdulAzeez
www.ismailabdulazeez.com
+2348023050835 , +2347033632285.
