Dele Alake, minister of solid minerals Development, has said the consent of host communities remains a prerequisite for obtaining mining licences in Nigeria and those miners that fail to abide by such rules risk losing their licences.
Alake disclosed this on Tuesday at the BusinessDay Solid Minerals Conference, themed ‘Digging Deeper: Diversifying Nigeria’s Economy for Wealth Creation’, which was held in Abuja.
According to him, the ministry launched the community development agreement (CDA) initiative to promote the welfare of host communities by ensuring that mining companies carry out development and social responsibility for the betterment of the communities, a requirement that would help tackle some of the teething challenges in the sector and unlock its huge potential.
He said: “Last year, I launched the revised requirements for Community Development Agreements. It was the appropriate forum to appeal to holders of mining licences to ensure that they negotiate with the communities in their mining areas and sign the agreements which ensure that the communities benefit from the wealth created by their commonwealth.
“I wish to note, with dismay, that only 18 companies signed CDAs with their communities last year. We hope to enforce the implementation of the revised guidelines in the new year and those found wanting will face stiff penalties.”
The minister noted that central to the efforts to reposition the sector is the establishment of a private-sector-driven Nigerian Solid Minerals Corporation, saying that the process of creating the legislation for the institution has begun.
He disclosed that on February 12 and 13, 2024, the Solid Minerals Committee of the House of Representatives will hold the first policy dialogue on the proposed law to create the corporation.
Govt to hold 25% share in proposed N1bn solid minerals corporation
According to the minister, in working with the legislature to establish the legal and legitimate foundation for the institution, the ministry has resolved to promote a share structure in line with a private sector-led strategy in which the Federal Government is expected to hold not more than 25 per cent.
He said: “The Nigerian citizens will, by public shares, hold 25 per cent, and private investors, each with a maximum of 10 percent of the shares of the N1 billion share capital, will be achieved.
“We are also determined to learn from the pitfalls of the defunct Nigerian Mining Corporation by ensuring that the new company operates according to the values of the market by reducing unnecessary intervention to the barest minimum and motivating its officials to take decisions solely for profitability and capital formation in the sector.”
He added: “Our campaign against illegal mining and call on artisanal miners to form co-operatives and get government recognition, support and legal basis to mine is yielding fruits. To date, there are 2,329 registered artisanal miners co-operatives in the country. In 2023, 123 co-operatives were registered. Significantly, 77 of 123 opted for registration following my appeal to them to join hands with the Federal Government.
“The Ministry provides extension services to these co-operatives by improving their book-keeping skills and drilling techniques. I wish to further urge artisanal miners to come together and register as co-operatives.
“To ease the operations of this sub-sector, the Ministry has licensed 986 buying centres across the 36 states of the Federation. Plateau, for obvious reasons of its long mining history, has 315 centres followed by Federal Capital Territory, 224 and Lagos, 108.”
He said efforts were also being made to improve the Nigerian Mining and Minerals Act 2007 to accommodate the changes over the years and make it more amenable to national priorities.
Alake said: “Meanwhile, the ministry continues to facilitate the processing of applications for permits to refine minerals and to process and purchase. Last year, no fewer than 499 licences were granted to applicants involved in the business of purchasing and sales of minerals.
“Predictably, applications for the purchase and sale of lithium topped the list with 146 licences, followed by gold, 91; tin, 46 and coal, 32. Other minerals for which licences were granted include Tantalite, Iron Ore, Kaolin, Feldspar, Beryl, baryte, Columbite, Mica and Aquamarine.”
The minister, commending the management of BusinessDay Media Limited, said that it epitomises responsive journalism.
Insecurity, poor regulation threaten Nigeria’s mining sector – Experts
In his remarks, Frank Aigbogun, publisher of BusinessDay Media Limited, expressed optimism that Nigeria’s solid minerals sector would become the next economic powerhouse, rivalling the significance of crude oil.
He said the Federal Government must also demonstrate strong political will to address the menace of illegal mining, which has hitherto stopped the sector from contributing meaningfully to the nation’s revenue.
According to him, a secure and enabling environment will attract investors into the sector, especially in communities where such resources abound.
He said: “These are areas that are full of potential. Let me tell you, in those days, you can go in there and mine, even if you are alone, nobody will attack you. If the government is to derive revenue from those resources, it has to take security seriously to protect the people and their investments and to attract more investors to come into mining.
“In finding solace for the economy of Nigeria, we must begin to think towards harnessing the great potentials in the solid minerals sector to boost the nation’s economy. We engage between the government and private sector in a period of solid minerals to deliver huge results that we see around the world.
“We have people who are facilitating transactions and of course we have those who are watching as well, just to ensure that as we grow and expand the mining sector, the solid mineral sector in Nigeria and get it ready for significant inward investment that we are also looking after the people the communities that the host communities for many of the minerals that we’re talking about.
“I have absolutely no doubt, especially given the huge potentials in the solid minerals sector, the ones that we have seen already, and the ones that I believe will be discovered in the months and years ahead.
“At Businessday, we pride ourselves on the work that we do, engaging with government and engaging with the private sector for the full benefit of the economy of Nigeria that is why we have put this together to enable stakeholders to brainstorm. We have set the stage for what I believe would be a very successful, productive conversation and dialogue here today.”
Charles Anosike, director general of the Nigerian Meteorological Agency (NiMet), said mining activities are mostly vulnerable to weather conditions, as mines are often located in geographically and climatically challenged locations.
Represented by Obende Eleazer, assistant general manager/public relations at NiMet, Anosike said weather conditions impact mining operations, posing risks that can compromise workers’ safety and lead to disruption in productivity.
“As the climate changes, extreme events are growing in frequency and bringing challenges to mining safety, productivity and profitability. It is however interesting to note that the federal government is already taking some actions in this regard,” he said.
“Meteorological information supports effective planning and optimisation of mining activities, including scheduling operations based on favourable weather conditions and managing inventory efficiently. Weather-related disruption can significantly impact the supply chain logistics of the solid minerals industry,” he added.
According to him, NiMet’s establishment Act 2022 gives it the impetus as a regulator of all aspects of meteorology in Nigeria to commercialise meteorological data by partnering with the private sector.
Stakeholders who spoke during a panel session decried the impact of insecurity, and poor regulation on the sector, saying it may hamper the country’s effort to attract needed investments.
They said there was a need for the government to create an enabling environment to attract investments into the sector.
For Kayode Falasinnu, chief executive officer of Ava Capital Group, the rising cases of insecurity across the country pose a huge setback to exploration activities in the country.
He said: “Investors need the assurance that rules won’t change in the middle of the game. And what we’ve seen so far is we have not seen strong prospects. What we have seen is that most mining activities are carried out without the regulatory authorities knowing and without enforcing the rules, so we need an enhanced regulatory system.
“Also, another extremely important point is the need for community engagement and social responsibility. In that location where you have mineral resources, investors should be made to know the importance of investing and engaging the community, employing people and paying your ground rent. Because when a community feels exploited, they may take to arms.
“If mining will be done the right way, it is so important that issues of community engagement are taken seriously. We need to also ensure that the environment is protected from harm and degradation as a result of mining activities.”
Malami Uba Sa’idu, president of the Geological Society of Nigeria, said the sector needs more professional advisors as many trained miners have left the profession to accept other jobs.
“There is a human capacity gap in the sector and that is what we push out to confront. We have seen that in other climes, there are institutions and exams for accreditations, for competence; there are standards and templates for importing minerals that are acceptable,” he said.
Amina Sijuwade, counsel at ADVOCAAT Law Practice, stressed the need for reforms that could scale up regulations, capacity building and community development.
She said there was a need for devolution of powers and benefits of the mining activities to state and local government levels.
