The Deputy Speaker of the House of Representatives, Hon. Benjamin Kalu, on Monday lamented the country’s over-dependence on the oil and gas sector, stating that its enormous mineral resources largely remain untapped.
Hon. Kalu who expressed the concern during the two-day Policy Dialogue on Solid Minerals organised at the instance of the House Committee on Solid Minerals chaired by Hon. Jonathan Gbefwi, underscored the need for paradigm shift in unlocking the huge deposit of mineral resources across the 36 States of the Federation and Federal Capital Territory (FCT).
In achieving the feat, he stressed the need to address various challenges bedeviling the country, ranging from insecurity, inadequate infrastructure, lack of skilled labour, among others.
He expressed optimism that the proposed Nigerian Minerals and Mining Act (Amendment) Bill, “if passed will represent a turning point for our nation’s mineral wealth. I am also convinced that Nigeria’s vast mineral resources have remained largely untapped, and undeservedly overshadowed by our reliance on oil. Despite boasting over 40 commercially viable minerals, the mining sector contributes a mere 0.3% to our GDP. This, my friends, is unacceptable. Our duty call today is to turn the tide.
“There are indications of a renewed vigor in our mining industry, fueled by a collective will to diversify our economy, create jobs, and unlock the immense potential that lies beneath our soil. The 2016-2025 mining industry development roadmap, aiming to increase the sector’s GDP contribution to 3% by 2025, is already showing progress.
“Projects like the Segilola Gold Project in Osun State governed by a private-sector-led lens are injecting millions of dollars into our economy and attracting much-needed investment. To demonstrate this concisely, in the 3rd quarter of 2023, the Segilola Gold mine in Osun state, Nigeria’s first industrial-scale gold mine posted $118 million in revenue for its owners, Thor Explorations Limited after reporting $71.7 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2022 according to its publicly available financial statements for 2022 and 2023.
“Initiatives like the simplification of licensing and competitive royalty regimes attract global players like Thor Explorations, showcasing the potential for an industrial-scale mining sector. We have done it with gold mining in Osun state, we can replicate it across all the states of the federation and the value chains of 40 other commercially viable solid minerals that abound in the country.”
In the bid to harness the abounding potentials in the sector, Hon. Kanu harped on the need to build a “sustainable mining industry that benefits all Nigerians. We want to see: More jobs being created, particularly for our young people. Increased value addition, with processing and refining happening within our borders.
“Environmental sustainability, ensuring responsible mining practices that protect our land and resources for future generations. This reform package is not the end, but the beginning. It is a foundation upon which we can build a thriving mining sector, a diversified economy, and a brighter future for all Nigerians.
“I urge all stakeholders– government, businesses, communities, and civil society– to join hands and work together to make this vision a reality. Let us leverage the power of partnerships, innovation, and technology to unlock the true potential of our mineral wealth. The time for action is now. Let us seize this opportunity and transform Nigeria’s mining sector into a sustainable growth and development engine!”
In his address, Hon. Jonathan Gbefwi explained that the “key priority areas for the committee include governance, economy/industrialisation, security, geo-scientific data/standardisation, environment, and human capital development.
“These priority areas were identified by researching the sector’s bottlenecks and focusing on using global and domestic data to understand gaps in the sector and legislation.
“As the key priority areas were identified, the common denominator between the various priorities was the need for better governance. Thus, the committee focused on a deep analysis of the legislative framework that regulated the sector.
“We also took a synopsis of the ministry’s 7-point agenda of the interest of regulatory bodies and agencies in drafting legislation that addressed priority areas and was also implementable. The Committee maintained that the Principal Act was developed using global best practices.
“However, our responsibility was to reform it to meet the country’s current realities and to nationalise it. You can see this in the establishment Bill for a Solid Minerals Development Company, which allocates 75% ownership to the private sector and 25% to the public, managed in a trust through MOFI. This breakdown is our recommendation, and we hope that you help us solidify the Bill.
“The primary Bill repeals and re-enacts the principal Nigeria Minerals and Mining Act 2007 by reworking structures based on the priority areas.
“Security is one of the key factors to the stalemate of the solid minerals sector, most of the challenges presented in the sector, or the issues contributing to prolonging the deadlock in the sector.
“Establishing the Mines Inspection and Environmental Agency provides improved oversight of mining activities. This Agency empowers regulatory authorities by supplying cohesive and persistent data on activities in the country. The Agency will have offices in every State to assist with reporting and oversight.
“We further identified that one of the lapses in security is the lack of coordination between the federal and state governments.
“To close the gap between federal and state, the Bill further empowers the Mineral Resources and Environmental Management Committee (MIREMCO) to enable effective and joint oversight of the sector. It is clear that MIREMCO is poorly funded and lacks the resources it needs to support the state. The Bill hopes to use MIREMCO as the facilitating tool for the federal government to work with State Governments to secure their needs and ensure the formalisation of the sector.
“One example of the reforms is the introduction of buying centers in each state; this will enable State Governments to have a clearer picture of the minerals that are being extracted and exported from the state and will enable the Federal Government to regulate economic activity in the sector and improve the trade of solid minerals overall.
“To support this, we have also focused on ensuring that agencies can focus on their individual mandates proficiently. The Solid Mineral Development Fund was established to fund geo-scientific data gathering to aid the mining industry.
“We have ensured Federal and State collaboration by ensuring equal representation in the fund’s board by ensuring board members cut across the six geo-political zones. Most importantly, the Bill empowers the fund by bringing synergy to developing geo-scientific data, capacity building and advancing exploration resources for the industry.
“Lastly, as part of its mandate, SMDF will be utilised to formalise the sector by facilitating the growth of artisanal miners into small-scale mining companies within a two-year period. Community Development and the Environment are equally prioritised in the Bill.
“The Petroleum Industry Act sets aside 3% of their annual operational expenditure to Host Communities. Last week, the President assented and passed the Electric Power Sector Reform Act, which allocates 5% of annual operating expenditures to host communities. In the Bill, we have set out 5% of the revenue of all minerals mined to the host communities, and this is due to the informality of the sector.
“However, it is something we believe that can be reviewed and improved through this programme. We also incorporated more efficient policies to enforce the environmental remediation fund to ensure that Host Communities are not left with deplorable sites and that the environment is adequately protected and restored after mining activities,” Hon. Gbefwi noted.