The Ministry of Mines and Steel Development and industry experts have deliberated on a comprehensive agenda to cushion the post COVID-19 era shocks in the Nigerian mining industry and strengthen its activities to contribute meaningfully to the nation’s economic diversification programme.
In a virtual Mid-Term Review (MTR) meeting on the World Bank assisted Mineral Sector Support for Economic Diversification Project, (MinDiver), policymakers, industry experts, and economists used the opportunity of the forum to look at the role of the mining sector in minimizing the impact of COVID-19 on the Nigerian economy.
The overall objective of the MTR was to review the progress of the MinDiver project. Minister of Mines and Steel Development, Arc. Olamilekan Adegbite, while declaring the MTR open said the review had come at an auspicious time as the nation’s economic activities were facing the grave challenges of the COVID-19 pandemic and would require new strategies to cope with its impact.
He called on the World Bank to remain steadfast and offer the ministry the optimum support to develop the mining industry to meet the government’s post COVID-19 economic recovery objectives. His words: “I wish to first thank the World Bank team for the concerted efforts made to organise a virtual MidTerm Review (MTR) meeting for the MinDiver project as against the usual physical meeting and interaction.
Understandably, this mode of the meeting has become imperative because of the deadly impact of the COVID-19 pandemic and the need for us to move ahead with the implementation of the programs of the project. Our expectation during the MTR is for the World Bank to work with the ministry to develop achievable strategies to overcome the factors that have impede Mindiver’s performance. MinDiver is still financially and economically viable, particularly in the light of the economic and fiscal challenges that await Nigeria in the post COVID period, bearing in mind the crash in oil revenue. We urge the World Bank to remain steadfast and offer us the best support to develop the mining industry to meet the government’s post COVID-19 economic recovery objectives.”
Speaking further, he said: “As we are undertaking the MTR under challenging circumstances. The COVID-19 pandemic and containment policies are having devastating effects across the globe, and Nigeria is not the most catastrophic crises that the world has experienced in recent history. It is definitely far higher than the great depression and the Global Financial Crisis. In this regard, the World Bank intervention project in the Nigerian mining sector remains even more relevant for our national recovery program.”
The minister said the ministry was committed to the implementation of the MinDiver Project. He explained: “The Ministry remains very committed to the implementation of the MinDiver project. Our enthusiasm and support for this project from design to the current stage of implementation have not wavered. Moreover, the project remains highly relevant in light of the economic diversification vision of the Federal Government. Indeed, the execution of many aspects of this project has helped to strengthen the implementation of the mining sector roadmap.”
Arc. Adegbite further noted: “The MTR provides an opportunity for us to critically assess the performance of the project and carefully plan new strategies to ensure the improved execution of its program. This, no doubt will entail identifying all factors that have impeded the successful implementation of our planned programs and make plans to overcome them. In certain areas, the MinDiver project has recorded remarkable results. A clear example is the ASM Remote Sensing Monitoring System, which is now operational.
Other activities that are almost completed include the automation of the Mining Cadastre Office (MCO) system and the decentralisation of the MCO administrative system into six zonal offices. Also, others include the strengthening of the activities of the Nigerian Geological Survey Agency (NGSA).” The minister emphasised that for other critical programmes that had experienced low pace o f implementation, serious evaluation to accelerate the speed of execution would be required.
He said Nigeria had already experienced a sharp fall in oil revenue that triggered cuts in government budgets, loss of jobs, and an expected increase in poverty levels across the country and these underscore the importance of the Mid-Term Review and the importance of the assignment ahead of the sector. The minister further said: “It is imperative, therefore, for the World Bank and our team to focus on restructuring the project and strengthening its fund portfolio for the great task ahead. The concepts and implementation strategies in the new era should be reviewed and aligned with the government’s post COVID-19 challenges.”
Arc Adegbite said the World Bank’s intervention program in the mining sector in the post COVID-19 era should also investigate critical areas like facilitating the emergence of mineral processing industries using the cluster approach to fast-track the development of several mineral commodity value chains. According to him, the ultimate objective of this is to increase industrial and manufacturing activities, employment, and skills development through the establishment of mining value addition and metallurgical processing facilities across the country.
He said each cluster should be fitted with modern equipment and technologies and should have a network of miners, processors, skills development providers, logistics providers etc. “With these, we are looking at industrial minerals for job creation and import substitution, for example, carbonate for lime production in water treatment, gemstone/jewellery making etc.”
He said another area that required special attention was the establishment of a formal gold scheme to minimise the high rate of illegal gold mining and smuggling, increasing government’s revenue from the resource, creating jobs, and improving environmental and social stewardship. According to the minister, “we need to organise and support the sector particularly the ASM as it is increasingly recognised as a significant contributor to sustainable rural economic development through a combination of institutional, reforms, and investments in physical structures as well as modern technologies.”
He also noted that given the realities on the ground, the ministry would require appropriate COVID-19 recovery and support measures targeted at every level of operation to keep the mining industry intact and help it to recover in a way that would help support mining entities to sustain production, continue exploration, and extend into new projects as well as to save as many jobs as possible, relieve financial pressure on entities in the industry, keep the risk of contagion out of the mines and entities in the industry, and increase operational capacity.
“We envisage that some of these measures will be undertaken within the ministry. Others might require our direct engagement with other government ministries, departments, and agencies (MDAs) for appropriate monetary, fiscal, financial, and structural measures fit for the mining industry. We need to strengthen industry governance for government’s objective to diversify the revenue base through mining. Optimising revenue collection and management will need to be underpinned by improvements in our governance syst ems and capabilities.”
The minister noted that a strong governance mechanism would involve improving the institutional linkages between the MMSD and its agencies while recovery measures were being implemented.
and information flow among departments and agencies envisaged under the MinDiver project, which should be revived and quickly implemented. He said since mining was hinged on the availability of geoscience data, the ministry had successfully created awareness and interests through numerous road-shows, especially at major international mining events such as Indaba, PDAC, Africa Down-Under and London Mines and Money.
He explained that new geoscience data were being acquired through ongoing projects such as NIMEP, but added that there was still need to do more explorations on already selected minerals and the minerals of the future such as coltan, cobalt, lithium and other rare earth minerals.
The minister also revealed that the facilitation of the development of economic corridors was another critical area that requires attention as insufficient infrastructure had been identified as one of the range of challenges being faced across the nation’s mining value chain that is affecting the proper functioning of the minerals and mining ecosystem.
He said to address this challenge, the government had adopted a spatial development approach by linking groups of minerals identified along economic corridors to improve and develop infrastructure that will facilitate mining activities.
He said the development of economic corridors in the country would have huge ripple effects on the sector and the economy in general.
These effects would include strengthening the mining sector economic linkages; encouraging value addition processes (beneficiation); promoting trade and investment – led growth and enhancement of competitiveness and diversification of the economy.
Arc. Adegbite said, in moving forward, there was a need to apply the lessons learned from the pandemic since mining shares the same cyclical price tendency with oil. “Nigeria must also not become too dependent upon mining for future export income and government revenues like it has with oil revenues. Rather, mining should be leveraged to support Nigeria’s industrialisation and diversification into other viable sectors.
This is an area that is familiar to the World Bank.” Director-General, Mining Cadastre Office (MCO), Engr. Simon Nkom said the administration of mining titles has gone digital with the upgrade to eMC+ system. He said the system had placed MCO ahead of COVID-19 restrictions on movement as all the processes for title administration could be carried out online from any pa rt of the world.
He explained: “We were working in MCO as if we had a premonition that COVID-19 will hit the world. The MCO with the support of the World Bank assisted MinDiver project had gone ahead to prepare and make title administration completely digital. We were thinking ahead. It was as if we saw the future. Digitalisation and upgrade meant that from any part of the world a person can apply for mining titles. We appreciate the support of the World Bank through MinDiver. Over 31,000 manual files were scanned and integrated into the system. These were all done to guarantee that our mining title administration is secure, transparent and can be processed from any part of the world in real-time”.
Engr. Nkom noted that the entire plan was to guarantee a sustainable system that would ensure investors’ confidence.
Director-General, Nigerian Geological Survey Agency (NGSA) Dr Abdulrazaq Garba, called for more seamless synergy between agencies within the Ministry of Mines and Steel Development to ensure that programmes that have to do with the development of the sector were fully achieved.
He noted that for the NGSA and the sector, what would happen after the first phase of the NIMEP programme should be the focus. “The first phase of the NIMEP programme is coming to an end, and there is a need to get an advisor that can chart a way forward.”
Director-General, National Steel Raw Materials Agency, (NSRMEA), Engr. Umar Hassan, said there was a need to consider hyper spectrum remote sensing mechanism to help identify large minerals. He said the way to go after COVID-19 was to focus on strategic minerals. He said the sector must know what both local and international investors needed.
Director, Artisanal and Small Scale Mining (ASM), Mr Patrick Ojeka, in his contribution, said ASM activities were purely poverty alleviation oriented and the major challenge was funding the formalisation process. According to him, that was one of the areas the World Bank could support the government through the MinDiver Project to enable the process of formalisation to become a quick reality.
Acting-Director Mines Inspectorate Department, Engr. Frank Odoom, said the department was already planning to introduce a technology that would help in synergising with other relevant agencies. He said other plans include tracking of minerals to ensure payment of proper royalties. He explained that through the pathways, the department would be able to identify mineral footprints. According to him, the department was also working on how they could train customs officers on royalties and permits.
Professor Bolaji Hassan of Nigerian Institute of Mining and Geosciences, Jos, said in the post COVID-19 period, the government should accelerate the on-going efforts to revive the iron and steel sector
Professor Hassan commended the steps being taken for the resuscitation of the Ajaokuta Steel Company by the Federal Government and recommended that the National Iron Ore Mining Company, Itakpe, should also be strengthened to supply the raw materials needed for steel production.
He also said barite would continue to be useful in the drilling of crude oil and should be categorised as an essential mineral for development to stop the importation of the product by oil companies in Nigeria
Habeeb Jaiyeola of PriceWaterhouseCooper (PwC), in his presentation stated that with the Nigerian economy facing the reality of entering into recession due to the lockdown, the nation must begin to prepare for the post COVID-19 era. He said as a monoeconomy dependent on oil, Nigeria must begin to see the mining sector as essential. According to him, Nigeria should leverage on current challenges, seek solutions and revamp the mining industry through targeted activities.
Mr. Jaiyeola reasoned that the ministry needed to strategise effectively to block areas of revenue leakages, especially in the areas of the payment of taxes, royalties and export duties. He said mining companies had to pay the right royalties and taxes and ensure they go directly into government coffers, provide accurate royalty data, collaborate with key ministries and relevant agencies to ensure that the government is not shortchanged.
He also called for accurate financial reporting that would align with the mining council standards and a critical review of issues related to multiple levies which discouraged miners from paying correct taxes to the government treasury
Others, he said, include strengthening artisanal mining activities, and focus on downstream operations.
Other industry experts also spoke on the need to look at future minerals like battery minerals, gemstones, phosphate, and limestone as minerals the country could focus on to aid quick economic recovery.