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Repositioning The Mines, Steel Sector For Economic Development



Giving his valedictory speech in the conference room of the Ministry of Mines and Steel Development (MMSD) complex in Abuja recently, the outgoing minister, Dr Kayode Fayemi, stated how the ministry under his watch for three years has been repositioned to realise its potentials and contribute to economic growth in line with the economic diversification agenda of government. ABAH ADAH reports.

The mining sector was a key player in the Nigerian economy until the oil boom era which spanned the 1960s and 1970s following which other sectors were neglected for the new found oil sector believed to be the money spinner.
In the most recent times, the mining of minerals in Nigeria has accounted for as low as 0.3 per cent of its GDP, due to the influence of its vast oil resources. The domestic mining industry is underdeveloped, leading to Nigeria having to import minerals that it could produce domestically, such as salt or iron ore.
Organised mining began in 1903 when the Mineral Survey of the Northern Protectorates was created by the British colonial government.
A year later, the Mineral Survey of the Southern Protectorates was founded. By the 1940s, Nigeria was a major producer of tin, columbite, and coal then until the discovery of oil in 1956 which hurt the mineral extraction industries, as government and industries began to focus on this new commodity, even as scientific projections are that the existence of the new product is time bound, and may become exhausted sometime in the near future.

Perhaps, being conscious of the dire consequences of the trend for Nigeria’s future in the light of the projections and the stagnation which the economy has witnessed over the years, the administration of President Muhammadu Buhari , came on board in 2015 with the mantra of change and economic diversification, placing premium on the development of other critical sectors that were for so long neglected, including that of solid minerals.

While delivering his valedictory speech, Fayemi stated that under his watch for the last three years, the solid mineral sector has made a far-reaching progress in terms of development and contribution to the overall economic growth, adding that the sector was down with a whole lot of challenges of which a good number have now been resolved.
Fayemi, who used the occasion to formally announce his resignation as minister to pursue his political ambition enumerated some of the problems that bedeviled and crippled the sector.
According to him, the critical challenges included insufficient fund, limited infrastructure, illegal mining, protracted litigation over legacy assets among others.
He said in 2015, when he assumed office, the total expenditure of the ministry was N1billion, out of which only N352 million was accessed.
“Having diagnosed what the challenges were when we came in, the first thing we did was to develop a roadmap for the growth and development of the Nigerian mining sector.
“The document was produced through a robust process of consultation and stakeholder engagement and was approved by the Federal Executive Council (FEC) on August 31st 2016. That is what has been our guide in the course of all of all the works we have done in the last three years,” Fayemi noted.
According to Fayemi, who commended the effort of Mr President, funding has improved for the sector significantly.
“For the first time, the ministry sought for and had N30 billion approved fund from the federal government to be used in providing soft loans and grants to industry players such as the small -scale miners and artisans, and to invest directly in the sector.
“And for the first time since 2004, we got the Federal Executive Council (FEC)’s approval in October, 2016 by which access to the mining sector component of the Natural Resources Development Fund is now secured.

“Along the line, we also received financial support to the tune of $150 million for a period of five years from the World Bank for the funding of the solid mineral sector in line with the economic diversification agenda of the government.
“The fund will also help to bring back on stream previously abandoned mine projects such as the tin, coal mines, iron ore, etc.
“We have also reached an advanced stage in assembling $600 million intervention fund for the mining sector through collaboration with some finance agencies,” he said.
He also noted that progress has been made in resolving the legacy issue that has continued to generate dust in the sector as arrangement for the return of the Ajaokuta Steel Complex to the federal government as the owner has been made.
The former minister also revealed that in line with efforts being made to improve infrastructure towards having a boom in mining activities in the country, there was a strong collaboration with relevant MDAs to succeed, hinting that the Warri-Itakpe-Ajaokuta standard rail gauge, which according to him, has been completed, and would become operational around July, 2018.
Fayemi noted that the issue of weak institutional capacity was being tackled head-on through training and retraining of staffs both within and outside the country.
At a training organised for stakeholders in the sector by the metallurgical inspectorate and raw materials development of the ministry in Abuja, the former minister identified capacity gap as one of the major factors militating against the development of the mineral raw materials products in Nigeria’s mines and steel sector.

He affirmed that the administration of solid mineral titles in the country has been overhauled, adding that states and private entities were being encouraged to invest in the sector through various incentives, while six zonal centres of the Mining Cadastre Office (MCO) have been created for effective administration.
He said in line with that , the ministry had pushed for inclusion of solid minerals in the derivation formula, and as such states who have such minerals can now enjoy the benefit as an incentive, adding that mineral resources and environmental committees have been set up in the states, even as many operational vehicles had been procured to boost security, surveillance and mineral exploration in the country in addition to the several MoUs signed with mining countries and firms around the world including South Africa in that regard.
He further stated that strengthening the surveillance mechanism was also part of the efforts geared towards ensuring that the illicit business of illegal miners was brought to a halt in the interest of best practices and economic development, adding that in recent times some of such criminals had been arrested and prosecuted, while others were still facing prosecution, warning that more would be apprehended in future if the foundation already laid was sustained.