In search of answers to the perennial question of jobs in the society, our ancestors appear smarter than our leaders! Our current leaders boast endlessly about what my ex-BPE colleague, Sa'ad Jijji, called “Nigeria's jobless growth! - high GDP growth figures without jobs”! Our ancestors and the latter-day colonisers focused on developing our resource endowments - agriculture, mining and industry using indigenous labour and technologies, even if on modest scale and scope.
Mining is therefore one of the oldest economic activities in Nigeria, with evidence of iron-working civilisation around the Nok area in Kaduna State from 340BC. Around 704AD bronze works civilisation around Igbo Ukwu reached its peak. Some 1,000 years ago, the “Golden lands of Wangara” in the Hausa Kingdoms were famous for their gold. Ife and Benin bronze works flourished in the 13th and 17th centuries respectively.
Organised mining in Nigeria started in 1903 and reached its peak after the Second World War with exports of coal, columbite, tin and lead. At a point, Nigeria was the leading producer and exporter of tin.
Indeed, the now troubled city of Jos was born and flourished largely due to the influx of people and resources in search of economic opportunities of the mining boom. Enugu was for a while the capital of the Southern Protectorate because of the coal mining that started around there in 1916.
Today, mining offers Nigeria potentials for job creation, foreign exchange earnings, domestic production and consumption, tax revenue and diversification of our economy from dependence on oil. It can contribute up to 3 per cent of GDP and employ at least a million people, moving most of them to middle-class status.
But that is all it offers - potential. The contribution of the solid minerals sector to the Nigerian economy has collapsed from about one per cent at independence to about 0.3 per cent of GDP in 2010, and it employs only a few thousand people.
The industry is grossly under-developed leading to a situation where we import minerals that we could produce domestically such as Barites, salt and iron ore.
Compare this with South Africa where in 2009, mining directly accounted for about 9 per cent of GDP, one-third of the total capitalisation of the Johannesburg Stock Exchange (JSE) and employed 500,000 people, or with the US where mining provides about 670,000 direct jobs.
In Australia, about 320,000 direct jobs are attributable to the mining sector. In Canada, mining provides employment for about 200,000 people. In South Africa, mining contributes another half a million indirect jobs in addition to direct jobs, focused on only a handful of minerals! Nigeria has huge reserves of 34 solid minerals and virtually no jobs!
Globally the mining industry has enjoyed strong economic growth for the past decade. Demand for solid mineral resources from rapidly growing nations like China and India is on the rise, while Canada supplied minerals with a total estimated value of $45.3 billion in 2008.
Today, mining accounts for 3.5 per cent of Canada's GDP. Nigeria is losing huge amounts of foreign exchange that it could have earned considering the tremendous growth in the demand for minerals in the global market.
Nigeria has proven reserves of 34 solid minerals in commercial quantities. Unlike the oil enclaves we have identified so far, these minerals are widely spread across 450 locations in most of the 36 states of the federation and FCT. No state or region will be left behind when we exploit our mining potentials.
So if solid minerals are God's gift to our nation, and we have the people to put to work on them, why have we not done so? What are the lessons to learn from the past successes and failures? What can we learn from countries like Mali, Tanzania, Ghana and South Africa that have become attractive destinations for mining investments? What more can we do as a nation to unlock the potentials in solid minerals? We will look at a few minerals to attempt answers.
Nigeria's coal was highly valued for its low levels of sulphur and impurities. There are 22 coalfields spread across 13 states with proven reserve of 639 million tonnes, and inferred reserves of 2,750 million tonnes.
Up till the late 1960s, coal was the source of the entire energy requirement for the country’s industrial sector, which included Nigeria Railways, National Electric Power Authority and Nigeria Cement Corporation (NCC), Nkalagu.
According to the Ministry of Mines, Coal export or usage for electricity generation is capable of earning or saving Nigeria up to $6 billion per annum. Applying our coal to generate electricity would yield 7,000mw which can be the national base load, supplemented by other sources for the next 30 years.
The NCC was a state-owned monopoly established in 1950 to engage in the exploration, production and marketing of our coal. It was successful until the outbreak of the Nigerian civil war. It never recovered from the years of mine closure and was privatised via liquidation by the BPE in 2007. None of the resulting investors has started production since then.
Due to uncertainty about commodities, currencies and stocks as stores of value in the global market, the price of gold has multiplied manifold in the last five years and remains at its highest level.
Gold is another mineral we have in commercial quantities in Osun, Oyo, Kwara, Zamfara, Kebbi and Kaduna States. Between 1933 and 1943 when production peaked, Nigeria exported some 3.2 million ounces of gold! With the privatisation via liquidation of the Nigerian Mining Corporation (NMC) in 2007, it is gratifying that some domestic and multinational companies that acquired some of its mining leases are pursuing gold mining opportunities, supplementing the efforts of our indigenous small scale, artisanal miners.
Tantalite is a rare metal needed by high technology and aerospace industries. Nigeria has the second largest reserves of tantalite in the world, occurring as Tantalum-Niobium, and available in a belt stretching from Nassarawa State and FCT across to Ilesa in Osun State.
We have huge deposits of Lead and Zinc in Benue, Kogi, Ebonyi and Nassarawa States among others. Large deposits of iron ore, reputed to be the largest in Africa have been found in Zamfara State as well.
We have bitumen and tar sands equivalent to 13 billion barrels of oil in a belt stretching from Lagos and Edo to Ogun and Ondo States. Each of these minerals is worth billions of dollars in revenue annually and hundreds of thousands of jobs.
For instance, we are also endowed with large deposits of Limestone, Kaolin and Gypsum that can be processed to meet the cement requirement of the African continent for the next two decades. There are large deposits of talc spread across the country that have the potential to earn about $3 billion annually.
A few lessons can be deduced from mining in Nigeria and other countries.
The first, from the experiences of our past, and the successes of other countries is that government-owned and managed organisations do not do a good job of mining solid minerals on a sustainable basis. My sister, Oby Ezekwesili, did a great job of redirecting the ministry’s role to that of a facilitator, regulator and administrator rather than owner-operator and created a Mining Cadastre Office.
Under Ezekwesili’s watch, the Minerals and Mining Act was drafted and steered through the cabinet and National Assembly. That is the way to go. The enabling law and fiscal regime are excellent, on paper. The challenge is to translate policy, legislation, regulation and intentions into the right attitude and practice in the ministry.
Secondly, the Federal Government must not only license private sector participants but also provide more accurate geological information about our mineral resources.
The effort of the ministry through its Geological Survey Agency to invest more in this area is another commendable step that was accelerated when Ezekwesili ran the ministry. Private companies must be regulated and made to comply with the best environmental standards.
The mistakes of the oil industry must not be allowed to recur in the solid minerals sector. The recent death of over 100 people in Zamfara from lead poisoning arising from unregulated artisanal mining is unfortunate and must be prevented in future.
Thirdly, the strengthening of the Mining Cadastre Office and its freedom from ministerial and political interference will give confidence to investors on the security of their licences and the policy environment.
The focus of the minister and his staff must be on easing the acquisition of titles to land for mining licensees - this continues to be a problem in spite of everyone's best efforts.
Fourthly, the recognition that small scale, artisanal (and often unlicensed, illegal) miners still account for about 90 per cent of the output of the Nigerian solid minerals sector.
This informal, largely unregulated part of the industry needs extensive support, organisation and regulation, not just cash hand-outs from the ministry. We must deliberately empower our indigenous artisanal miners and incorporate them into the value chain of mineral production, beneficiation and marketing.
Finally, mining like other parts of the real sector is not attracting enough financing, mainly due to policy instability and uncertainties. The 2007 Mining Act anticipated this and created the Solid Minerals Development Fund to be managed by a public-private board.
The World Bank has granted a credit of $120 million for the sustainable development of our mining sector, but the Fund is yet to be operational. And since mining is technically complex, risky and long-term in lifecycle, commercial banks are reluctant to jump into financing the sector. The government should establish the Fund immediately as required by law, and not wait for CBN to intervene yet again.
The solid mineral sector offers viable prospects for mining, mineral processing and the manufacture of a host of intermediate raw materials for local industries as well as for foreign exchange earnings. It presents the opportunity for diversifying Nigeria's hitherto petroleum-dominated economy.
Improving the Nigerian mining industry would help curb the growing level of unemployment, move rural miners into middle class and reduce poverty.
At the risk of sounding like a broken record, no sector can grow and realise its potential without the basic building blocks of good government - internal security, a predictable legal system, supportive bureaucracy, affordable credit, transport and communications infrastructure and electricity.
Unlocking the avalanche of potentials in the mining sector is an appropriate measure for actualising the transformation of the economy if the government is serious about attaining such a feat. It is possible. It is achievable.