Nigeria is a land of opportunity; a large population, hidden treasures and access to the ocean (This makes it easier for her to benefit from international trades with countries in every corner of the world). Nigeria is also blessed with abundant mineral resources which are mostly available in commercial quantities. There are proven reserves of iron ore, gold, zinc, limestone, barite, tin and bitumen across the country. Among other reserves, reports show that Nigeria has deposits that are over 42billion tonnes of bitumen, 3billion tonnes of iron ore, 3billion tonnes of coal, 1billion tonnes of gypsum, 40million tonnes of talc,10million tonnes of lead and zinc, and 1.5million tonnes of rock salt. Of these reserves, it is estimated that less than 5% are currently being mined, refined and marketed.
Currently, the Nigerian mining sector contributes 0.33% to the country’s GDP. Considering the large volume of mineral deposits we have, this is way below our true potential as a nation. The Nigerian mining sector is still characterised by crude mining techniques. This partly explains why we still import materials like iron and salt. The government’s continued interest in income diversification has forced her to make investments in the mineral sector more attractive. They’ve been series of amendments to the Mining Act and geological data have also been made more available for public consumption.
With these developments, Nigeria holds a promise of a significant increase in investment from small and large multinationals and an increase in local and international market demand which will significantly boost the mining sector’s contribution to a broader economy in the coming years.
ECONOMIC BENEFITS OF MINING
The economic significance of the mining industry has been underestimated, but research has shown that the mining industry plays an important role in boosting the economy and growth of a country. Providing livelihood to local communities: With the exploration of the mining industry and the influx of investors, there will be an increase in job opportunities for the immediate community as well as the general public. Generating income for the government and contributing to its GDP growth: The exportation of mined minerals will bring about a significant increase in revenue generation for the government. This will boost the GDP of the country and increase the affordability of minerals for local consumption. Promoting more efficient use of energy and creating environmental awareness. Better lives for the citizens: The government can utilise the revenue generated to provide more infrastructural facilities for the people. Increased grassroots development. Reduction in the cost of living. The increased fusion of technology into society Massive employment and a significant reduction in the crime rate. Increased infrastructural facilities
Challenges surrounding the mining industry in Nigeria include: Limited geoscience data and information: Most of the available geological data in Nigeria are not up to date. This affects the credibility of the information and it has also affected the realisation of mining projects. Infrastructure development: the infrastructural imbalance within Nigeria is a major challenge to the development of the sector, particularly inadequate electricity supply and access roads to sites of mineral deposits. Security: Many ethnic, communal and religious conflicts occur intermittently in the country and these affect mining in some communities. Project funding: Due to the long period of dormancy and the slow implementation of the Federal Government’s reform agenda in the sector, multinational corporations have been reluctant to fund major mining projects in the country. Lack of robust fiscal framework: The existing fiscal framework in the mining sector is not investor-friendly and does not consider the strange nature of the sector, particularly, its long development period.
We expect that in the next five to ten years, the Nigerian mining sector would further develop with the entrants of new companies, a catapult in revenue growth rate in the industry, a decrease in illegal mining activities and increased participation of the host communities in promoting a harmonious relationship with the mining companies. A lot of steps have been taken to reform the sector for more investment especially as a lot is expected to be earned from solid minerals. With high expectations and willingness amongst key stakeholders to collaborate in gearing this growth, there is no better time to invest in the mining paradise of Nigeria than now.
Credit: Businessnews report