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Nigeria leading mining sector resurgence in Africa

Dr. Oladele Alake, Honourable Minister for Solid Minerals Development (3rd from left) and Other Stakeholders, in Cape Town, South Africa Recently

*Dr. Oladele Alake, Minister for Solid Minerals Development, informs the audience at a recent global forum, in Cape Town, how Nigeria has taken the lead with the establishment of the Solid Minerals Development Fund to build capacity of local investors to engage in minerals exploitation

Segun Tomori

The 30th Edition of “Investing in Mining Indaba” recently held in Cape Town, South Africa, provided another opportunity for African countries through their Ministers of Solid Minerals/Mineral Resources to consolidate the pact to forge a common front in projecting the continent’s interest in the global mining industry.

Nigeria and Uganda had led over a dozen other African countries into a coalition, early January 2024, on the sidelines of the Future Minerals Forum in Riyadh, Saudi Arabia, to make a case for local value addition and maximum beneficiation from its vast mineral resources for citizens and member countries.

The coalition gave rise to the African Minerals Strategy Group (AMSG) and Nigeria’s Minister of Solid Minerals Development, Dr. Oladele Alake, was unanimously elected as the pioneer Chairman on the sidelines of the mining conference in South Africa.

Moving swiftly to rally his colleagues for concerted action, Alake declared that the era of carting away solid minerals without commensurate value addition to develop Africa’s economy is over.

The Minister stated: “We must speak with one voice on value addition as a prerequisite for investment in the mining sector.

“Let those who want our minerals know that if you go to country A, you have the same regulations and laws guiding the sector.”

He equally said: “You go to country B; you find the same. So, there is no divide and rule anymore. That is when we can show sincerity of purpose, and the world will begin to take Africa seriously.

“On behalf of our president, I pledge our full support to achieve our objectives.”

Doubling down on the resolve of the African continent while speaking as a panelist on the theme, “Positioning Africa to Succeed in Diversifying  Global Value Chains”, Dr. Alake emphasised the necessity of creating the value chain from exploration, mining, processing, inventory management, transportation to delivery to the end-consumer.

“All these processes require infrastructure, and in my engagement with private sector players over time, I have discovered that a lot of them prefer to engage in investments in mining sites close to ports.

“That means there is a need for transportation – roads and rails.

“I’m thinking that the best approach is to collaborate with consumer nations who need these raw materials on the provision of infrastructure without jeopardising local value addition.”

Highlighting why Nigeria should be the destination of choice for prospective investors in the Lithium value chain, he stressed that the country is experiencing a “Lithium boom”, citing the preponderance of the critical metal in several localities, which he noted are literarily on the surface of the earth, in most locations.

“This will culminate in lower production costs for extraction compared to other countries,” said the Minister.

On the need for Public-Private Partnerships (PPPs) in cahoots with multilateral financial institutions to unlock the requisite funding for mining sector development, Alake also informed his audience that Nigeria has taken the lead with the establishment of the Solid Minerals Development Fund (SMDF) to build the capacity of local investors to engage in minerals exploitation.

“The SMDF is also in partnership with the African Finance Corporation (AFC).

“This body has been responsible for encouraging local investment in the mining sector, and appreciable results are coming in.

“They are also through the AFC involved in the Lobito corridor involving Angola, Zambia, and DRC.

“We are encouraging the same corridor to be put in West Africa, starting with Nigeria because we have these mineral resources in abundance,” he said.

Speaking further on financing, Alake charged African countries to take a cue from Nigeria by taking a critical look at the SMDF model.

“While we look forward to the foreign financial institutions, I will recommend to other African countries to also look inwards.

“The SMDF in Nigeria is sourcing its funds from other economic engagements. I will recommend this policy initiative to other African countries.”

President Bola Tinubu’s reforms in mining sector gathering momentum

Back home in Nigeria, reforms of President Bola Tinubu on the mining sector are gathering momentum.

Just recently, an Inter-ministerial Committee tasked with developing a blueprint for securing natural resources established by the President and chaired by Dr. Alake has since swung into action.

The administration envisages the setting up of a specialised security outfit made up of well trained operatives, equipped with requisite technology and ammunition that will secure natural resources, comprising solid minerals, forest flora and fauna, and  the marine economy.

The last meeting involved heads of security agencies, and they were given time line to come up with a robust action plan that will assist the committee in turning in its report.

In line with the Minister’s 7-point agenda, plans are ongoing to bequeath an efficient governance structure for the mining sector with the establishment of a Special Purpose Vehicle (SPV), tentatively called “Nigerian Mining Corporation”.

The corporation is conceptualised to be private sector driven, with cumulative equity for the private sector pegged at 50%, the government 25% and the Nigerian public 25% respectively.

Learning from past experiences, this model is designed to minimise government interference and guarantee the corporation’s efficiency and stability, even beyond any administration.

Already, the National Assembly through the House of Representatives has begun the process of amending the 2007 Nigerian Minerals and Mining Act in collaboration with the Ministry of Solid Minerals Development.

When the amendment is concluded, the proposed mining corporation and other reforms will be backed by relevant statutes.

Last week, the House of Representatives Committee on Solid Minerals organised a public hearing on the bill for amendment of the mining act and took submissions from top officials, agencies of the ministry, mining industry stakeholders, among others.

During a recent interview with Channels TV, Dr. Alake hinted at an impending revocation of more mining licences.

It is recalled that late last year, 1,633 mining licenses were revoked due to default in payment of annual service fees, and he had vowed to wield the big stick on other categories of defaulters. This is necessary as part of efforts to free up the space for genuine investors and those who are ready to abide by regulations.

In all of these, what is not in doubt is that Nigeria is playing a pivotal role in Africa’s mining sector renaissance.

Summing up the new direction as chair of the AMSG during Cape Town’s Mining Indaba, Alake affirmed, “We are sanitising the mining environment, creating the enabling environment to attract investments whether local or foreign.

“This time around, emphasis will be on local value addition. So that henceforth, Africa can gain maximally from its abundant natural resources.”

*Segun Tomori is Special Assistant to the Honourable Minister of Solid Minerals Development on Media.

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