Minister of Solid Minerals Development, Mr. Dele Alake, in this interview, speaks on the prospects of mining industry in the country, value addition by prospective investors, security and plans to make the sector data-driven. ‘LAOLU AFOLABI brings excerpts:
RECENTLY, you commissioned a lithium factory in Nasarawa State. Is Nigeria now keying into lithium exploration?
It’s actually a very good development. We want the solid minerals to become the economic hub of Nigeria and to contribute meaningfully. We know what the oil is saying now in global affairs. So, for our own economic survival, we believe that the solid minerals is the next viable or most viable alternative for Nigeria to harness the resources there and ensure that we are more dependent on this God-given resource rather than oil that is dwindling. I do not know how much Ganfeng Lithium Industry Limited is investing in the Nasarawa project right now, but I know that the factory intends to consume about 16,000 tonnes of lithium a day in producing batteries. Everything is sourced locally. And even in Nasarawa, you don’t need to dig deep before you begin to extract – you can see it on the surface of the earth, you see some very shiny fence, which makes the capital outlay a lot less.
I did say at the ceremony that we will no longer license operators who do not have a value addition plan. Up till now, we’ve not had the capacity to even determine the type of minerals that they’re taking away outside of what they declare that they’re taking. For instance, some will say they’re taking lithium away, whereas we’ve discovered that even there are other associated minerals embedded in lithium, like nickel, for instance. And when they go through the ports, they just write this is lithium and our customs do not have that capacity and the technical know-how to be able to determine.
How do you plan to empower your officials to have that capacity?
One of the takeaways from our Australian trip was the signing of the training deal with the mining minister of Australia to come and train our own personnel. And we’re at an advantage of actualising that. Now, I still got across to the Australian authorities just last week to concretise the efforts that we’re putting in place. And they’ve been so kind to respond positively to us. So when they come and train our personnel, not only in the act of exploration, exploitation and the very deep technicalities involved in the industry, they’re also going to teach our people how to scientifically determine the type of solid minerals that they’re taking out. And we intend to post these trained officials to the customs department so that they can help the customs people in determining these and reducing the undeclared revenue that these people are taking out. And, of course, when we plug such loopholes and leakages, it necessarily will begin to show up in the accrual revenue to government.
How about security issues in mining areas?
We are also putting in place security measures because, in my travels to Australia, the United States and all the meetings with foreign investors, the issue of security has been very paramount. And nobody can blame them because nobody wants to put his money in a chaotic environment. You need stability to operate optimally and maximally. So we are rejigging the security architecture in that sector. I’ve been in touch with the national security adviser, even two days ago, I had a meeting right in the president’s office with the president in attendance, to ensure that we recalibrate the security efforts that we are putting in place and we are also adding technology into it, so it wouldn’t just be deploying of personnel alone without technology.
Nigeria has a very vast land area. So we need real survey drones, artificial intelligence and all of that and we are putting in place all of the measures to ensure that we secure the operating environment to make sure the investors, both local and foreign, have unfettered atmosphere to operate for the benefit of the host communities, the state and the federal governments, Nigerians in general. The other thing is even the environment in which they operate. We discovered a lot of these operators just dig the mine and dive the ecology of the environment. So we have an agency that is now monitoring all of these things. And then we have told the operators and even the potential licenses that they must also have plans either to reclaim where they have mined or to put in place remediating measures to ensure that after their mining operations, the environment will not become useless to the host communities and the states at large.
Another thing is to also ensure the investors have data, the required data for them to make informed decisions on where to invest, how to invest and the kind of quantity of the materials that they have or they want to invest on. And so we are investing heavily in big data generation. This data, of course, is very technical. So that’s why we need the expertise from within and without. And when we generate such big data, we have to get this data certified by the international agencies, so they will boost the confidence of the investors, because if you generate your data locally, and it’s not certified by these international agencies, foreign investors don’t have the confidence that your data is efficient. So we’re going to put up all of this on our website and get the foreign stock exchanges involved, to expose it to the foreign investors. From there, they start showing interest. Of course, now we are getting the interest, a lot of interest. Even after I arrived in Abuja, I had two calls from potential foreign investors saying that they have seen what we are doing and that they are becoming more interested in the Nigerian solid minerals sector and they need information. I directed them to the relevant departments and agencies that will help them in making informed decisions.
What’s the fate of local contractors/investors?
In all of these efforts, we are making sure that even local operators are also not left out because we need them. We need the medium level; we need the big players in the industry. So the local operators, we are putting them into kind of cooperatives. The people were called illegal miners. You recall that in my maiden press conference, I did give a 30-day ultimatum to them to form themselves into cooperatives so that they can become formalised and then be properly structured. Just about a few days ago, I had to extend that timeline because we found out that they are responding and it’s not possible for them to all respond within that 30-day timeframe. So I have had to extend by another 30 days to encourage them to come into the fold and formalise themselves into cooperatives. So they will be able to also become bankable investors in the process. They need a lot of money, equipment and all the technical necessities. So, when they group themselves together, their financial variability becomes better and the financial institutions can deal with them rather than with individuals.
How do you intend to intervene in issues of state governors making pronouncements on mining?
I’m engaging with the governors with the view to harmonising policies and getting them involved because we don’t want any kind of confrontation. However, I did say that the constitution is also very clear, putting solid mines in the exclusive legislative list. So no state has any right to make pronouncements on the operation of mining. Now, where there are infractions by licensed operators in their various states, they can take recourse to the Federal Government to do a report. And we also have our own officials on ground in every state. We have the officials of the ministry monitoring the operators, those that are licensed, even the unlicensed ones that we call illegal miners. As I said, they’re now forming cooperatives. At the end of the day, the essence is to sanitise the sector with a view to maximally utilising the resources that we have to be beneficial to the hood, community, states, and the nation at large.
Are there minerals you prioritise in this process?
We’ve listed all the minerals available in Nigeria. There’s a long list of them, but the prominent ones that are attractive to the vessel, both local and foreign, include gold, lithium, peroxide, cowling, iron ore that is necessary in steel. We have the pegmatite, platinum and associated rare earth minerals that are needed in turbine for power generation, even for onshore and offshore generation of power; we have all of those minerals, not to talk of the gemstones, the limestone and quite a lot more. There is no state in this country that does not have mineral deposits. We have quite a number of them and we are making these available to the investors, but it now depends on the choice of the investors.
We’ve had a preponderance of these investors going for the gold, the lithium and those ones that are needed in the various factories for cement and stuff like that. Now, we are aware that a lot of people are carting away lithium in trucks at night and using all kinds of unscrupulous methods to get these things to China. It’s not just in China, maybe there’s more of them getting into China and because we’ve seen a lot of the Chinese people operating in very remote areas and all that, but don’t forget that they don’t come here and operate in isolation. There’s always connivance with our local people, some even as high up as traditional rulers. About a week or two ago, I did sound a note of warning to foreigners who are engaged in sponsoring banditry. We’ve discovered that they sponsor banditry to chase away the host communities and then move in and start excavating.
You said no investor could export without creating value addition. Would you like to expatiate on that?
Value addition is very simple and self-explanatory. You can’t be talking about taking our minerals away without adding value locally, which means you must start a factory to produce something that is associated with the mineral you are taking out. For instance, if you are extracting gold, you don’t just take the raw gold out because we’ve also discovered that we are shortchanging ourselves when we allow them to take the raw gold out. You start a gold processing factory here in Nigeria and then create employment. That’s value addition. The one that we commissioned recently, I mean the groundbreaking of lithium factory that’s to produce batteries and all of that is an example. So they will be producing batteries here. Rather than the company taking the lithium away, they use it right there to produce batteries and then they can sell the batteries locally and abroad. That is local value addition. For the lithium company that was commissioned, the company promised to construct roads, hospitals, schools, etc, those are value addition to the local environment.
In your maiden press conference, you talked about a Nigerian mining corporation. How far with it?
The mining corporation is to act like a special purpose vehicle. If we are bringing in big players, they want to know that there is a body that they can deal with, rather than a fragmented kind of engagement with agencies. The Nigeria Mining Corporation would be similar to NNPC but in terms of governance structure will be quite different. For instance, we wanted to have a structure that is tripartite in nature, that the Federal Government will have equity there, likewise the private sector and the Nigerian people, which means a percentage will be given to the Federal Government as its equity, the private sector will get its percentage and the Nigerian public too. This simply means anybody can subscribe, buy shares in it. That’s the idea. It’s something that will give a sense of ownership to everybody, but it’ll be more substantially private-sector driven.
The company is being worked out now. In a couple of days or so, I’ll be going to the Federal Executive Council (FEC) for the approval for it. The president has signed off on it, but it needs FEC approval. So once that approval in principle is obtained, then we go into the structural section of it, the equity, the naming and the setting up with the Corporate Affairs Commission and all of the modalities. We have decided on the percentage for the private sector, but that will have to wait until FEC approval before it is made public.
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