The Lagos Chamber of Commerce and Industry (LCCI) has proffered solutions to drive potential investments and harness benefits across mining value chains.
Head, Corporate Communications, LCCI, Mr Sunday Osanyintuyi, stated in Lagos on Monday that this was done in collaboration with major Nigerian solid minerals sector stakeholders.
They include the Association of Metal Exporters of Nigeria and a group of companies.
Osanyintuyi quoted Dr Michael Olawale-Cole, President, LCCI, as saying that the recommendations were to generate insights that would position Nigeria to earn more foreign exchange from solid minerals.
Olawale-Cole said a report by the Nigerian Extractive Industries Transparency Initiative (NEITI) indicated that revenue from the sector to the Federation Account rose by 54 per cent from N75 billion in 2019 to N128 billion in 2020.
“Solid minerals exports in the last quarter of 2021 stood at N13.56 billion, a decrease of 25.95 per cent compared to the third quarter, but an increase of 201.41 per cent when compared with the corresponding quarter of 2020.
“These are confirmations about the potentials in the solid minerals sector yet untapped,’’ Olawale-Cole was quoted as saying.
The LCCI president said that the highlights from the Organised Private Sector (OPS) showed that the fragmented legislative framework of the 1999 Constitution hindered investments in the solid minerals sector.
According to him, the constitution, as amended, gives the federal government exclusive powers to legislate on mining and solid mineral matters.
He noted, however, that states had enacted parallel mining laws and regulations interfering and usurping Federal Government’s powers and the powers of the Ministry of Mines and Steel Development to regulate activities in the sector.
“Presently, Nigeria only attracts about 0.12 per cent of global exploration investments
“The emerging market for Nigeria’s solid minerals includes industrialised and emerging economies of BRICS countries and the G20 countries which created a demand for energy, metals, and minerals,’’ he said.
BRICS is the acronym for Brazil, Russia, India, China, and South Africa.
The BRICS members are known for their significant influence on world affairs
Olawale-Cole also noted that instability in laws and regulations gave bad signals to investors who would not want to risk nationalisation after they have invested in solid minerals exploration.
He stressed the need for government to establish a robust fiscal framework for investors and address bottlenecks caused by multiplicity of regulatory agencies.
He also called on government to tackle security challenges across mineral-rich communities as it had continued to undermine production and investments.
“There’s need to invest in refineries for minerals as we cannot continue to mine minerals and export them in their primary state or else Nigeria might remain a crude exporter of minerals, which is analogous to challenges in the oil sector.
“Government and private investors should secure communities’ buy-in in the projects to ensure environmental justice, economic empowerment, and social harmony.
“These are critical in preventing and replicating the flaws witnessed in the Niger Delta.
“Steel production should be encouraged because mining and metal production could be used to develop infrastructure and reduce import dependence.
“Nigeria must develop mineral commodities markets and dependent instruments to trigger innovation through technology, material science, biotechnology, and supercomputing alloy,’’ he said.
Osanyintuyi also quoted the minister of mines and steel development, Mr Olamilekan Adegbite, as saying that a well-governed mining sector with good investment inflows was fundamental to a diversified economy.
Adegbite noted that the solid minerals sector would have developed better than its present position, but was marred by low financial intermediation.
He urged the finance industry to invest in the mining sector to impact the nation’s economy positively.
He said the National Integrated Mineral Exploration Programme (NIMEP), a federal government’s had further exposed investment opportunities in gold, lead, zinc, battery minerals, barite, and iron ore.
He added that NIMEP which provides reliable geo-data for investment decision-making is a short-term initiative to auction the results from existing exploration and plough back the fund into the development of unexplored minerals.
The minister noted that the more sustainable approach was financial intermediation and foreign direct investment inflow into the mining sector.
“The success of rebuilding the industry to achieve the transformational ambition for shared mining prosperity depends on the participation of all stakeholders, including a vibrant financing industry.
“The Nigerian banking system has limited exposure to mining and this probably is due to a lack of sufficient understanding of the opportunities in mining or the complex nature of the sector.
“According to NIMEP, solid minerals are capital intensive, and this is evident when a 50-million-dollar investment was used in executing four (4) out of the forty-four (44) minerals discovered for exploration in Nigeria.
“The ministry would embark on a transformational reform agenda aimed at providing good practice in mineral resource management,’’ Adegbite said.