National Mirror www.nationalmirroronline.net
Executive Discourse
Wednesday, July 17, 2013
43
in funding mining sector’ tified minerals deposits distributed in the country’s richly endowed geology, how best can these be put to use? Well, I think we should do what other countries are doing, there are so many minerals in Mali, but what they did was to concentrate on a prioritised mineral. Mali concentrated only on gold, but we know that there are manganese, columbine and so many other minerals in Mali, but what they did was to concentrate only on gold. And I think the wisdom is maybe after exhausting gold, they will identify other minerals of advantage and start exploiting it. But here in Nigeria, it is not realistic to concentrate on one or two minerals because we have them in abundance and all the deposits are very rich but perhaps it will help us if we identify a specific number of minerals, just like what the Federal Government did, even though we have about 34 minerals in commercial quantity, they have identified seven as strategic minerals. So, what needs to be done is to really work on these seven minerals by sustained government investment. And also other agencies of government can be encouraged to invest in the sector. This kind of investment may not be possible without adequate budgetary allocation to the ministry in charge of mineral resources because mining is a real governed profession, I mean it is governed by law, and the supervisory ministry must be supported to perform its statutory function effectively. This cannot be achieved with the lean budgetary allocation that we see every year. Government must make a decision if they really want to develop mining, they have to come with aggressive funding support and also a large increase in the budgetary allocation of the ministry in charge of this solid mineral. If that is done, I think things will change for the better. A major thrust of the new mineral policy is the emphasis on private sector participation and improvement of the local communities where these minerals are mined from, what is your take on the new legislation? The new legislation is a very good document but you know in Nigeria we never lack policies and legislation. Our challenge is the implementation and this mining regulation which I think is one of the best mining regulations in the mining world. But I am happy that community relationship has been given attention. You see, no matter what, a miner has to mine in a particular community and these people suppose to be carried along because they are critical to a sustained mining operation. There is need for the provisions of the law to be strictly adhered to so that communities will benefit from mining activities in their respect communities and the investors will also have peace of mind without thinking of any rancour that is likely going to happen. The issue of Niger Delta is still very fresh in our minds, we are happy that it is gradually becoming a history. But let the challenge that was experienced in the Niger Delta not be replicated in the mining industry. And so, issues like community development agreement, issues like community social responsibility on the part of miners, issues like local participation in mining operations which are properly addressed in the new mining regulation should be translated into reality. And perhaps I should appeal to my colleagues the miners to be able to carry their communities along in the mining operation by so doing we will have a peaceful and sustained mining operation devoid of any rancour. What can foreign investors expect from Nigeria with respect to other incentives being offered by the government to prospective investors in the mining sector? I think foreign investors are protected by the Mineral and Mining Act. They are given a number of incentives, I understand they have right to repatriate their profit and their total capital whenever the need arise. So, they are not under any compulsion to say you can only repatriate a certain percentage of their profit. I also think there are a number of tax holidays and in event of importing their mining equipment it is duty free. There are more that I may not recall now, but even these are good enough incentives to at-
method of settling disputes, that is number one, number two, we also use sensitization as a means of sending our messages, of the dos and don’ts of the mining provisions and by extension MAN. There are challenges here and there. There challenges among the miners over a mining title, some will apply and others will come and work without authority, there are challenges between the miners and the mining communities, you know, there are challenges here and there, but what we do is we treat all these challenges and issues as family issues. We mediate; we have a number of committees whose duty is to mediate among members. And these issues we are not always in a hurry to make it public. But they exist. Our mediation process has proven to be very effective, so the answer is yes, there are erring members but we treat such issues in our own way.
THERE MUST BE A SUSTAINED AWARENESS AND SENSITISATION
PROGRAMME FOR THE BANKERS.
THEY ALSO NEED TO GET IN
TOUCH WITH OTHER BANKERS OVERSEAS TO SHARE IDEAS ON THE ADVANTAGES OF FUNDING AN ECONOMICALLY VIABLE SECTOR LIKE THE MINING SECTOR
tract foreign investment. Every profession is guided by certain ethics to check the activities of members, but over the years I have not heard that a miner was sanctioned, does this suggest there are no erring members in your midst? What we do, we as much as possible use mediation as a
If you are given to market the Nigerian mining industry to potential bankers who may be willing to invest in the sector but lack adequate knowledge of what to expect, how would address the issue? The first thing I will do is to draw a kind of programme for the bankers. There must be a sustained awareness and sensitisation programme for the bankers. They also need to get in touch with other bankers overseas to share ideas on the advantages of funding an economically viable sector like the mining sector. The government also need to package a carrot for them as an incentive, government can say okay we are going to provide like N500 billion as a kind of guarantee fund for miners to be able to access their loan for a given period. If that period elapses the bankers would have had idea about what the mining industry is, they would have idea about the associated risks involved, they would also have idea about a number of things. And this knowledge will give them the opportunity to repackage themselves towards so many mining specific projects. So that after that time, banks will no longer be afraid of the sector. They will instead, given the experience they have gathered, embrace the sector and make it a growing partner in the area of their business. Where do you see Nigeria’s mining industry say in the next five years? Well, in the next five years, all things being equal, Nigeria’s mining industry is going to be a giant industry full of foreign direct capital. Remember, just about two to three weeks ago, the Canadian and Australian financiers have been able to release some funds in order to bridge the gap between the World Bank intervention $122 million loan and the future massive intervention that is expected from the World Bank. So in between this period and the period of that big funding the Australian and Canadian financiers have been able send about $2 million just to sustain the tempo. And also remember that the President is currently in China, and if you are following his engagements in China, you notice that a lot agreements and understanding have been reached part of which of course is the development of mining sector. The Americans and European investors are also eyeing Nigeria as a country of high mining potentials. On the whole, in the next five years, we are expecting high level of activities, we are also expecting these mining pillars to come to Nigeria and partner with the local operators. We are also expecting state government because we are sensitising state governments, mining is not all about foreign investors, it is about foreign and local investors. We have very rich people in Nigeria who are not clear about what mining is all about. We are trying to encourage these categories of people also to try mining. I know recently Dangote made a pronouncement that he would invest something in mining. So, in the next five years, there will be aggressive investment both from foreign and local investors. We expect the artisanal and small scale miners to have been more enlightened and so the incidence of informal and illegal mining to have reduced drastically. We also expect the banks to have understood the sector and invest in it.