When a topic on the mineral resources in Nigeria is discussed, crude oil is the first thing that comes in mind. Absolutely, this view is understandable, given the fact that crude oil accounts for up to 95% of the counties foreign exchange, and 80% of government revenue.
However, crude oil is not the only precious mineral in Nigeria. The resources underneath the Nigerian soil are numerous and available in commercial quantities, from its 2.7 billion metric tonnes of iron ore to its 3 billion tonnes of coal to 2.2 trillion tonnes of barite, chrome ore, coal, white marble, quartz, manganese, copper, uranium, gold etc. In fact, before the discovery of crude oil in the 1950's, Nigeria was the highest producer of mined metals.
All hope is not lost, as the government plans to revive the mining industry to raise its current contribution to the economy from 0.5% to 5% in 2015. To achieve this goal, the government has put in place new laws to support privatisation of the mining sector. Under this new regulation, foreign companies can now claim 100% ownership of mining operations, and also enjoy three years tax holiday, as well as free repatriation of profit and capital. Consequently, most foreign investors are willing to bear the risks and cost of exploration, based on the implementation of a suitable policy framework.
In line with this recent support from the government, four mining companies who have completed their exploration program will begin mining of iron ore and gold this year.
These companies are Mines Geotechniques Nig. Ltd., an Australian firm, and Northern Numero Resources Ltd. from the UK were granted licences to mine gold in Kebbi. While two other Australian companies, Segilola Nigeria Ltd. and KCM Mining Ltd. would mine gold in Osun and iron ore in Kogi, respectively.
KCM Mining Ltd., which started exploration activities about four years ago in Kogi, completed the exercise last year and traced about 500 million tonnes of iron ore. Segilola Nigeria Ltd., also traced over one million ounces of gold in Osun state.
The World Bank is also in support of the development of the mining sector, and has made funds available through various agencies. These include the Multilateral Investment Guarantee Agency (MIGA) of the World Bank, the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation, and the International Development Association.
This initiative by the Nigerian goverment to revive the mining sector, is indeed a welcomed development. However, it is important to put in place strict regulations on health and safety, in order to protect the miners and the general public.