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26 — Vanguard, MONDAY, FEBRUARY 24, 2020<br />
FINANCIAL VANGUARD<br />
A new<br />
policy on<br />
mining is<br />
underway<br />
—Adegbite<br />
The industrialization of the Nigerian economy has<br />
remained a mere wish until now. However, in<br />
this interview, the Minister of Mines and Steel<br />
Development, Arc. Olamilekan Adegbite, told<br />
Vanguard how the Ajaokuta Steel Mills will change the<br />
story. He also explained that work has been going on<br />
to sign the proposed agreement with the Russians to<br />
complete and put the plant into operation.<br />
Excerpts:<br />
By Emma Ujah, Abuja<br />
Bureau Chief and Gabriel<br />
Ewepu<br />
WE have seen that you<br />
are passionate about<br />
the development of the<br />
downstream sub-sector of the<br />
solid minerals industry.<br />
What is the driving force and<br />
why do you think the<br />
downstream sector requires<br />
a new focus?<br />
That we derived from the<br />
original mandate of the<br />
Ministry and the mandate of<br />
the President is create<br />
employment and to increase<br />
the revenue base. If you look<br />
at the industry, value is lost<br />
by exporting raw ore. By<br />
exporting minerals as they are<br />
mined we lose a lot of<br />
money. Minerals require<br />
value addition and of course<br />
such lessons have been<br />
learned from the oil industry.<br />
Cost of bringing back<br />
refined petrol<br />
Look at the export of crude<br />
oil and look at the cost of<br />
bringing back refined petrol,<br />
diesel, kerosene and all that.<br />
If we could just add the value<br />
locally we could now export<br />
refined products and that<br />
would make a lot of money for<br />
us and save us foreign<br />
exchange as well.<br />
We don’t want to go down<br />
the same road in mineral<br />
export. People export raw ore,<br />
for instance when you export<br />
other minerals let’s say one<br />
tonne of raw tin as mined, if<br />
you convert that to tin ingots<br />
what you probably get from<br />
exporting the ore is a mere 35<br />
per cent .<br />
If you refined and get the<br />
real property of tin and you<br />
export it, you will sell it at a<br />
higher value and you would<br />
have reduced your cost.<br />
Meanwhile, when you<br />
export the raw tin you are<br />
exporting a lot of impurities<br />
which is of no value. The<br />
buyers are going to buy it<br />
cheaply and now whoever<br />
you sell it to will have to do<br />
the smelting to get out what<br />
they need which is the tiningot.<br />
So if you do that locally you<br />
get better value and you also<br />
create employment in that<br />
process, because that process<br />
itself goes through some<br />
certain stages which will need<br />
human resources.<br />
Therefore, essentially, we<br />
are trying to focus on the<br />
downstream to create that<br />
value and also to create jobs<br />
for our people. That is why<br />
we are reviewing<br />
development policy for the<br />
downstream sector.<br />
Why are miners and traders<br />
in minerals sector exporting<br />
them in their raw forms?<br />
One, government has not<br />
focused on it, so there is no<br />
policy in place. What we are<br />
doing now is that we are<br />
drafting a policy that is on my<br />
table right now. It has to go<br />
through some processes. It<br />
has to go to the (Federal<br />
Executive) Council before we<br />
can gazette and put it out for<br />
implementation. It does not<br />
have to go to the National<br />
Assembly, but it needs to go<br />
to Council for approval. There<br />
was no focus so people could<br />
do whatever they wanted.<br />
Two, the fact that mining is<br />
largely on informal side- it is<br />
mostly artisanal mining that<br />
our people do.<br />
These are people who are<br />
doing subsistence mining and<br />
not the right investments into<br />
mining. Now they use crude<br />
methods, simple implements<br />
•Minister of Mines and Steel Development, Olamilekan Adegbite<br />
to get minerals out and they<br />
cannot invest in the kind of<br />
effort that you need to process<br />
these materials. All they want<br />
is to get something out and<br />
make a little money to take<br />
care of their families and<br />
immediate needs. That is<br />
why they are called artisanal<br />
miners.<br />
Now, Nigeria is reaching a<br />
point that we are attracting the<br />
large investors, the majors are<br />
beginning to focus on Nigeria<br />
and they want to come in. We<br />
need this kind of policy in<br />
place so that the time they are<br />
here, you don’t start exporting<br />
Nigeria is<br />
reaching a point<br />
that we are<br />
attracting the<br />
large investors,<br />
the majors are<br />
beginning to<br />
focus on Nigeria<br />
and they want to<br />
come in<br />
the raw minerals. Nigeria<br />
will not benefit, we get the<br />
rough end of the stick<br />
because they will pay us very<br />
low, we lose all the jobs in the<br />
value chain downstream.<br />
That is what I am saying- let<br />
us put this in place now and<br />
as we progress, we also<br />
encourage the artisanal<br />
miners to sell to what<br />
government has created<br />
now. We have created<br />
approved Buying Centres.<br />
Whatever you realize in the<br />
raw form, sell it to our Buying<br />
Centres. They buy it from<br />
you at the right rate, they<br />
would not cheat you.<br />
Right now there are some<br />
charlatans who cheat people<br />
they go to them because this<br />
people are desperate. They<br />
pay them next to nothing for<br />
their efforts. But if you go to<br />
our accredited Buying<br />
Centres, they will not cheat<br />
you.<br />
Smelting<br />
plants<br />
Now these Buying Centres<br />
are now linked to the<br />
downstream people, people<br />
who have smelting<br />
plants. For instance, now we<br />
have given license for two<br />
gold refineries in Nigeria and<br />
they are already been built,<br />
one is in Abuja and the other<br />
in Ogun state.<br />
Therefore, instead of taking<br />
your gold out in that raw form,<br />
gold can be refined in<br />
Nigeria, to the value of what<br />
is quoted in the stock<br />
exchange. Gold is now<br />
having the highest rise. Gold<br />
is now selling for $1,600 per<br />
ounce.<br />
So Nigeria can participate in<br />
that, when we refine the gold<br />
in that line it’s called the four<br />
nines (99.99), but when you<br />
export your gold in the raw<br />
form, people will buy it<br />
cheaply from you and they<br />
will get the rich end.<br />
You have talked about the<br />
inability of the artisanal<br />
miners to invest in large<br />
plants requiring huge capital<br />
outlays, what steps are you<br />
taking to not only attract<br />
foreign investors- the big<br />
majors you are talking about,<br />
but even Nigerians to see that<br />
there is an opportunity in this<br />
sector so that they can<br />
massively in the sector and<br />
that could even encourage<br />
foreigners to invest?<br />
It is because mining itself<br />
comes with some risk and<br />
mining itself is not yet<br />
understood in Nigeria, we<br />
have lost mining for a while.<br />
The solid mineral industry<br />
was the mainstay of the<br />
nation’s economy in 50s, 60s,<br />
and even 70s, but since we<br />
discovered oil in 1956, mining<br />
has been on the decline.<br />
The knowledge of mining is<br />
not there and people want to<br />
put their money in what they<br />
know and that’s what the<br />
ministry is doing now. We<br />
are embarking on advocacy<br />
and sensitization to let<br />
people know that there’s so<br />
much in the sector.<br />
All people know is that gold<br />
sells so much that’s why you<br />
have a lot artisanal miners in<br />
gold, but you see beyond gold<br />
there are so many minerals.<br />
Nigeria has identified 44<br />
minerals till date and still<br />
counting because we are still<br />
Continues on page 27