24022020

FINANCIAL VANGUARD
A new policy on mining is underway
Vanguard, MONDAY, FEBRUARY 24, 2020 — 27
Continues from page 26
spending more on
exploration. So Nigeria has a
lot and while people are
focusing on gold, there are
even gem stones that are even
more expensive than gold,
and people don’t know.
That is why artisanal miners
are focused on gold, but there
are other minerals they don’t
know that we have in Nigeria
that can be tapped into.
Use mining licences or lose
them
There are a lot of Nigerians
who have licenses but are
holding unto mining licenses,
they don’t want to commit
because of the risk. That’s
another advocacy we are
doing. We want to clean up
the sector because the law
says if you are not doing
anything with it will be
revoked. The law of
mining licence is “use it or
lose it.”
I think recently we revoked
about 1, 800 licenses and it is
a continuous process. We go
through the list to find people
who have it and have not used
it because when you are doing
the right thing you are
supposed to be filling a report
to the Cadastral Office and
the mining Inspectorate.
When you are not filing such
reports, it means you are not
doing anything with it. The
law says you use it or lose it.
Sir, following on that line,
when you announced a plan
to have an agreement with
Russians towards the
completion of the Ajaokuta
Steel Complex, there was a
lot of euphoria because
Ajaokuta is considered a low
hanging fruit. What exactly
is the status of the planned
agreement with the Russians?
It is good that we went to
town then, it was something
that was worth celebrating.
Completing
Ajaokuta
The President went to Russia
with the basket of requests,
that was during the Russia-
African summit in Sochi in
October last year. On the
sideline of that summit, we
had a bilateral with the
Russian President.
One of the requests that was
tabled was for the Russians to
come back and complete
Ajaokuta, minding the fact
they built it in the first place,
when they were Soviet Union.
It was essentially the
Russians and the Ukrainians
under the Soviet Union- it was
big country then, that built
Ajaokuta, to about 95-98 per
cent completion.
The request that we made
was, we’ve tried some
commercial to complete
Ajaokuta avenue in the past
which have failed, so now we
want to try a government to
government arrangement.
And president Putin acceded
to that and promised that the
Russian government will do
that. The beauty of it is that
we got funding- the Russian
Export Centre which is akin
to what is called EXIM Bank
in other countries pledged a
sum of $460million towards
this project, while Afrixim
Bank which is the bank that
we are also shareholders, also
pledged a billion Dollars.
The beauty of it is that the
money is not tied to Nigerian
revenue. It is tied to revenue
from that company. So
Ajaokuta is beholding to pay
back the money that is used
to complete it. That is why
this is a Build-Operate-
Transfer. It is the details that
we are going to work out. The
kind of money it needs to be
running. Ajaokuta is such
that we do it properly.
There’s a business case for
that and it can pay for itself.
Catapulting into
the industrial era
That was too good a news to
keep to ourselves and so we
went to town and that’s why
that was celebrated because
Ajaokuta is something that is
just waiting to catapult us into
the industrial era. Nigeria is
not industrialised because to
produce simple implements,
complicated tools, vehicles,
aircraft parts you need steel.
And that’s the problem we
have in Nigeria, we have not
been able to manufacture
those things because we do
not have steel.
We need to produce liquid
steel which can now be
manipulated into many other
things. Once you produce
liquid steel, you can do
anything you want with it,
you can alloy it- that is add
some metals because you want
to have some benefits from
that alloy. You can change it
to flat sheets, which of course
goes to form other shapes,
you can start making body
parts for cars. That is why
everybody is excited about it.
What is the status of Itakpe
in this new arrangement?
Itakpe and Ajaokuta shoud
have even been the same
company. Itakpe was created
solely because of Ajaokuta.
For you to produce steel you
need iron ore. Now when the
steel policy was being
formulated in the 60s or
so. The iron ore deposit in
Itakpe is so vast but it is not
the biggest in terms of reserve.
The biggest is actually also in
Kogi, it is Agbaja, but that
comes with a flaw in it
because it has phosphorus in
it. Phosphorus in iron makes
•Olamilekan Adegbite
the steel to be brittle.
In Agbaja the iron content
is higher but it has
phosphorous the richer the
ore in terms of iron content the
better for making steel. Itakpe
iron content is lower but it is
pure so they settled for Itakpe
and why that company was
now built, the company was
built as a beneficiation
plant. What is found in Itakpe
The government
put N2.5 billion,
BoI has a
marching fund of
another N2.5
billion making it
N5 billion
is about 35% pure iron. With
the beneficiation that is
enrichment that is done at
Itakpe through a process
that’s why it’s a whole
company, it upgrades to about
65%, 68% iron content which
is now sent to Ajaokuta and
that’s why a rail line is built
between them. Like I said
NIOMCO and Ajaokuta are
tied together. NIOMCO just
needs a few refurbishments.
Don’t we have issues about
the Indians who took it….
The Indians issue is actually
with Ajaokuta itself and not
with Itakpe, Itakpe is clean.
And has the legal issue
around Ajaokuta been
resolved?
Its ongoing, it’s a parallel
issue, it is been resolved.
The Bureau Public
Enterprises is handling that
so it is been resolved and we
are making progress, we had
a meeting in December
towards the resolution of that,
so that legal process is been
resolved legally while this
process to revive Ajaokuta is
also going on.
What’s the update on BOI
loans for miners?
The beauty of it is as of now
two have been granted but I
think about 20 loan
applications have been
approved and those 18 people
that have not been disbursed
are to fulfill one or two
requirements. Till date, the
total application for the loan
even exceeds the money that
we have there. The
government put N2.5 billion,
BoI has a marching fund of
another N2.5 billion making
it N5 billion. But the
application till date is about
N9.8 billion so even far in
excess of what we have there
but those who have met the
criteria and have been
approved areabout 20.
Essentially people are just
realizing that this is not your
share of the national cake.
This is something to help you.
The interest rate is very low,
it is five per cent and it is
supposed to help you in your
mining operations so that it
can contribute to the bottom
line for Nigeria in terms of
revenue, employment. That
is why government put this
money in place.
A lot of people had that
mistaken impression that this
is their own, so they went
there with the intention of not
having the proper paper,
means of paying back. So if
you took the money and
unable to pay back others
won’t be able to benefit, it
suppose to be a recycling
thing.
How are you going about
resolving the friction
between the federal and state
governments in the
industry? The states claim
ownership of land while
minerals are on the exclusive
list?
We are resolving that
problem and it is through
advocacy. I went to the NEC
(National Economic Council)
which is of course chaired by
the vice president, something
in October last year to present
our problems. You know NEC
is made of governors and the
Vice President. So the
governors also expressed
their grievances against what
federal government is doing
and all that.
Resolution of
the problem
We all agreed that for this to
work, all governors accept
that this is a constitutional
matter -that mining belongs
to the federal government
exclusively. But they have
a few things that they think
we should do to carry them
along. So a committee was
set up to be headed by the
immediate past Minister
(Kayode Fayemi), who is now
a governor now. Wearing
those two caps, he knows
where the shoe pinches, so to
speak.
He is the chairman of that
committee which was formed
by NEC to help us resolve all
these. I am a member of that
committee and a few other
governors. It is for us to
harmonize our positions. I
think it is something that we
are working out. Beside that
myself and the minister of
state will be visiting a lot of
states on advocacy. I was in
Lagos, Osun, Nassarawa, and
I think the Minster of State
has been to a few other states
also. We are getting good
responses from all these
governors and everything
seem to be going on very well.