Mining, as Dangote Extends Sector’s Dominance to over 54%
Emmanuel Addeh in Abuja
Edo state has outperformed Ogun and Kogi, two states that have traditionally dominated the mining sector, with the Dangote Group extending its control of the solid minerals industry to 54.2 per cent.
This information was contained in the 2023 Solid Minerals Industry Audit report just released by the Nigeria Extractive Industries Transparency Initiative (NEITI) in Abuja.
The solid minerals audit sector report contains the outcome from the reconciliation of financial flows, tax and non-tax payments and other payments mandated by relevant Nigerian laws, together with the ‘physical’ and ‘process’ activities in Nigeria’s solid minerals sector in the year under review.
During the period, a total of 2,833 licences were issued, the report said, a 114 per cent increase in licences given out to operators when compared to the previous year 2022, which was 1,325 licences.
Nigeria is believed to have as much as 44 mineral types, including 3.5 billion metric tons of iron ore reserves, 2.7 billion metric tons of coal reserves as well as 2.5 million ounces of gold reserves, but which remain largely underexploited.
Some of the identified challenges besetting the sector are: Lack of infrastructure, inadequate funding, weak regulatory framework, insecurity, environmental concerns, corruption and inadequate data.
Nigeria has also historically focused on oil, with little government support for the solid minerals sector, coupled with insufficient policy implementation and support.
NEITI stated that a total of 1,537 companies paid both royalty and annual service fee during the review period, comprising 110 extractive companies and nine government entities, with a materiality threshold of N6 million.
Besides, the aggregate of total receipts by federal, states, and local government agencies experienced a 16 per cent increase in revenue collection compared to 2022 in the sector, the report added.
Total mineral production was just about 95 million tonnes, representing an increase of 24.34 million when compared to the previous production of 70.72 million tonnes, thus indicating a 34.4 per cent increase.
“Minerals with the largest production volume in the year under review were granite, limestone, laterite, clay and sand. The major contributor to production are Dangote, BUA and Lafarge, with a combined production quantity and royalty payment of 51,615,051 tonnes and N3,227,611,424 respectively.
“Notably, Dangote accounted for significant share of total production of 54.2 per cent and royalty of 35.8 per cent. These figures underscore the significant role played by these major companies in the mining sector.
“As regards state production, Edo recorded the highest production in the year under review, with a total of 19.4 million tonnes, followed by Ogun with 15.3 million tonnes, and Kogi with 10.9. million tonnes. The least production volume was recorded in Borno State with 9,352 tonnes,” the 2023 solid minerals report stated.
Checks by THISDAY showed that in 2022, Ogun recorded the highest production of solid minerals with 15.3 million tonnes, followed by Kogi with 14 million tonnes and Edo with 8.6 million tonnes. Like in 2023, Borno came last in terms of solid minerals exploitation with 105,000 tonnes.
Despite its many highly valued mineral resources, Nigeria continues to exploit only the basic ones. In the latest NEITI report, it listed limestone, granite aggregate, sand, laterite, clay and granite dust as its key solid minerals.
To reduce the opacity and inactivity in the sector, NEITI recommended that the Ministry of Mining Development and Mining Cadastre Office (MCO) should create a system of monitoring and tracking the operators that are active and non-active within the sector
“MCO should enforce the penalty of non-usage of licences as stipulated in the Minerals and Mining Regulations 2011 in Part II, Section 93. The Government should increase funding and introduce appropriate technology to support accounting, monitoring and enforcement activities.
“The federal government should encourage whistle blowing on illegal mining and environmental violations by putting in place compatible policies,” the report stressed.
It advised that licence holders should start exploration within the stipulated time or face license withdrawal, urging the authorities simplify procedures, reduce delays, and tie new licences to local value addition.
The initiative further called for the strengthening of regulatory bodies, enforcement of compliance, and implementation of digital solutions to reduce corruption.
NEITI also said that the government can attract investors to the sector through incentives and roadshows, and encourage public-private partnerships, invest in transport and power infrastructure to support operations and reduce costs.
“There is need to enforce strong penalties for non-compliance to deter companies from hiding Beneficial Ownership information, improve data collection and verification and establish comprehensive systems for accurate and complete data, using centralised registries and technology.
The presence of many non-active operators in the sector, the report said, suggests that some licence holders are merely speculative, which discourages genuine investors and reduces potential revenue for the country.
“A total of 628 exploration licenses were issued. But none was converted to mining licenses which encourage speculative holding. This practice hinders serious investors, negatively impacts reserve growth, leads to future revenue losses and illegal mining, undermining the sector’s growth,” the document stated.
It also urged government at all levels to work towards improving the security of lives and properties across the country as this will also encourage the resumption of mining activities in some areas affected by insecurity.
