Nigeria Leads Africa’s Mining Sector Resurgence

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By Segun Tomori

The 30th edition of “Investing in Mining Indaba” recently held in Cape Town, South Africa provided another opportunity for African countries through their Ministers of Solid Minerals/Mineral Resources to consolidate on the pact to forge a common front in projecting the continent’s interest in the global mining industry.

Nigeria and Uganda had led over a dozen other African countries into a coalition, early January, on the sidelines of the Future Minerals Forum in Riyadh, Saudi Arabia, to make a case for local value addition and maximum beneficiation from its vast mineral resources for citizens and member countries.

The coalition gave rise to the African Minerals Strategy Group, AMSG and Nigeria’s Minister of Solid Minerals Development, Dr. Dele Alake was unanimously elected as the pioneer chairman on the sidelines of the mining conference in South Africa.

Moving swiftly to rally his colleagues for concerted action, Alake declared that the era of carting away solid minerals without commensurate value addition to develop Africa’s economy is over.

His words, “We must speak with one voice on value addition as a prerequisite for investment in the mining sector. Let those who want our minerals know that if you go to country A, you have the same regulations and laws guiding the sector. You go to country B; you find the same. So, there is no divide and rule anymore. That is when we can show sincerity of purpose, and the world will begin to take Africa seriously. On behalf of our president, I pledge our full support to achieve our objectives.”

Doubling down on the resolve of the African continent, the Minister whilst speaking as a panelist on the theme, “ Positioning Africa to Succeed in Diversifying Global Value Chains”, emphasized the necessity of creating the value chain from exploration, to mining, processing, inventory management, transportation and then delivery to the end-consumer.

“All these processes require infrastructure, and in my engagement with private sector players over time, I have discovered that a lot of them prefer to engage in investments in mining sites close to ports. That means there is a need for transportation – roads and rails. I’m thinking that the best approach is to collaborate with consumer nations who need these raw materials on the provision of infrastructure without jeopardizing local value addition,” he added.

Highlighting why Nigeria should be the destination of choice for prospective investors in the Lithium value chain , Alake stressed that the country is experiencing a “Lithium boom” citing the preponderance of the critical metal in several localities, which he noted are literarily on the surface of the earth, in most locations.

“This will culminate in lower production costs for extraction compared to other countries.”

Whilst reiterating the need for Public Private Partnerships, PPP, in cahoots with multilateral financial institutions to unlock the requisite funding for mining sector development, the Minister informed his audience that Nigeria has taken the lead with the establishment of the Solid Minerals Development Fund, SMDF, to build the capacity of local investors to engage in minerals exploitation.

“The SMDF is also in partnership with the African Finance Corporation, AFC. This body has been responsible for encouraging local investment in the mining sector, and appreciable results are coming in. They are also through the AFC involved in the Lobito corridor involving Angola, Zambia, and DRC. We are encouraging the same corridor to be put in West Africa, starting with Nigeria because we have these mineral resources in abundance.”

Speaking further on financing, Alake charged African countries to take a cue from Nigeria by taking a critical look at the SMDF model. “While we look forward to the foreign financial institutions, I will recommend to other African countries to also look inwards. The SMDF in Nigeria is sourcing its funds from other economic engagements. I will recommend this policy initiative to other African countries.”

Back home in Nigeria, reforms of President Bola Tinubu on the mining sector are gathering momentum. Just recently, an inter-ministerial committee tasked with developing a blueprint for securing natural resources established by the president and chaired by Dr. Alake has since swung into action.