The mining sector has been a key area of interest for President Muhammadu Buhari’s administration. However, Nigerians are yet to see the impact of the government’s plans concerning the mining sector on the growth of the economy. Last year, the mining sector contributed 0.33 percent, about N400 billion, to the country’s Gross Domestic Product (GDP).

Nigeria has about 44 solid minerals located across the country in commercial quantities. As part of the strategy to develop the mining sector, the Ministry of Solid Minerals has identified seven minerals for priority development: Iron ore, Coal, Lead/Zinc, Bitumen, Gold, Limestone and Barite.

The potential of the mining sector in driving the growth of Africa’s second largest economy is still untapped. Just yesterday, the Minister of Solid Minerals, Dr. Kayode Fayemi said, “Nigeria can generate at least N5 trillion annually from mining and exporting of its vast solid mineral deposits, with several multiplier effects on job creation, state development and social infrastructure that could position the solid minerals sector as the main catalyst for national development.”

In March, the road map of the Nigerian mining industry was concluded. Titled: “Road map for the Growth and Development of the Nigerian Mining Industry – On the Road to Shared Mining Prosperity,” the map creates a comprehensive outlook of the future of the mining sector. Just yesterday, the road map was endorsed by the African Development Bank after being critically evaluated by stakeholders.

A mineral rich nation but not a mining nation?

With over 2 billion tonnes of iron ore reserves, Nigeria is estimated to have the second largest deposit of Iron Ore in Africa and the twelfth largest globally. Ironically, however, the country imports $3.3 billion worth of steel into the country. The market size of the steel industry in the country has the potential to grow to by $15.1 billion per annum.

The Ministry of Solid Minerals estimates that over 1 trillion tonnes of coal resources are reserved in over 13 states. Manganese is situated in several areas of the country including Kaduna, Kebbi and Niger States. This month, Dangote Cement stated that it was going to start mining its own coal in Ankpa, Kogi State, from next month in order to deal with the shortage of gas in the country.

The mining of limestone has been successful with cement production at 21 million tonnes in 2014. Dangote Cement earned N389.2 billion revenue in the 2015 financial year alone. This week, a private mining syndicate reported to have discovered Nickel in Dangoma, a small farming town in Kaduna state.

Mining is estimated to be a potential high area of employment. The mining sector in South Africa accounts for half of the country’s exports and it employs about 440,000 direct workers. As at June 2015, The Australian mining industry employs about 174,000 direct workers.

However, the availability of employable skilled labour is a challenge the Mining Industry has to tackle as academic courses relating to the industry are unattractive and there is a lack on innovation in the industry. To this end, the Ministry of Solid Minerals has said that they are working with the National Universities Commission to provide the required skilled labour needed in the industry.

In addressing the issue of license usage, one of the major constraints the sector has faced is financing. Dr. Kayode Fayemi stated that about $5 billion is needed to commence full operations in the mining sector. Many banks are still resistant in issuing loans to the sector due to the lack of tangible data. However, the president has recently approved the Nigerian Natural Resource Development Fund to help boost investment in the mining sector. Investors can now receive capital through the fund.

The types of licenses and leases that can be issued include the Renaissance Permit (RP), Exploration license, Quarry Lease, Small-Scale Mining lease, Mining lease and Water Use Permit. One of the tools that the Ministry of Solid Minerals has used to ensure investors utilise their licenses was to introduce a stringent “use it or lose it clause.” The Ministry ensured that the companies or individuals who own mining licenses are compelled to use their licenses or risk losing them.

The Ministry is also improving on their Geosciences data to ease the analysis of production and profitability estimates and help increase investments in this sector. The bio data is also going to address areas where solid minerals can be found in commercially viable quantities. According to the Minister, the bio data  is expected to be available by the end of 2017.

Nigeria is expected to gain tremendously from the growth of the mining industry as it will aid in the diversification of the economy. Earlier this month, the government regained the ownership of the Ajaokuta Steel Complex after an eight-year-long fight with Global Steel Holding Limited. The government has started a search for private investors to operate the facility. With proper investments, the Ministry of Solid Minerals has estimated that the mining sector could contribute 5 to 7 percent of the Nigerian GDP. This would certainly boost development and reduce the rate of unemployment in the country.