The mining industry is a multibillion-dollar sector that can create millions of direct and indirect jobs for the teeming youths of Nigeria. Sadly, Nigeria’s mining sector is largely undeveloped and neglected. According to the Ministry of Solid Minerals Development, mining accounts for only about 0.3% of Nigeria’s GDP. The country tends to focus more on oil and the service sector in raising its internally generated revenue (IGR).
Nigeria is blessed with various natural resources that can be harnessed for national development, including coal in Enugu, gold in Zamfara and Osun, lithium in Kogi, Kwara, and Cross River States, columbite in Nasarawa, bitumen in Lagos, Edo, and Ogun States, and iron ore in Kogi State, with special mention of the Ajaokuta Steel Company.
According to the constitution, the Federal Government of Nigeria owns the rights to all mineral resources in the country. It can grant titles to organizations to explore, mine, and sell these resources.
Mining activities in Nigeria date back as far as 1903 when the Mineral Survey of the Northern Protectorates was established by the British colonial government, followed by the Mineral Survey of the Southern Protectorates a year later. By the 1940s, Nigeria was already a major global producer of tin, columbite, and coal.
Mining is defined as the extraction or removal of minerals and metals from the earth. The Nigerian mining sector is estimated to be valued at around $750 billion. For a country looking to increase revenue, this sector provides a great place to start.
Challenges Facing Mining in Nigeria
- Regulatory and Legal Challenges: The mining industry in Nigeria faces a complex regulatory framework and legal issues. Inconsistent policies, overlapping responsibilities between federal and state governments, and unclear land tenure systems have deterred investors and hindered the sector’s growth. The mining industry demands a stable policy framework to boost investor confidence, given that it is capital-intensive. However, frequent policy changes with each election cycle erode this confidence.
- Impact of the Oil Boom: The oil boom in the 1960s severely affected the mining industry as Nigeria shifted its focus to oil, causing the mining sector to lose attention and development.
- Security Concerns: Many mining regions in Nigeria today are plagued by security challenges, including banditry and kidnapping. This negatively impacts investments in these areas and creates an unstable operating environment for investors.
- Lack of Adequate Support Systems: Mining is capital and resource-intensive, requiring costly machinery and infrastructure. Government and banks need to partner with investors, providing loans and grants to enable them to succeed in the industry.
Mining in Nigeria presents an excellent opportunity for the country to diversify its economy and reduce over-dependence on oil. Developing this sector will create millions of jobs and reduce vulnerability to fluctuations in oil prices. From metals to precious stones, Nigeria has untapped resources that, if properly managed, could become significant assets for national growth and development.
Ubong Usoro
