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The outgoing Minister of Mines and Steel Development, Dr. Kayode Fayemi who will finally leave office on Thursday May 31, 2018 says his leadership has placed the Nigerian mines and steel sector on a path of sustainable development that will lead to economic diversification, adding that in his absence, his Minister of State, Abubakar Bawa Bwari is most suitable to lead the team in pursuit of set goals contained in the Roadmap for Growth and Development of the sector.
Fayemi who assumed Minister on 11 November 20015 spoke at an emotion-laden valedictory ceremony in Abuja on Wednesday. He said: “On one hand, I have a deep sense of pride about my contributions to the landmark achievements we have been able to achieve in the sector and I am thus transitioning out with my head held high. On the other hand, I am overwhelmed by emotions as I bid goodbye to a sector that I, together with other patriots, have invested a great deal of passionate and patriotic efforts over the past two years.”
Describing the period of his stewardship in the Ministry as strategic, Fayemi, whose resignation takes effect tomorrow 31 May, 2018, said the period coincided with the administration’s determination to reposition the minerals and metals sector to serve as a frontier of economic diversification, jobs creation and the broadening of the range of economic opportunities available to Nigerians. According to him, the overall goal has been to ensure that the sector contributes optimally to the building of a strong and virile economy that supports human development goals.
Discussing achievements, Fayemi, who the Ekiti State APC gubernatorial flag bearer said: “I must at this point state that the successes we have achieved so far are numerous, and time would not allow us to touch on all of them in detail. They are however available in greater details in our handover notes which includes Departmental and Agencies reports.
“We were able to evolve a Roadmap for the Growth and Development of the Nigerian Mining Sector, a document that was produced through a robust process of consultations and stakeholders’ engagements and was approved by the Federal Executive Council on August 31, 2016. He said the document prescribes collaborative actions of all stakeholders to guide the growth and development of the sector over the next two decades.
He said his leadership also did much to improve funding of the Sector: “The ministry sought for and obtained approval for N30bn, approximately $100m intervention fund from the Federal Government, partly to help provide cheap loans and grants to industry participants as well as for directly investing in foundation infrastructure.
“For the first time since 2004, we got FEC approval in October 2016 for this amount by securing access to the revolving mining sector component of the Natural Resources Development Fund.
“We also secured support from the World Bank for the funding of the Mineral Sector Support for Economic Diversification (MSSED or MinDiver) program, a critical component of which is to provide technical assistance for the restructuring and operationalization of the Solid Minerals Development Fund, which would make finance available to ASM operators through micro-finance and leasing institutions. The fund will also help to bring back on stream previously abandoned proven mining projects like tin ore, iron ore, coal, gold and lead-zinc.
“We have reached an advanced stage in assembling a $600M investment fund for the sector, working with the Nigerian Sovereign Investment Authority, the Nigerian Stock Exchange and other financial institutions.
Fayemi further said that in order to address a long standing quest for geological data, the ministry facilitated payment and the release of the results of the aeromagnetic survey of the whole country carried out since 2006, but which had not been released due to non-payment.
He said the Nigerian Geological Survey Agency (NGSA) has undertaken additional ground investigations nation-wide to upgrade our National Minerals Database and to further ascertain the assays of our mineral assets to the level that can easily attract financial investments and assure operators of the scope of operations required for further exploration.
“The Nigerian Geological Survey Agency (NGSA) has also signed and operationalised MoUs and Technical Cooperation Agreements with the China Geological Surveys, Shandong Mineral Exploration Agency and the National Office Hydrocarbons and Mines ‘ONHYM’ of Morocco. The collaborations are intended to leverage on the expertise and state-of-the-art technologies of these organizations in assisting Nigeria generate investor friendly geoscience data.
Further discussing achievements, he said the ministry has initiated engagements with SGS, a world-renowned material testing company, to strengthen the capacity NGSA Laboratory Facilities in Kaduna towards achieving ISO 17025 accreditation within the shortest possible period. The objective is to significantly reduce the thousands of mineral samples being shipped abroad for analysis thereby reducing the huge revenue loss and correspondingly incentivize the mining sector.
“As part of the support we received from the Natural Resources Fund, the Ministry has finalized exploration initiatives totaling N15 billion allowing successful entities help with the exploration of priority minerals like Gold, Lead, Zinc, Rare earth metals to mention a few.
We also addressed weak institutional capacity of the sector by initiating the establishment of the National Minerals Commission (NMC), which would harmonise the functions of the Cadastre Office and a number of key departments in the ministry, under a unified administrative structure for greater efficiency and effectiveness in sector governance. This has been approved by the FEC and passed 2nd reading at the National Assembly.
Fayemi said that under his guard, the administration of mineral titles was overhauled stating that “for the first time in very many years, we implemented a provision in the Nigerian Minerals and Mining Act, 2007, which allows for the revocation of non-performing or defaulting mineral titles,” adding that the measure led to the revocation of a number of titles, and the generation of revenue to the federation account from titleholders who met the deadline to regularize their payment statuses.
“The exercise which made non-performing mineral titles available for acquisition by serious operators/investors, also sent a strong signal to the mining community of our improved capacity to properly regulate the industry and penalize those that deprive the country of due revenue.
“We have strengthened the capacity of the MCO to ensure a seamless process for obtaining exploration licenses, permits, and approvals for willing and credible investors. We have also set in motion parameters to decentralize the operations of our cadaster office by establishing six (6) regional outposts for the MCO to further fast track the procurement of licenses and titles.
“We have reviewed the explosives act and stemmed cases of explosives’ proliferation, pilfering and diversion, in partnership with the NSA’s office. We have also improved collaboration between the ministry and our security agencies, especially the Nigeria Customs Service, in addressing illegal exportation and smuggling of minerals; and the NSCDC in checkmating cases of illegal mining activities.
“We have improved sustainability in our mining sector by producing the Mining Environmental Regulatory Compliance Handbook, as well as the guidelines for Environmental Protection and Rehabilitation Programme to ensure sustainable mining in Nigeria.
“We have reinvigorated our Mines Surveillance efforts, with the deployment of newly trained and empowered officers across the federation. Today, we would also be commissioning 38 new vehicles which have been procured for our officers in the field for greater efficiency.
“We have facilitated delivery of a centralized GIS Web portal; as well as ICT Infrastructure upgrade and automation of the monitoring of mining activities.
As a way of addressing limited supporting infrastructure required for the proper functioning of the minerals and mining ecosystem such as railroads, competitive financing, systems, mine and asset security and related support services are being developed in concert with other government entities. “For instance, as part of our efforts to de-risk the sector, we are in discussions with the Bank of Infrastructure, as part of a consortium, to attract private capital investments for critical mining infrastructure.
“We have also commenced the development of mining resource corridors around contiguous States and along key infrastructure like railways, to help establish cluster industrial zones, which will become the fulcrum for increased economic opportunities and growth. We believe that when states are able to determine their comparative advantage within the mining resource corridors, they can also make meaningful infrastructural investments to support our modest efforts.
Discussing efforts to address limited cooperative federalism bedevilling the sector, the outgoing minister said he sought and got approval for the implementation of the constitutionally guaranteed 13% derivation for mineral revenue to states, similar to the derivation that oil-producing states currently enjoy from the federation accounts.
While saying that the federal government has reviewed its approach to licensing with regard to state ownership, he explained that in principle, federal government cannot give states licenses as separate legal entities, but that companies in which the states have an ownership interest can bid for and receive licenses. “We are also working closely to build the capacity of state governments in structuring Special Purpose Vehicles to participate in Mining in their jurisdictions, without undermining private sector players and ultimately discourage mining activity within their states,” he said.
“We have improved the productivity of the sector by tripling the ministry’s contribution to the federation account to about N2Bn in 2016, up from N700M in 2015,” he said adding that the sector also recorded a 7% increase in GDP in 2016, in spite of the country being in a recession.
He referred to an affirmation of the Nigerian Bureau of Statistics that revenue from exports in the mining sector grew by 592% between 2016 and 2017 adding that goals were also scored to stem illegal mining while adding that other goals were scored which has now repositioned the sector to fulfil its role as a main driver of the country’s economy.
The Minister of State, Abubakar Bawa Bwari whom Fayemi recommended as a suitable successor described the outgoing minister as a patriot who was passionate about the development of the sector and assured that he will continue the pursuit of the shared vision.
Permanent Secretary in the Ministry, Dr Abdulkarir Mu’azu who pitched his tent with the Minister of State further commended the leadership style of the outgoing minister saying that he has laid a solid foundation for the growth and development of the sector.