It would be unsurprising if many readers of this piece were oblivious of the fact that Nigeria has at least 34 mineral types occurring in more than 450 locations all over the 36 states and the Federal Capital.  The reason is obvious:  that incurable disease that has plagued many nations with huge crude oil endowments, the Dutch Disease.  Despite that the oil and gas sector was largely developed through revenues generated from groundnut pyramids; the cocoa and palm oil plantations; tin and coal mines, our dependence in the so-called “Black Gold” has stymied the exploitation of our agricultural and mineral endowments.

However, while Gold will continue to be of value over time, the same cannot be said of the “black gold” for its value in the future would be determined by the extent to which hydrocarbons remain a principal source of energy.  The import of this for us as a Nation therefore, is to begin to diversify the economy and reduce the over-dependence on oil as a major foreign exchange earner.  This is the fundamental basis for the development of the solid mineral potentials of the country.   Endowments like potentials in so far as they remain untapped and unrealized are of no benefit to a Nation

Minerals and the mining operations associated with them, has become an essential element for sustainable growth and development.  Minerals serve as the basis for industrial production, revenue generation, employment creation and human capital development.  Regrettably in our case, we have not been able to translate these endowments into beneficial consequences for the Nigerian.  Therefore, the sustainable use of Nigeria’s mineral resources is fundamental to poverty reduction and long-term development. Unfortunately this objective has not been realized due largely to the non-existence of the three pivotal pillars of economic reform success – leadership; organizational structures and institutions; and legislative and enforcement mechanisms. 

It is largely unsurprising that the contribution of the sector to the National economy has been quite disappointing.  Many would shudder at the fact that despite our seeming huge endowments of solid minerals, revenues generated by the sector in 1999 was a paltry 80.9 million naira, which slowly grew to 309.2 million naira in 2002, and 298.5 million naira in 2004.  I am very optimistic that, if properly developed, the sector has the potential to rival oil as a major revenue earner for the country.   The optimism is beaconed on the vision we have for the sector. A vision driven by the strong desire of this Administration to not only increase the sector’s overall contribution to the treasury but more particularly, to provide an opportunity for each state, by virtue of being home to one mineral occurrence or the other, to contribute fairly to the national treasury.

The vision for Solid Minerals Development revolves around the conscious attempt to expand the boundaries of knowledge of our mineral potentials and the possibilities existing therein.  Our vision also is to promote the exploitation of the mineral endowments spread across the nation for the wealth and peace of all Nigerians.  To guarantee wealth and peace in the development of solid minerals, we must ensure that the mistakes of the oil and gas sector, in terms of opaqueness, host community discontent and environmental degradation are not repeated.  Ultimately, the goal is to transform Nigeria’s mineral sector into an irresistible mining destination for global capital. 

So what strategies have been adopted to make all this happen? First, we have decided to walk the talk by clearly demonstrating this Administration’s commitment to ensuring that the future role of government remains that of “administrator-regulator” rather than “owner – operator”.  In the past two weeks, final payments have been made to employees of the Nigerian Coal Corporation (NCC), Enugu and the Nigerian Mining Corporation (NMC) in Jos.  This is prelude to the partitioning of the coal properties for competitive bidding during the first quarter of 2006.  In this manner, ownership of these companies would be transferred to those with the competence to manage it profitably – the private sector. 

Secondly, the 1999 Minerals and Mining Act have been reviewed to ensure that it passes the global best practice test.  The new law will ensure security of mineral rights tenure with explicit and transparent criteria for granting licenses and leases. The review would also allow for the establishment of State Environmental Management Committees to foster more understanding amongst stakeholders (comprising the three tiers of government, miners and host communities), resolve conflicts, mediate on issues of compensation and enforce environmental protection rules.  It would also permit the setting of good standards on environmental management and remediation, and health and safety practices in the mining industry.  To further demonstrate the commitment to ensuring that this law passes the best practice test, consultative meetings were held in London and Washington, DC, attended by some members of the National Assembly, natural resource legal experts, investment bankers and financiers; and mining operators.  The feedback has been extremely encouraging and is a validation of our efforts to making sure that we remain globally competitive in mineral and mining sector.
         
We have also begun the process of establishing a computerized National Mining Cadastre and Mineral Title Registry that will provide a transparent “first-come, first-served”, tamper proof system that will ensure a rapid method for processing and approving of all applications for permits and licenses.  The new Mining Cadastre, which will be opened in April 2006, is our answer to both the opaqueness and lack of due process that has plagued the sector.   However, to ensure that new cadastre does not inherit the problems of the past, a clean-up exercise is already underway.  That exercise would clearly identify holders of genuine mineral titles; determine whether obligations to government are being met; resolve the cases of overlapping titles and eliminate the incidence of illegal miners. 

Furthermore and in clear demonstration of our understanding of our role as a knowledge-based ministry, geological maps and mineral databases of the thirty-six states and F.C.T produced in digital format, was launched in August 2005.  The maps show the Geology of each state or locality, including the structure, rock types and their age, the number of minerals already discovered in your state and their exact locations.  Such reliable baseline geological data is critical for guiding investment decisions in the sector.  Presently, airborne geophysical survey is ongoing and at its completion, we expect to have more comprehensive and more reliable data on mineral occurrences across the country. It is important that the Geological Survey Agency as a market-facing agency become more responsive to the demands of the private sector.  Therefore, institutional autonomy would be critical.  The bill establishing the Survey Agency is therefore welcomed and the support of the House Committee on Solid Minerals Development in this regard, very well acknowledged.
 
Finally, we have embarked on a comprehensive organizational structural reform in line with the Public Sector reform strategy of this Administration.  We have therefore restructured the ministry to play its role as a market-facing ministry.  Some of the strategies we have adopted include comprehensive re-branding of the ministry as well as aggressive promotion of the sector both domestically and internationally. 

We are not unmindful of the challenges that abound, one of which is the relationship between the federal, state and local government in the development of the solid minerals sector.  In many states, Ministries of Solid Minerals Development have been established in response to the inactivity in the sector.  However, just as the constitution does not allow for the establishment of States Ministries of Foreign Affairs or Petroleum Resources, the existence of such ministries can only send signals of disorderliness to the investor community. A consensual relationship between the Federal and State Government would be central to the orderly development of the sector.  The adoption of the derivation principle in the solid minerals sector would not only solidify such orderliness but has greater implications for the issues of resource control and peaceful co-existence given that mineral occurrences are scattered all over the federation.

The present reforms in the solid minerals sector offer significant challenges and business opportunities.  The challenge rests in the provision of that environment that addresses the issues of security and tenure; transparent procedures for obtaining access to title; baseline information and data that would help determine the bankability of reserves amongst others.  The opportunities however rest on a private sector that is awash with entrepreneurial and innovative minds.  The private sector must therefore begin to show its commitment to the development of the sector via Public-Private Partnerships initiatives.   In South Africa for instance, dedicated railway lines are being constructed for coal exports.  These efforts are great examples of how Public-Private Partnerships (“PPP”) can support economic growth.  The private sector must also begin to design schemes that would provide financing to both small-scale and junior mining companies.

If Nigeria can boast of having the highest concentration of varieties of solid minerals in Africa, then there is no justification for the Nation to lag behind her (other African) peers in the exploitation of these minerals.  There is no silver bullet that will ensure the provision of jobs and other essential services to the Nigerian.  What is essential in the solid minerals sector however, is a repositioning, a transformation and the recognition that ideas drive innovation and both fall within the core competency of the private sector, a sector that I believe should drive growth in this sector.  The Government is making significant progress in providing that environment that would allow private initiatives to thrive, the biggest challenge however is whether the private sector have “Got the Guts” to exploit these opportunities.  It is the only way to developing and managing our endowments and providing answers to issues of poverty eradication, employment generation, wealth creation and most importantly economic diversification.  It is the only way to ensuring that we  “Make The Earth Work For Us All”.

*Ezekwesili is the Minister of Solid Minerals Development