Issues and Inhibitors to Mining Infrastructure and Allied Services Development in NIGERIA (A private sector pers

1. Issues and Inhibitors to Mining Infrastructure andAllied Services Development in NIGERIA (A private sector perspective) by Chief Emeka Okengwu Cell:234 80 23003147 E-Mail: kulfana@yahoo.com

2. Nigerian Mining Scenario • Nigeria has had a long but discontinuous history of mining. • Organized mining began with the establishment of the minerals survey of the Southern and Northern Protectorates in 1903 and 1904 respectively • Nigeria became a major exporter of Tin, Columbite and Coal in the 1960s The downturn of the Nigerian mining sector was largely occasioned by: • The overdependence on crude oil exports (dutch disease) • The exodus of mining expatriates and companies during the 1966 civil war • The depressed commodities prices during the 1970s. • The collapse of the international tin council in 1985 Nigeria has introduced new elements in mining sub sector, which are: • Security of Tenure • Clearly defined tax regime • Guaranteed concession such as tax holidays, deferred royalty payments, capitalization of exploration and property cost expenditure • Establishment of the Mining Cadastre office (MCO) as an autonomous body to administer mining “Titles”

3. Issues in Mineral Dev in Nigeria • Despite potentials of huge deposits of Barite and Bentonite Nigeria’s still imports all the drilling fluids it consumes in the oil sector. • Despite its coal and lignite potentials, Nigeria has no coal fired power plant and still generates less than 3 000mw of electricity solely from hydro and gas. • Despite the abundance of iron ore deposits, an iron ore mine ,bituminous coal, limestone, a steel plant and four rolling mills Nigeria is unable to produce steel products. • Despite the abundance of phosphate Nigeria has no functional Fertilizer production or blending plant.

4. THE INHIBITORS TO SUSTAINABLE MINERAL BASED INFRASTRUCTURE DEVELOPMENT IN NIGERIA

5. The Major Inhibitors to mining Infrastructure: Two-Pronged 1 2 Bottlenecks inhibiting robustness of Mining Sector to Generate maximum Revenues and Operate with Environmental friendliness Dysfunctional Mining operations And Worse-off Mining areas and communities Absence of external Financial and technical Partnership and joint ventures = +

6. Prong 1 • Absence of exploration programs and deposits/resources data • Absence of a well-articulated policy thrust on attracting foreign direct investments • Absence of an effective environmental regulator for solid mineral sector • Unstructured/primitive mining operations and operators • Low access to facilities for bankable feasibility studies and Equipment procurement

7. Prong 2 Absence of External Financial and Technical Partnerships and Joint Ventures due to: • Lack of a defined exploration and development programme • Poor Government regulation (fiscal and tax regimes) • Absence of baseline data/information

8. THE WAY FORWARD

9. Structure Local Mining Companies to raise funds from local and international capital markets through debt or equity financing e.g. IPOs • Promote joint ventures between local mining companies and junior/major international mining companies and producers • Structured funding for integrated infrastructure and mining projects development • International development /venture funds to finance sustainable pilot project and bankable feasibility studies for miners in Nigeria • Initiate programs to improve the technical capacity of local indigenes to gain employment in mining industry. This can be done in conjunction with local educational institutions • Establishment of a mineral exploration fund

10. Conclusion • Nigeria has abundant but unexplored and unexploited mineral resources • Kulfana Mining company has prerequisite exploration rights and information on the mineral resources in Nigeria • The key to unlocking the country’s mineral petentials is in the establishment of venture funds for integrated mining and infrastructure development projects • The new fiscal and tax regimes for mining in Nigeria are investor friendly and meets international best practice

11. Thank You Chief Emeka Okengwu