Small-scale mining in Nigeria

Small-scale mining in Nigeria
Small-scale mining in Nigeria

Small-scale mining in Nigeria

ABSTRACT:

The mining industry in Nigeria is one of great potential. It is however only just developing. Small-scale mining is an integral part of mining in Nigeria, which can contribute to local and foreign exchange earnings as well as by encouraging foreign direct investment and boosting the country’s economy. Small-scale mining is held back by a number of constraints. It is important to identify these  in order develop efficient policies and strategies for its growth – which is the key to the overall development of mining in Nigeria.

This paper takes a look at small-scale mining in Nigeria, and then goes on to identify its constraints, before developing policies and strategies for its growth. A conclusion is reached and recommendations including the privatisation of the industry and a crack down on illegal mining, are made.

1. Introduction

Despite the mineral potential Nigeria possesses (proven reserves in 33 types of minerals in over 400 locations1), solid mineral exportation constitutes a mere 1% to its GDP2. This extremely low share is mainly due to Nigeria’s dependence on oil but also largely due to the underdeveloped mining sector, primarily resulting from inadequate and inefficient policies for mineral exploration development.

Over the past decade, the sector has been extensively reviewed, starting with the creation of a Federal Ministry of Solid Minerals Development in 1995. This was structured to offer a viable alternative to petroleum for foreign exchange earning as well as contributing to the country’s overall economic development.  Legislation guiding all mining activities in Nigeria was also reviewed giving rise to the Minerals and Mining Decree (MMD) of 1999.

Small-scale mining (SSM) is an important part of the Nigerian mining sector, which has the potential to raise internal revenue in addition to foreign exchange, create employment and encourage foreign direct investment (FDI) via government incentives. Developing Small-scale mining is crucial to the growth of the sector, given that it is easier to break through the economic constraints as a group of small-scale miners, than for one or two small-scale miners to take on the capital and technologically intensive projects on their own. SSM is a vital stepping stone for Nigeria to fully develop this potentially vibrant sector.

However, SSM in Nigeria is severely constrained, with most current small-scale mining practices unguided and unregulated. Policies in place are inadequate, and generally small scale miners are untrained and contribute hugely to environmental degradation, and poor quality operational techniques and the loss of minerals. Most activities have gone undocumented, resulting in loss of minerals and precious stones. This has caused substantial losses in revenue to the country by way of exports, as well as through royalties and taxes.

It will be impossible to consider mining and SSM in Nigeria without putting illegal mining in perspective. Over 95% of mining activities in Nigeria are artisanal and another 95% of these are illegal3 (this includes minerals such as Tourmaline, Cabochon, Limestone, Feldspar, Tantalite, Coal, etc.4). Illegal mining is a major drawback to the sector.

It is pertinent to identify the constraints to SSM in order to determine appropriate policies and strategies for its development, which are vital to the overall growth of the Nigerian mining industry. The object of this paper is to critically assess the constraints to small scale mining in Nigeria and the steps taken so far towards its development. The paper will also consider various policies and strategies for SSM crucial to development in Nigeria. Recommendations will be made as to implementing the policies in the short and long term.

Reference

Uzoka O., Chairman, House Committee on Solid Minerals, National Assembly, Nigeria, Interview with Thisday Newspapers. http://www.thisdayonline.com/archive/2001/08/26/200110826news12.html>

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