FG Assures Foreign Mining Investors Lower Production Costs

By Adedapo Adesanya

The Minister of Solid Minerals Development, Mr Dele Alake, has assured foreign investors of low production costs as they consider investing in the country’s mining sector.

Speaking at the Mines and Money Conference in London, Mr Alake said President Bola Tinubu has embarked on reforms to boost investment by streamlining procedures and reducing hurdles to attract foreign investors.

“The country’s geological bounty encompasses over 44 distinct mineral types, found in exploitable quantities across more than 500 locations,” the Minister said, according to a statement by his aide, Mr Kehinde Bamigbetan.

“Recently, recognizing the evolving global landscape and in response to emerging trends, Lithium has been included as a crucial strategic mineral of global consequence.

“Nigeria is currently emphasizing solid minerals beneficiation and value-addition as a panacea for quick and sustainable growth of the mining industry.

“By adding value to our raw materials, we not only create higher value products but also generate employment opportunities for our teeming youth and increase the sector’s overall profitability and contribution to the nation’s GDP,” he was quoted as saying.

He quoted a recent report by an audit firm, KPMG, the minister said mining’s contribution to Nigeria’s GDP rose from 0.3 per cent to 0.85 per cent in 2022, indicating 0.63 per cent year-on-year growth.

According to available data, as of 2021, the solid minerals sector to Nigeria’s GDP stood at 0.63 per cent. The performance was an improvement compared to previous years where it contributed 0.45 per cent in 2020 and 0.26 per cent in 2019.

Despite this relative improvement, the contributions of the industry to the nation’s economy are still negligible and disappointing considering its humongous potential.

The low output in the industry is because over 90 per cent of the activities of the mining industry are dominated by artisanal operators. The Muhammadu Buhari-led administration had set the target of increasing the output to 5 per cent by 2025.