by Adewale Sanyaolu
Acting President Yemi Osinbajo, declaration last year, on Nigeria having the 12th largest iron ore deposit in the world and the second largest in Africa, with about 70 per cent of Nigeria’s deposits yet to be proven has raised quite some concern within the business community.
Osinbajo, had raised hopes when he said the Federal Government was looking at options for solving the challenge of developing the sector, including mobilising government capacity and private sector competencies to certify existing deposits.
“Because steel is the world most important engineering material, Buhari’s presidency is determined to bring about a faster industrialisation process in the country through the active development of the sector,” he said.
With about 2 billion metric tonnes of iron ore reserves, Osinbajo said Nigeria must be extremely ambitious in its industrialisation efforts, adding that never in its history has the need to increase investment in Nigeria been more crucial than now.
He said steel plays an important role in the present administration’s economic agenda, adding that as part of efforts to make the country a net exporter of steel, President Muhammadu Buhari, had directed that everything be done to ensure that Nigeria progressed in the Ease of Doing Business ranking this year.
He disclosed that the Federal Government was working on the right macro-economic policies to attract investors.
Foreigners feast on Nigeria’s iron ore
The announcement in 2012, by Australian explorer, Dr. Ian Burston, Chairman of Energio of the discovery of huge Iron Ore deposits in Kogi State, should be an eye opener to Nigeria and investors considering the options of starching funds abroad or wanting to import products from other economies to look inwards
According to the company, the discovery of 488 million tons in its 100 percent-owned Igbaja Project, represents 9.2 percent of the company’s 151km2 landholding for Iron.
In a statement by Energio, the discovery was the first ever JORC Iron Ore resources discovery in Nigeria and is bound to change the pace of iron ore development in mineral rich West African country.Indeed, the Austrialian Stock Exchange -listed firm informed the Australian Securities that the resources update on the Agbaja project, would be released.
Energio further explained that with improved geological confidence the entire resources potentials of the project would have been classified by June 2013.
Expert speaks on state of industry
An expert in mineral resources exploration and development, Mr. Jerry Solomon, equally expressed optimism that iron ore mining will industrialise the economy.
But, to move the sector forward, he urged the government and investors to consider massive exploration and exploitation of the abundant iron mineral in the country.
“Iron ores of diverse origin and quality are found in Nigeria with the purest and largest reserve found in Itakpe, Kogi State, where proven Iron Ore reserves are in excess of 200 million tons, grading in ferrous (Fe) content from 25 – 50 percent and could be up to 70 percent.
The true reserve of the deposit is yet to be quantified. In addition to Itakpe deposit, large reserves of sedimentary iron ore are exposed at Agbaja area in Kogi State, holding excess of 30.5 million tons of iron with an average assays of 50 per cent Fe (high of 85 per cent Fe) and economic percentage of phosphorous and alumina that can be processed as by-products.
It is very sad that previous administrations in Nigeria chose to spend well over N1.0 trillion annually on iron importations and ignored the huge economic gains that associate with iron mining and processing locally,’’.
Solomon who is a principal ge-ologist at Orbitwaves Geosciences, based in Toronto, Canada, said iron ore mining alone could massive-ly provide infrastructural develop-ment in the country and generates huge revenue and adds value to the economy if properly operated.
President of Miners’ Empowerment Association of Nigeria, Mr. Sunny Ekosin, disclosed that Nigeria loses a whopping N8 trillion annually in unexploited gold alone. He also said that Ajaokuta remains the key to Nigeria’s industrialisation and that getting it back to work is a matter of patriotism for President Muhammadu Buhari and his team.
Dissecting Iron Ore
There are over 3 billion tones of iron ore found in kogi, Enugu, Niger, Zamfara and Kaduna States. Iron is currently being mined at Itakpe (Kogi State), which is more or less at the center of the region of crystalline iron deposits.
The large deposit of oolitic iron ores of Kogi and Enugu States are yet to be fully explored. Itakpe iron ore is being beneficiated to 67 percent Fe to feed Aladja and Ajaokuta Steel complexes.
Besides there are three in-land rolling mills at Oshogbo, Jos and Katsina in addition to some privately owned rolling mills in Lagos and Kano.
Iron (Fe) is one of the most abundant rock-forming elements, constituting about 5 percent of the Earth’s crust. It is the fourth most abundant element after oxygen, silicon and aluminium and, after aluminium, the most abundant and widely distributed metal.
Iron ores are rocks from which metallic iron can be economically extracted. These rocks are usually found in the form of hematite (Fe2O3) or magnetite (Fe3O4). About 98 percent of world iron ore production is used to make iron in the form of steel. Although iron in cast form has many specific uses; ( pipes, fittings, and engine blocks. Its main use is to make steel.
Steel is the most useful metal known being used 20 times more than all other metals put together. Steel is strong, durable and extremely versatile. The many different kinds of steel consist almost entirely of iron with the addition of small amounts of carbon (usually less than 1 percent) and of other metals to form different alloys; stainless steel.
Pure iron is quite soft, but adding a small amount of carbon makes it significantly harder and stronger. Most of the additional elements in steel are added deliberately in the steel making process; chromium, manganese, nickel, molybdenum. By changing the proportions of these additional elements, it is possible to make steel suitable for a great variety of uses. There are over 3billion tones of iron ore found in Kogi, Enugu, Niger, Zamfara, and Kaduna States.
Approval/Regulation for iron ore mining
The recognized regulator for all mining activities in the country is the Nigerian Mining Cadastre Office, an agency under the supervision of the Ministry of Solid Minerals.
Information relating to approval procedure, classes of mining, levies and fess and all forms of documentation required could be gotten on the Cadastre office website; www.miningcadastre.gov.ng
NEITI audit report shows neglect
According to the Minister of Solid Minerals, Mr. Kayode Fayemi, 619 entities made payments to the government in 2013 but the 2013 solid minerals audit reconciled payments by only 65 entities (63 companies and two buying centres) that made payments of N2 million and above. These 65 entities (10.5 per cent of 619) accounted for 90.49 per cent of the total payments for 2013 and six government agencies were covered by the audit.
Total production across the solid minerals sector increased to 46,280,996 tonnes in 2013 as against 37,808,063 tonnes in 2012. The 19 per cent increase was attributed to a 33 per cent rise in limestone production from 18 million tonnes in 2012 to 24 million tonnes in 2013. Also, solid minerals sector accounted for an average of 0.09 per cent of total export earnings for 2013 compared to 0.02 per cent for 2012, with lead ores accounting for over 50 per cent of the value of all solid minerals sector exports for 2013.
Low revenue flows to government
The NEITI report espoused further that a meagre N33.86 billion accrued to the Federation Account from solid minerals sector in 2013. Out of this, payments from cement manufacturing companies accounted for N30.47 billion (89.98 per cent); construction companies, N1.98 billion (5.83 per cent); mining and quarrying companies, N1.42 billion (4.19 per cent).