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MINING AND THE CHALLENGE OF SMALL AND MEDIUM SCALE ENTERPRISES

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MINING AND THE CHALLENGE OF SMALL AND MEDIUM SCALE ENTERPRISES

MINING AND THE CHALLENGE OF SMALL AND MEDIUM

    SCALE ENTERPRISES DEVELOPMENT IN NIGERIA

    BEING THE TEXT OF A PAPER PRESENTED BY

    ALHAJI SANUSI MAIJAMA’A

    NATIONAL PRESIDENT

     NIGERIAN ASSOCIATION OF SMALL SCALE INDUSTRIALISTS

    {NASSI}

    AT THE INTERNATIONAL MINING INVESTMENT CONFERENCE /

    EXHIBITION ON NIGERIA (IMICON 2006)

    ORGANIZED BY MINERAL WATCH CONSULT LTD. IN COLLABORATION WITH

    ICTC INC. CANADA

HELD AT THE TRANSCORP HILTON HOTEL, ABUJA, NIGERIA,

    JUNE 13-15, 2006.

    MINING AND THE CHALLENGE OF SMALL AND MEDIUM

    SCALE ENTERPRISES DEVELOPMENT IN NIGERIA.

INTRODUCTION

There could be no better time to discuss the topic “Mining and the

    Challenge of Small and Medium Scale Enterprises Development in Nigeria” than now, in view of the emphasis of the Obasanjo Administration

    on increased productivity in the non-oil sector of the national economy.

    I, therefore, command the initiative of the organizers of this Conference / Exhibition, their foresightedness and patriotism forwards nation-buiilding and sustainable economic development. It is my hope that the objective of this deliberation will be achieved and the impart felt in greater dimension.

    Rather than dwell on definitions of “mining” and the key words of the above theme and topic, I would prefer to illustrate mining with and example of limestone / marble exploitation in relation to other numerous solid minerals in various parts of Nigeria: and the activities of the Raw Materials Research and Development Council as well as some guidelines (requirements) vis-à-vis “Entry into Mining Industry” issued by the Ministry of Solid

    Minerals Development. Thereafter , I shall highlight some Challenges of the small and Medium Scale Enterprises Development in Nigeria, and conclude by making some recommendations.

    Nature has, indeed, blessed Nigeria with abundant mineral deposits as well as human resources. There is every necessity to exploit and process the natural resources to serve the economic needs of the nation and export the surplus to earn foreign exchange.

THE ROLE OF GOVERNEMTN IN THE MINING INDUSTRY

    The Federal Government policy on Mining Minerals Deposits in the country is yet to be made available to small scale industrialists. Perhaps, some industrialists are aware of the contents but a considerable number of small scale industrialists have no knowledge of such policy. Information dissemination on Government policy and programme in that sector is vital in order to maximize the benefits of such activities.

    Nevertheless, one of the positive steps taken by the Federal Government was the establishment of the Raw Materials Research and Development Council. The major objectives of the Mineral Exploration and Development Programme of RMRDC aim at:

    - Stimulating interest and generating awareness in Solid Minerals.

    - Facilitating increase in the production of various mineral raw

    materials for industrial utilization.

    One of the methods through which the programme is being pursued is the production of Technical Briefs on each mineral in the country.

    The production of the briefs involves collection, collation and synthesis of available information on reserves, processing, market, etc on each mineral into a technical brief or handbook.

    The technical brief on, for example, limestone / marble, is reported to be the twelfth in the series. The brief outlines the sourcing, industrial uses and other available technical information in limestone / marble within the country.

    For general information, limestone is a sedimentary rock composed dominantly of carbonate minerals, principally carbonates of calcium and magnesium. Marble is the metamorphosed crystalline equivalent of the limestone.

    Limestone / Marble are carbonate rocks, dominated by the mineral calcite (CaCO3)

    They are extremely valuable industrial mineral raw materials. Construction and cement Manufacturing Industries are principal consumers. They are also used in the production of chemicals, fertilizer, abrasives, industrials fillers, glass, ceramics, etc.

    Limestone and marble occur throughout Nigeria in both basement rocks and in sedimentary basins. The eight cement plants in the country are located near quarries of suitable limestone or marble deposits. Limestone, marble and dolomite in Nigeria may be conveniently grouped into three classes on the basis of geological age, as follows:

    - Precambrian marble,

    - Cretaceous limestone; and

    - Tertiary limestone

    The Precambrian limestone, which has been re-crystallized to form marble, are confined within the schist belts of the western half of Nigeria, west of longitude 8 E. They contain variable amounts of mica, calcilicates and sometimes, small inclusions of gneiss, pegmatite and quartz as reaction products. These deposits are being used mainly for paladina crushed stone aggregate, and lime (Jakura Marble). The Ukpilla deposit in Edo state is presently being used for the manufacture of cement and calcium carbide. Other marble deposits are Igbetti, Oyo state; Ekinrin Adde, Kogi state; Ubo, Edo state; Itobe, Benue state etc. Five major marble deposits that are current being exploited in the schist belt area have an estimated reserve of about 150million tons. The lensoidal shape of these desposits suggest that many more occurrences may yet be discovered in the schist belts.

    The sedimentary limestone of cretaceous and tertiary ages are associated with shale, siltstone, and fine-grained sandstone. They are often hard, gray and shelly. The cretaceous varieties occur in a wide belt of territory which, extends from Calabar in the South south, through Agila, Igumala and Yandev in the Central Nigeria to Ashaka and Gombe in the northeast of the country.

    The tertiary beds sometimes contain limestone and inter-bedded marbles. Total estimated resources of these varieties are about 200 million tones. They occur in Shagamu, Ewekoro, and Sokoto where they are being exploited for cement manufacture.

    Most of the deposits being exploited by the cement industry have varied compositions, which range from about 81% CaCO3 in Sokoto to about 96% CaCO3 in Mfamosing. Dolomite (Mg.Ca) (CO3) values range from about 0.5% in the Mfamosing limestone to about 4.6% in the UKpilla marble. Except in a few cases, the contents of phosphates, sulphur and iron are in trace amounts only.

    Time constraint may not permit me to reproduce the tables showing some limestone and marble deposits/occurrence in the country as well as annual production figure for limestone/marble between 1994-1995 in Nigeria for the purpose of challenging small and medium scale industrialists. It suffices to state that the market potentials of limestone/marble in Nigeria is large.

    However, it should be mentioned that the supplies of these materials are far less than the demand. Ordinary Portland cement production in the country stands at 2.8million tons per annum, which is far less than 50% of the annual national demand.

    Also the supply of processed or granulated limestone/marble to relevant era-users has not met demand.

    In order to meet the demand, there is need for further investigation of various deposits so as to group them according to grades and specific industrial uses for which they are most suited. There is among investment opportunity in limestone/marble development and processing.

     INVITATION FOR THE EXPLOITATION OF IDENTIFIED

    LIVESTONE DEPOSITS IN NIGERIA

In view of the above observation by RMRDC in their

    Technical Brief on minerals in Nigeria limestone marble,

    November, 2001 the attention of stakeholders/investors in

    the mining industry is hereby invited to the uncompleted

    investigation and exploitation of the limestone deposit at

    Ohafia/Arochukwu, Abia State, Southeast of Nigeria, among

    others, which was reported as “Not yet quantified”.

Professor M. O. Ijere and Professor K. Mosto Onuoha,

    University of Nigeria, Nsuka, in 1980, pointed out that

    “preliminary studies conducted so far in parts of Imo State

    (now Abia State-Ohafia/Arochukwu LGAs) indicate a surface

    and subsurface abundance of two major limestone areas

    which are repeated from each other by coat-bearing

    formations. The areas concerned are covered by parts of the

    geological surveys of Nigeria (G.S.M) topographical sheets

    “Afikpo South East and South West Ikot Ekpene North East

    and North West”. The preliminary investigations reveal that

    the limestone deposit belong to at least four different

    formations. If may be important to note that the Ewekoro

    limestone quarried in Western Nigeria by the West African

Portland current CA. Ltd. has probably is equivalent in age

    and lithology in the above mentioned areas.

A large number of local outcrops belonging to the “Upper

    and Lower coal measures” has been found in these same

    areas. The geological succession is similar to that around

    Enugu where fire economically important coal seams occur.

    It seems that the various geological formations in the areas

    covered by the mentioned topographical shhets occupy the

    same position in relation to the Enugu escarpment.

There is therefore a need to conduct detailed geological and

    geophysical investigations in the areas covered by these

    topographical sheets. Such detailed investigations would

    buttress the preliminary results and should bring forth data

    of great economic important, the report concluded.

GUIDELINES ON “ENTRY INTO MINING INDUSTRY

    (REQUIREMENTS) BY MINISTRY OF SOLID MINERALS

    DEVELOPMENT

i. Copy of CV are copy of degree certificate of a Mining

    Engineer or a Mining Technologist or Geologist with

    requisite mining experience to be in charge of technical

    supervision.

    ii. Statement of Account of the company of not less than

    N3 million to show financial capability of the company. iii. Banker’s Guarantee to the tone of N1 million as

    prescribed on form “K” which serves as security from

    operator to pay adequate compensation to owner of the

    land to be disturbed.

    iv. Copy of certificate of incorporation of the company.

    v. Copy of true certificate copy of memorandum and

    Articles of Association duly stamped duty. vi. Copy of Evidence of civic responsibility inform of tax

    clearance certificate.

    vii. Evidence of payment of prescribed fee of N20,000.00

PROSPECTING RIGHT (PR) REQUIREMENTS

i. Report of proposed programme of prospecting which

    include detailed programme of progressive reclamation

    and rehabilitation of land to be disturbed.

ii. Copy of CV and a copy of Degree Certificate of a Mining

    Engineer or Mining Technologist or Geologist with

    requisite mining experience to be incharge of technical

    supervision.

    iii. Copy of letter of appointment of mining engineer or a

    geologist.

    iv. Copy of acceptance letter of appointment of Mining

    Engineer or Geologist.

    v. Evidence of application fees paid depending in the type

    of mineral(s).

? Precious metal, eg. Gold etc. N25,000.00

    ? Gemstones, eg. Sapphire etc. N25,000.00

    ? Metallic minerals, eg. Tatalite, etc N12,000.00 ? Non-metallic minerals, e.g. Baryte, etc. N10,000.00 ? Carbonaceous, e.g. coal, etc. N50,000.00 ? Lignite N25,000.00

EXCLUSIVE PROPECTING LICENCE (EPL)

    REQUIREMENTS

    i. Copy of current prospecting right license.

    ii. Report of proposed programme of prospecting including

    detailed programme of progressive reclamation and

    rehabilitation of card to be disturbed. iii. Favourable survey report from the office of the

    surveyor general of the state. iv. Favourable forestry report from the Ministry of

    Agriculture of the State.

    v. Administrative/Political report from the Chairman of the

    Local Government Area or any other authorized agency.

vi. Consert letter from the land owner.

    vii. Evidence of prescribed fee of N10,000.00 paid.

MINING LEASE (ML) REQUIREMENTS

    i. Submission of site plan

    ii. Report of proposed programme of prospecting including

    detailed of programme of progressive reclamation and

    rehabilitation of land to be disturbed. iii. Copy of company’s certificate of incorporation.

    iv. Copy of the company’s memorandum and Articles of

    Association.

    v. Copy of the prospecting plan of the area.

    vii. Copy of current prospecting right

    viii. Evidence of Prescribed fee of N10,00,00 paid.

QUARRYING LEASE (QLS) APPLICATION

    REQUIREMENTS

    i. Submission site plan.

    ii. Administrative, Forestry and Surveyor General Reparts

    of the area.

    iii. Company’s certificate of incorporation.

    iv. Copy of company’s Memorandum and Articles of

    Association.

    v. Consert letter from land owner.

    vi. Evidence of Prescribed fee of N10,000.00 paid.

QUARRYING LICENCE (QLC) APPLICATION

    REQUIREMENTS

    i. Evidence of Endorsement by the local authority to

    ensure paper acquisition of land. ii. Submission of the sketch plan of the area to the

    Federal mines Officer.

    iii. Evidence of prescribed fee of N5,000.00 paid.

CHALLENGE OF SMALL AND MEDUIM SCALE

    ENTERPRISES DEVELOPMENT

    It is obvious from the above account that entry of small and

    medium scale entrepreneur into the mining industry poses

    enormous challenge.

The project is not only capital intensive, the requirements

    demand very serious commitment determination and

    persistence on the part of the entrepreneur.

Some of the challenges that militate against the small and

    medium scale industrialists in pans-----mining projects

    include;

i. Lack of financial capacity as accessing loan through the

    bank is like a camel passing though the eye of a needs. ii. Lack of information on Government policy and

    opportunities that exist in the mining industry for small

    and medium scale industrialists. iii. Inadequate information on sources of obtaining mining

    equipment and other necessary imports as well as

    technical expertise/support.

    iv. Inadequate sensitization of the small and medium scale

    industrialists by Government Agencies on their

    activities and programmes that are relevant to their

    operations.

    v. Available research and development documentations

    not mobilized among small and medium entrepreneur.

RECOMMENDATION AND CONCLUSION

The need to ensure coordination, monitoring and evaluation

    in view of activities in mining ventures, it is hereby

    suggested that government should establish implementing

    Agencies on mining industry in order to ensure effective

    implementation of existing policies on mining and revision of

    the policy in line with present economic and industrialization

    realities. A natural Advisory Board and National Council on Mining in Nigeria are desirable and should be established; or strengthened to be all-embracing if any exist(s). The Boards should include representatives of the National Association of small scale industrialists Nigeria Association of Women Miners and other stakeholders in the mining industry.

    Considering the fact that grassroots miners have no access to funding, it is recommended that micro finance facilities should be extended to Mining cooperatives who have been constituted into clusters according to specific mineral sectors through the Nigeria Association of small scale industrialists (NASSI) as an umbrella organization, including the Nigerian Association of women miners, which also has women in mining cooperatives as members.

    There should be established, specifically, National Mining Fund and National Mining Financing Agency for obvious advantages in the accelerated development of the mining industry in Nigeria.

    In consideration of the high risks involved in mining ventures, Government should establish Mining Insurance and Re-Insurance Board in order to ensure the provision of Insurance Guarantee Scheme incentives to miners. Basically, the establishment of a National Mining Insurance Company is urgently required.

    In order to create wider markets for solid minerals, there should be public-private sector collaboration in organizing Exhibitions/Export promotions through trade fairs-National and International-with a view to exposing miners products to buyers.

    For the purpose of capacity building, there should be organized regularly workshops, seminars, skills Acquisition Training Programmes as well as sensitization and

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