| |
The World Bank with all it's meticulous vetting
and assessment of its programmes and projects in developing
countries, has, unabashedly, praised Nigeria's shot at a
mining renaissance three decades after the demise of the
sector. But, the commendation was largely anchored on what
the bank regards as the prudent and judicious use of a $120
million grant it had extended to Nigeria as an incentive to
resuscitating Nigeria's solid minerals sector.
The grant is known as the Sustainable Management of Mineral
Resource Project.
This was contained in a mid-term review of the World Bank
credit to Nigeria, last week, conducted by Craig Andrews,
World Bank Chief in Nigeria, who was leader of the team, and
Alexandra Pugachevsky, Operations Officer of the Oil, Gas,
Mining and Chemical department of the World Bank, among
others.
The report was based on a survey of the project carried by
an independent consultant of the World Bank
The report reads in part: “The project has made very
significant progress towards achieving its development
objectives. This includes the on-going airborne geophysical
work, inauguration of the newly rehabilitated Central
Ministry office at Wuse II, Abuja, continuing rehabilitation
work on the zonal offices and the anticipated commencement
of geo-chemical mapping studies of Nigeria”.
The report added that “excellent progress has been made on
the Nigerian Institute of Mining and Geosciences Jos,
Plateau State, commissioning of the mining community
outreach centre in Jos and a follow-up on various studies of
small scale and artisinal mining sector”.
Indeed, the rejuvenation of mining into a tangible economic
activity in Nigeria largely lies in the hands of small scale
and artisinal miners, whose total number, according to a
recent survey, may well be practised by two million
Nigerians.
But, their activities are haphazard, uncoordinated and
destructive to the environment with no reclamation and add
almost zero value to the central economy, as there has been
no way of regulating them.
The Sustainable Management of Mineral Resource Project looks
at this challenge as one of its key area of focus.
To the this end, the World Bank Mid-Term review reports that
“the project, over the last several months, has laid an
excellent foundation to deliver technical support to the
artisinal and small scale miners”.
As a result of several roadshows held by the Mines and Steel
Ministry through the Sustainable Mineral Development Project
office, small scale and artisanal miners were enlightened of
the new Mining Act, the formation of a Mining Cadastal
office and about a $10 million grant set aside to helping
them to improve their output in a coordinated and regulated
manner.
So far, not less than 400 mining co-operatives have been
formed, all aimed at securing the $10 million grants. A
workshop was organised for them in Jos last June so they
could be taught how to draw from the grant.
It is believed that, when this category of miners get to
work, according to the new mining regulation, blue chips
mining firms would easily be wooed to bring in the big
capital.
It could be recalled that the World Bank had granted Nigeria
a credit line of $120 million for the development of the
solid minerals sector in 2004. The negotiations took place
on November 11, 2004, and the World Bank’s Board gave its
approval on December 14, 2004. On January 24, 2005, Nigeria
and the World Bank signed the credit.
The $120m credit has a 30-year repayment term with a 0.75
percent commission charged.
But the Federal Government, according to the agreement, is
expected to put in $7 million as counterpart funding, which
sadly, till date, it has not.
The entire project lifespan is four years. The project was
designed into four components for maximum impact within the
stipulated time. And the parts are: the development and
livelihood diversification for artisanal and small scale
mining areas; strengthening governance and transparency in
mining; private sector development and, finally, project
coordination and management.
While the project was moving on smoothly, the coming of
Professor Lesley Obiora, in 2006, led to a disruption of the
project for several months. At a time, the World Bank even
wrote the Federal Government about its intention to cancel
the grant.
However, when Obiora was replaced by Alhaji Bala Borodo, as
Minister of Mines and Steel Development, Borodo made
concerted efforts to convince the World Bank about Nigeria’s
dire need of the project.
Because of this setback, the World Bank, in its review,
recommended that, instead of the earlier stipulated June
2009 deadline, the project should now be extended by 18
months to December 31, 2010.
According to the world apex bank, the performance of the
project was suspended for approximately six months in 2006
to 2007 and that additional changes in mining ministers
prior to and during elections period delayed implementation
of the project. These delays, the Bank noted, were
independent of the control of the project management team.
Giving further reasons for the extension, the World Bank
said that, if the second development objectives must be met,
extensive work with artisanal miners and small scale miners
is required, in spite of the significant achievements made.
The review session began with a meeting between the Minister
of Mines and Steel Development, Chief Sarafa Isola, and the
World Bank team. Isola had earlier requested the World Bank
to extend the credit for two more years with a termination
deadline to coincide with the tenure of President Umaru
Yar’Adua’s administration.
According to him, this will enable the project consolidate a
solid foundation for the sector and attract the much-desired
mining multi-nationals
The Minister agreed that the project had recorded
significant achievements in the sector and promised that
more outstanding achievements would be realised before the
expiration of the deadline.
The Director of the Sustainable Management of Mineral
Resources Project office, Mr Linus Adie, who was at the
meeting, told the gathering that “this is the largest World
Bank mining project, not only in Africa, but in the whole
world. It came immediately after the Extractive Industry
Review of the country”.
According to him, the 0.75 percent credit tied to the grant
spread over 30 years repayment period, means it would be of
very little burden to repay.
Recently, at a larger meeting of stakeholders, Craig Andrews
advised Nigerian miners to take advantage of the steadily
raising prices of commodities in the world market.
The World Bank Chief said that in the last four years, an
unprecedented rise in the prices of every mineral commodity
has been recorded to inspire a flurry of serious exploration
of minerals in Nigeria.
“Two years ago”, he noted, “the price of an ounce of gold
was under $500, but today, it is under $1000, doubling the
price in 24 months. The price of a pound of copper was
$1.58, but today, that same pound of copper is $3.87.”
Industry watchers believe that Nigeria is making steady
progress towards revamping the mining sector. All that is
needed is a transparent running and regulation of the sector
and the development of basic infrastructure that encourage
big time miners to come in.
|
