WELCOME ADDRESS BY THE PRESIDENT OF NIGERIAN SOCIETY OF MINING ENGINEERS DELIVERED AT THE OPENING CEREMONY OF THE 23RD ANNUAL GENERAL MEETING AND INTERNATIONAL CONFERENCE HELD AT EDO STATE UNIVERSITY, UZAIRUE
Protocol
It is with great joy that I welcome you on behalf of the Council and members of the Nigerian Society of Mining Engineers (NSME) to the 23rd Annual General Meeting (AGM) and International Conference, tagged Edo 2024.
This is the first time that the NSME is holding its AGM and Conference in the South – South Zone since its inception in 1989. And where else to hold it in the South-South than Edo State, the Heart Beat of the Nation, that is massively endowed with marble deposits amongst other mineral resource endowment. We also considered the enabling environment being created for investors by His Excellency, Mr. Godwin Obaseki, the Governor of Edo State, that has resulted in several mineral production activities in the state led by BUA Cement Plc. We have great expectation that the conference will be very exciting in view of the various attractive activities lined up for participants during this four-day conference.
The theme of this Conference, “Nigeria’s Mineral Resources – A Source of Economic Recovery Employing Innovative Technology” along with various sub-themes, were carefully chosen to facilitate robust discussions on the development of the nation’s mineral endowment. It is hoped that the outcome of these discussions will help reposition the minerals and metals sector as a major GDP contributor, foreign exchange earner and catalyst of Nigeria’s industrialization.
Our Annual General Meetings and Conferences are focal point each year for NSME members and provide unique opportunities for our members and dignitaries to listen to thought leaders in the field of mining, who usually speak on the themes of our conferences. They also provide opportunities and professional settings for interaction among new and old colleagues, meeting new friends and discussing emerging trends and technologies which are critical for organizational productivity and efficiency improvement in the mining industry. This year’s conference would not be an exception as the theme and sub-themes of “EDO 2024” promise to facilitate robust discussion on the role of artificial intelligence (AI) amongst other emerging trends and technologies in mining.
Our Society
Nigerian Society Mining Engineers (NSME) is a volunteer professional organization founded in 1989 and incorporated in 1990 to amongst others, bring together all Mining Engineers, Mineral Process Engineers / Metallurgical and Materials Engineers, and Geological Engineers in Nigeria as members of the society; advance the science and practice of engineering in the fields of geology, mining, mineral processing, and extractive metallurgy; and represent to any Government the views of the society on any legislation or any other subject(s) of concern or interest to the society in Nigeria. The NSME is a Specialist Group of the Nigerian Mining and Geosciences Society and has its Secretariat along Barkin Ladi Road in Bukuru, Plateau State with over 1500 members covering four classes of membership.
The membership of the NSME comprising Mining Engineers, Mineral Process Engineers / Metallurgical and Materials Engineering as well as Geological Engineers, is better placed professionally than any other professional group to discuss issues bordering on effective mining and processing of the nation’s mineral resource endowment for the benefit of Nigerian economy. This is obvious, because our members are the principal actors in the exploitation of mineral resource endowment.
I am therefore not in doubt of the robustness of the conference outcome. I urge all participants to actively contribute to the discussion on making Nigeria’s mineral resource endowment a veritable source of Nigeria’s economic recovery.
Nigerian Minerals and Metals Industry
Distinguished members of the high table, ladies and gentlemen, please permit me to say one or two things under the following headings:
1. Innovative mining technologies
Measuring up in business or staying ahead in a rapidly evolving world can only be achieved by embracing technological advancements. Leveraging modern mining technologies have the power to transform mining, increase efficiency, reduce environmental impact and enhance safety measures among other benefits. The application of robotic technology and devices powered by Artificial Intelligence (AI) is gaining ground in performing a range of tasks in mining including drilling, blasting, loading, hauling, ore sampling, bolting mine roofs, rescuing trapped miners, etc. Similarly, the use of AI has eased generation of geosciences data through the use of AI-powered tools that can identify anomalies and potential mineral deposits that would have eluded traditional exploration methods. The emerging Internet of Things (IoT) is also enhancing mine safety and productivity.
It is pleasing to note that conscious efforts have been made by the Federal Government to use these technologies to fast-track geosciences data generation and monitor activities in the mining sector. The mining operators are encouraged to integrate these technologies in their operations in order to reap the inherent benefits associated with their usage. The use of these technologies in mineral exploration by Government and operators would not only facilitate the discovery of world class mineral deposits that are currently lacking in the country, but also facilitate the development of large-scale mines and processing plants as against the current artisanal and small scale operations that dominate the sector.
2. State Governments’ interference in the regulatory role of the Ministry of Solid Minerals Development
The pronouncement of many State Governments across the country banning mining in their states, in our opinion, is interference with the regulatory functions of the Federal Government which goes against the provision of the Constitution of the Federal Republic of Nigeria that places mining under the Exclusives List. These actions by the State Governments are severely disrupting mining operations in the country as operators are required to close their mining operations in these states or are subjected to other sets of regulatory guidelines enacted by these states in addition to the one established by the
Federal Government. Some of these operators have had their mining and mineral processing equipment vandalized, and in some cases, in connivance with security agencies, have been harassed and locked up including making them pay various sums of money as levies or fees. These actions of State Governments create chaos in the sector, make the sector unattractive to investors as well as giving the impression that these states want to control the mineral resources found in their states. This attitude of these State Governments would not allow the Nigerian minerals and mining sector to meaningfully contribute to the GDP, be a major foreign exchange earner or creator of jobs and wealth. The Honourable Minister of the Ministry of Solid Minerals Development is therefore called upon, as a matter of urgency, to arrest this trend of actions by the various State Governments as to not do so, will make current investors in the sector to divest from the sector and also discourage other prospective investors from investing in the sector. The Honourable Minister’s authority in the sector would also be eroded as licences and permits granted by his good offices would not be honoured in these states.
State Governments interested in participating in the exploitation of mineral resources should be encouraged to do so through the Special Purpose Vehicle window while participation in the administration of mineral exploration and exploitation activities can be done through Mineral Resources and Environmental Management Committee (MIREMCO) as provided by the Nigerian Minerals and Mining Act (NMMA), 2007 and its Regulations of 2011. Resolution of any thorny issues bordering mining activities in any State can be resolved through the National Council of Mining and Mineral Resources Development (NCMMRD). Undue interference in mining in anyway by the State Governments, apart from the stated organised or mutually agreed collaborations, does not benefit anyone. It is usually counterproductive and should be discouraged.
3. New Licencing Fees and Royalty Rates
The recent upward review of Licencing Fees and Royalties in the sector by the Ministry of Solid Minerals Development is an issue troubling mining operators as they consider the increase to be too high in the case of licencing fees while some of the royalty rates are not in tandem with the mineral commodity prices. While Government’s reasons for the review, which include removing speculation in the sector, are laudable, the current security situation in the country that has prevented mining operators from operating their mineral tenements make this very high increase of licencing fees very difficult to pay up. These new rates favour foreign investors who have cheap money obtained at almost zero interest rates as against Nigerian mining operators that obtain theirs at double digit interest rates. It is the right of Government to review licencing fees and royalties, however, in doing so, a balance should be maintained in line with the provision of Section 4 (e) of the Nigerian Minerals and Mining Act, 2007 which provides that the Honourable Minister should ensure that equitable balance is maintained between foreign and indigenous interest in the exploitation of Nigeria’s mineral resource endowment. The Honourable Minister is thus humbly requested to use his good offices to review these rates downwards so that indigenous mining operators are not driven out of business by these very high increases arising from their inability to pay up. Failure to pay up statutory fees results in revocation of mineral titles and loss of mineral deposits on which huge investments must have been made in the course of their discovery. This would result in massive loss of investments by
indigenous mining operators including job losses and wealth creation opportunities for a greater number of Nigerians.
4. Operations of Mining Marshals in curbing Illegal Mining
We commend Federal Government’s initiative of setting up of the Special Marshall on mining. It is a step in the right direction as it would help to curb illegal mining operations. There was Mine Police in the 60s and 70s that used to work with the staff of the Ministry. The new Special Marshall should also be made to work with the staff of the Ministry for effective administration and outcome. The fear of the Honourable Minister of noncooperation by the Federal Mines Officers should be dealt with administratively in line with Public Service Rule.
5. Implementation of value addition policy
Value addition is key to sustainable development of mining industry in Nigeria. We commend Government for enforcing the value addition policy envisaged in Section 68(f) of the Nigerian Minerals and Mining Act, 2007 and Regulations 135 and 136 of the Nigerian Minerals and Mining Regulations, 2011. The enforcement of local processing and refining of mined ore before exportation will ensure that mineral commodity exports from Nigeria attract premium value, enhance foreign exchange earnings and their conservation in addition to keeping jobs associated with value addition in Nigeria. It will also promote technology transfer and facilitate industrialization.
Energy requirement is a key factor in value addition especially value addition plants that involve crushing, grinding and metal extraction. The nation’s low level electricity power generation will require mining operators to establish their captive electricity power generating stations. This will increase the capital needed to establish the processing plants including the working capital requirement. In view of this challenge, it is recommended that the implementation of value addition be carried out in phases commencing with processing activities that lead to the production of mineral ore concentrates or production of mineral products that involve meeting size specification requirements such as industrial minerals and rocks processing.
Government should also permit the establishment of processing hubs as envisaged in Regulations 135 and 136 or joint establishment of processing plants / metal extracting plants to facilitate local extraction of metals from concentrates as was the case in the 60s and 70s when Makeri Smelting plant, Jos used to smelt tin ore concentrates produced in the country.
6. Provision of single digit interest rate funding for the mining sector
The double-digit interest rate being charged mining operators by the finance houses increase the cost of mining for indigenous miners that access this funding window, putting them in disadvantaged positions when compared with other mining investors that obtained their funds at single digit interest rates or near zero capital cost. Government is therefore called upon to allow the Solid Minerals Development Fund (SMDF) to take direct control of disbursing the N2.5B intervention fund meant to provide funding at single digit to mining operators but continues to remain inaccessible in the Bank of Industries. The
SMDF should be made to review the procedure for accessing it and make it more accessible to mining operators in line with the provisions of the law establishing it.
7. Professionalism in the Nigerian Minerals and Mining Sector
Mining is a knowledge-based industry that requires the services of professionals trained for the various operations carried out in the industry. The establishment of the Council of Nigerian Mining Engineers and Geoscientists (COMEG) has gone a long way in ensuring that various professionals of varied disciplines operating in the extraction industries are adequately trained by COMEG accredited institutions. The role of COMEG in ensuring that the right calibre of professionals graduate from these institutions and their subsequent registrations in the various cadres is of utmost importance. The challenges being faced by COMEG regarding funding of its operations would not allow it to effectively carry out this onerous mandate. We therefore urge the Honourable Minister to allow COMEG to obtain a part of its funding from SMDF in line with Section 34 (2)(a) which provides for SMDF funds to be utilized for the development of both human and physical capacity of the sector.
COMEG on its part, could do better by according all registered professional cadres the opportunity and recognition to practice as registered COMEG professionals by giving them the necessary instrument needed to practice as COMEG registered professionals.
8. Steel Development
We commend Government on it’s efforts at completing Ajaokuta Steel plant and operationalizing its completed units along with getting Itakpe Iron Ore Mining company ready to supply needed quantities of iron ore concentrates. We similarly commend private steel producers for their doggedness in remaining operational despite the harsh economic conditions. We urge Government to continue to support them, especially against steel product importation. We call on Government to increase import tariff on imported steel products to enable them compete with foreign steel producers amongst other support being given them.
Conclusion
Your Excellences, distinguished guests, Fellows, Members, ladies and gentlemen, on behalf of all participants, I welcome you once again to the 23rd AGM and Conference of Nigerian Society of Mining Engineers. It is indeed a unique Conference being organized at a time that the nation is in dire need of economic diversification of its revenue streams. I wish you fruitful deliberations and memorable EDO 2024.
Thank you and God bless you all.
Engr. Dr. Umar A. Hassan, ACSM, FNSME, FNMGS, FNMS, FNAEGE
President,
Nigerian Society of Mining Engineers