Governors, bad policies sabotaging efforts to revive mining sector- Ayanleke, President, Miners Association.  

 

The Mining Association of Nigeria has raised the alarm over recent draconian laws and practices being adopted by some state governments to impede the operations of mining companies. The group warns that such practices can undermine Federal Government efforts to revive the solid minerals sector pointing out that the laws will scare away rather than attract foreign and local investors to the industry.

 

The National President of the association, Chief Dele Ayanleke in this interview with Cyril Mbah in Abuja highlighted areas of concern and states how the governors are driving investors away and killing the solid minerals sector with bad policies. He also spoke of the urgent need to stop, before it is too late, state governments that are trying to derail the plans to revive the sector . Excerpts.

 

Kindly introduce yourself sir and tell us what you think about the endless problems in the solid minerals and mining sectors in Nigeria especially the fact that many people believe the mining sector is causing or fueling terrorism in the country. Do you agree with that?

My name is Dele Ayanleke. I am the National President of the Miners Association of Nigeria. I do not agree that the mining sector is causing or fueling terrorism in the country and I say that from a patriotic concern. What makes people to have that misconception is because of the fact that mining takes place in very remote locations which serve as hideouts for some criminals. For example before now, we were having all kinds of criminalities going on all over the place. Some of them were even happening in the towns. When we had the issue of insurgency in the Niger Delta, they did not say it was because of the oil exploration going on there. So, the connection between mining and banditry is because mining mostly takes place in remote places and these remote places act as hideouts for some of the criminals.

I agree that mining may somehow have contributed to the problem because the bandits may have considered that it can serve like an incentive to them, if they are perpetrating their criminal activities and are still able to get some means of livelihood around those remote locations through mining. I think that is what is actually encouraging them to stay at the mining corridor. But in reality, the criminals are everywhere not only mining areas.

 

 

Before now mining activity was not regulated. How would you assess what was there before and what is there now under the present regime? Is government really policing the mining sector properly now?

Well, let me say that there are three mining stages or just something like that. During the colonial era up to the First Republic, mining was well regulated because most of the mining activities then were carried out by expatriates and government was also generating a lot of revenue from mining. This was happening before the discovery of crude oil and the government was getting a lot of money from solid minerals. At a point, the government used the mining sector as guarantee or collateral to obtain foreign loans for the country but immediately after the discovery of crude oil, mining was abandoned and you know when you abandon anything, it is open to abuse and mishandling. If you abandon your clothes in the wardrobe for too long anything can happen to them. So, the various governments abandoned mining and the indigenisation decree also sent away some of the expatriates from the mining sector. So, it became an all-comers affair and there were no more serious mining companies operating in the sector and the field was left open for artisanal miners and scavengers now called Illegal miners.

But let me just say that you cannot call somebody illegal if there is no law there prohibiting an operation. There is no illegality if you leave things free for all. You cannot call them illegal miners as at that time because you are the one who left the field for them but they were scavenging and doing a lot of profitable things there. Now that the present government is focusing attention on the industry, it is becoming a bit more regulated. The only issue we are having around it is that we are not seeing proper steamlining. There is no clear-cut streamlining of regulations. Instead, there are a lot of multiple layers of regulations going on now and that also is not so good for the industry.

Government said they are reorganizing the mining sector. But from the background, we realized that your association is not being carried along properly. To what extent do you think government can succeed on it’s reforms without carrying your association along?

This issue also needs some better clarifications. It is not totally correct to say that we are not being carried along. Take for example, the present regulatory structures. When government was formulating the policies around it, we were carried along. We were part of the 2005 Minerals and Metals Policy and that was what gave birth to the Nigerian Minerals Regulation of 2007. It also gave birth to a lot of other policy initiatives in the sector, like the Minerals Regulation of 2011 and the 2016 Mineral Roadmap. So, we were all part of it.They actually carried the association along.

What exactly within the mining sector would you like to be changed for better performance of the industry?

We would like some of the policy initiatives to be changed. You are aware that recently the mineral rates and annual service fees were increased. We were not carried along very well in that area because our inputs have not been allowed to stay or to reflect and talking also about what we would like to see changed, we would like to see a situation where regulations can be streamlined to avoid multiple taxation.

Presently, anything about natural resources, whether liquid or solid,  are in the exclusive legislative list and not in the concurrent list but what we have observed going on is that almost every state governor is now setting up their own regulatory structures, setting up frameworks and coming up with executive orders to control an economic sector that is under the overview of the Federal Government.

The case with Zamfara State is a bit mild and a special case. What happened in Zamfara is because of insecurity but look at what is happening in Taraba State and other states.

Taraba State set up a task force which burned down many mining equipments, burned down many mining sites without compensation. Another one happened just a week ago when Osun State Government sealed off the premises of Segilola

Resources Operating Limited and that is the flagship of this mining industry in Nigeria because Segilola is the only company that has gone outside the country to seek for funds and what Osun State Government did makes nonsense of the minister’s advocacy all over the world. The Minister of Solid Minerals (Henry Dele Alake) has invited foreign investors to come and invest in Nigeria. So, if a company has gone outside to seek for foreign funds to operate and the state government is now sealing off the premises, what does that portend for the industry? That is divestment and that is a signal to those the minister has invited that Nigeria is not a safe ground or a safe place for any investment to work. We want this to change. What we actually want now is that if the law will need to be reviewed, let it be done to favour everyone but the fact remains that the present law has a lot of provisions where state governments can have a say in the affairs and regulations of solid minerals.

There is a committee called Mineral Resources and Environmental Management Committee. Every state has a member in this committee and most of the members, about 80 percent of the members of the committee, have their officers in the states and they are recommended and nominated by the state governments.  So, why are they setting up other structures that are not known to our laws?

So, this is what we want to change in the sector because this one brings a lot of multiple regulations, it brings along multiple taxations and all other kinds of revenue collection every year that will cripple the sector.

What would you advise the Federal Government to do in this respect because maybe the minister does not know about this yet?

I think the Minister of Solid Minerals knows about it and we have advised the minister on several occasions to take the governors to the National Economy Council meetings. The economic council controls the economy and regulates the economy.  Every state governor is a member of the economic council. I think they should be asked some very relevant, thought provoking questions. Number one, like it was done now in Osun State or in Niger State, if any of the oil producing state governments seal up any operating oil company, what happens to the revenue the states are coming to collect every month in Abuja because the major source of our nation’s revenue is from oil and gas.

So, if the oil and gas host states have been doing the same thing to the oil companies operating in their domains, what would have happened to this commonwealth that states come to Abuja every month to collect or share. These are the things to be clarified. I think the leaders are aware of the implications and even though the present government wants us to go back to resource control by the different sub-national entities, I think we should go about it systematically and not in this kind of experimental manner or through this political  experiment.

Chinese nationals and even Indians are coming into Nigeria in droves and exploiting our resources using Nigerian connections. What should be done to control these people?

There are some policies that the government needs to look at and review to check the type of exploitation now going on in the solid minerals sector. It should look at the policies that grants complete ownership of mining assets, 100% ownership of mining assets, to foreigners. We need to review that policy. Whenever the foreigners are coming, they should be directed to partner with indigenous miners and operators. This is because the foreigners come with sophisticated equipment, financial resources and the support of their home governments. Their governments give them operating capital. They even give them cheap labour. We (local miners) cannot compete with them because they have a lot of money which can be used to compromise our local communities, send away the indigenous operators, bribe or induce the traditional rulers and the communities by giving them money and some other things of their pleasure.

So, these are the issues. But if the law does not permit them to have 100% ownership of mining assets, if they are partnering with the locals or the indigenous operators and Nigerian investors, definitely all the kinds of things they are doing will not happen. See the quality of minerals they are taking away, they are just exploiting us 100%, without any value being added to this country. They export our minerals away and are creating employment, and wealth in other nations with our own endowments.