The commercial value of Nigeria’s solid minerals has been estimated to run into hundreds of trillions of dollars. It has also been estimated that Nigeria loses about $40 billion annually in unexploited gold alone. The domestic mining industry is underdeveloped, currently accounting for only 0.5 percent of Nigeria’s GDP, and leading to the importation of commodities that can be produced locally.
An audit report released by the Nigeria Extractive Industries Transparency Initiative (NEITI) on the solid minerals sector, showed that a single company, Dangote Group, generates more mineral resource revenue for the government than the rest of the nation put together.
With the global decline in oil prices, Nigeria is seeking to diversify its economy by building a stronger revenue base that would require a stronger performance of the solid minerals sector.
Solid Minerals in Nigeria
Solid mineral deposits are scattered all over Nigeria. They include:
- Lead-zinc Ores
- Sodium chloride
- Silica sand
- Gemstone (Tourmaline, Aquamarine and Sapphire)
- Cooking coal
- Iron ore
- Copper ore
Nasarawa State in the North has been described as Nigeria’s home of solid minerals as it is endowed with a large number of solid mineral deposits
Mineral Prospecting and Mining
Although Nigeria is blessed with an abundant amount of diverse mineral resources, not all the minerals are available in commercial quantities. As part of the strategies to reform the sector, the Ministry of Solid Minerals Development (MSMD) has identified seven strategic minerals, namely: Coal, Bitumen, Limestone, Iron Ore, Barites, Gold and Lead/Zinc for priority development.
Coal: Nigerian coal has been found suitable for boiler fuel, production of high caloric gas, domestic heating, briquettes, formed coke and the manufacture of a wide range of chemicals including waxes, resins, adhesives and dyes. Coal can be found in the central, middle-east and south east regions of the country (Anambra, Kogi, Benue and Enugu States). A reasonable estimate in these regions is put at a total of 396 million metric tons, while the unproven reserves are estimated to be in the region of 1,134 million tons.
Bitumen: In Nigeria, bitumen typically occurs both on the surface and sub-surface. The estimated probable reserves of bitumen in Ondo State (south-west region of Nigeria) are 16 billion barrels, while that of tar sands and heavy oil is estimated at 42 billion barrels. The probable reserve of bitumen and heavy oil in the entire tar sand belt is expected to double the reserves in Ondo State. The bitumen belt has been marked out into six blocks with an average of 600 square km each, four of which have been sold to investors. The remaining two blocks are to be placed for bidding in future. Currently, the bitumen used in Nigeria is processed from imported heavy crudes, in addition to bitumen imported to supplement local consumption. Heavy and extra heavy crude can be extracted from Nigerian tar sands, and sulphur and phenol can be derived from these crude grades. They are also suitable for production of lubricants for plain and roller bearings.
Limestone: The largest and purest deposits of lime stone are found in the south-west and middle belt regions of the country. Limestone in the south west region of Nigeria has been estimated at 31 million tones. Most limestone mining activities are mainly for cement production. Rich ore constitutes more than 4.5% of the total reserves with medium grades estimated at 85.4% and lean ore at 13.1%. Although Nigeria has about 52 mineral resources across the country, limestone is estimated to be responsible for about 52 percent of solid mineral production. This is as a result of the thriving cement manufacturing industry in Nigeria.
Barites: In a survey carried out by the Nigerian Geological Survey Agency, proven reserves for
Benue and Nasarawa States (central region of Nigeria) have been estimated at 111,000 tons while the estimated probable (unproven) reserves across the country, where mining is considered viable, is estimated at 21,123,913 metric tons. Barite is suitable for glass, paint, and paper making. Also, it is used in petroleum well drilling.
Lead-Zinc: Lead-Zinc ores are usually found together. They are often associated with copper and silver. Lead-Zinc is found in the northeast and southwest. They occur in commercial quantities in the northeast and central region of Nigeria. The estimated reserve is well over 100,000 tons of lead and 80,000 tons of zinc. Lead-zinc ores are used in the production of batteries, electrical cables, solders glass and even protective coatings for other metals.
Gold: Gold is associated with the northwest, central and southwest regions of Nigeria, although there are smaller occurrences beyond these major areas. The preliminary exploration and identification of deposits which is still ongoing has confirmed ten sites to be holding reserves of over 50,000 ounces of high quality gold. Till date, over 30 licenses have been issued to co-operative societies and companies for mining of gold in the country. Most of the concessions are still at the exploration stage.
There are a great number of investment opportunities in the processing of solid minerals in Nigeria. The lack of processing facilities in Nigeria is a situation that can be leveraged on by investors.
Equipment Sales and Rental
As the mining industry in Nigeria is a growth industry, there is going to be an increased demand for the requisite equipment. There are currently very few players in this space, and this presents an opportunity to investors.
Mineral Ore Sales
There is a ready local and international market for mineral ores. The international market is mostly controlled by China, and can yield high profits for an investor.
There are also opportunities for professionals that have acquired expertise in the mining industry. Services like geological survey, preparation of feasibility study, securing mining sites and license, equipment procurement, securing export contract, among others, can be rendered in the industry. There are also opportunities for business consulting or advisory services.
Source: Nigeria Investment Promotion Commission
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