Fed, state govts collaboration ‘II create investments in mining sector

States must have a say in how investment in the mining sector can be conducted. But for this to happen, there must be a harmonized legal framework between the federal and state governments to create a robust climate for investment flow, report OBINNA NNOROM & AMBROSE NNAJI.

Collaboration between the federal and state governments will be beneficial to creating an investment climate. This synergy is inevitable because the mining communities are in the states and the mining sites are all in the states. In other words, there is no mining site that is located outside the states or local governments

To this extent, industry experts argue the states must have a say in how investment in the mining sector can be steered. Nevertheless, the Nigerian Minerals and Mining Act as presently constituted does not have enough provisions that allow direct investments from states without collaboration with the federal.

The Nigerian Minerals and Mining Act 2007 (“the Act”) was passed into law to repeal the Minerals and Mining Act, for the purposes of regulating the exploration and exploitation of solid materials in Nigeria.

The Act confers control of all properties and minerals in Nigeria in the State and prohibits unauthorised exploration or exploitation of minerals. All lands in which minerals have been found in commercial quantities shall from the commencement of the Act be acquired by the Federal Government in accordance with the Land Use Act. Property in mineral resources shall pass from the Government to the person by whom the mineral resources are lawfully won, upon their recovery in accordance with provisions of the Act among other things.

Director of Communications and Advocacy, Nigeria Extractive Industries Transparency Initiatives (NEITI), Dr. Orji Ogbonnaya Orji agreed it was the grey area the states and the federal government needed to urgently harmonize to make room for favourable investment flow.

Meanwhile, NEITI through the director of communications has urged both the federal, state and local governments to shift attention from oil and look at the solid mineral sector adding the potential in the solid mineral sector is huge. He recalled a roadmap had been developed by the Ministry of Mines and Steel Development which NEITI as an agency also made input. According to him, the roadmap looks very attractive to both investors, government and the general citizens adding what’s required is the political will and collaboration from all tiers of government to implement the roadmap.

“In the process of implementation if there are bottlenecks that needed to be amended as partners and collaborators in the process it would not be difficult to be done but except we engage in the process and reduce this tendency to think that oil will solve all our problems we will continue to make very little progress”, he insisted.

Ogbonnaya Orji who spoke with Nation Updateon telephone agreed noted the existing law invested ownership of mineral resources on the federal government however it didn’t say the states cannot participate in investing in mineral resources. According to him, it only requires the states to find a way to engage with the federal government and be able to leverage on the fact that the resources are in their domain.

He nonetheless recalled some states were already considering that. According to him, the government of Taraba State, has made references on how the state was looking at collaborating with the federal government. Again, at the last economic summit held by the South Western states they also made some decisions to discuss with the federal government on how it can cede some of its powers to enable the states come in to invest.

Ogbonnaya Orji solicited a way to look into that area adding it will be helpful. He argued for you to invest in mining and you go to the federal government and get your mining license, and yet you are still going to travel to the state where the minerals are located, insisting something must be done in terms of legislation to make for free and easy flow of investments.

“We are not saying the federal government should not control that. What we are saying is that the states should not think that because mining and mineral act are invested in the federal government they have no stake in it, they have, they can engage with the federal government and see how they can partner and collaborate to allow for free flow of investments in the sector”. Even states can invest in mining but they can’t do that in isolation without the federal ministry of mines and steel development, he stated.

On why this kind of collaboration is lacking between the two levels of government, Ogbonnaya Orji recalled it was also part of the ongoing campaign for us to look beyond oil. “When some states know that they can go to the federal government and get a share of the oil revenue why do they have to border to diversify their investment. As long as we continue to depend on oil and ignore to do something creative by looking elsewhere including solid minerals sector we will continue to have problems.”

“Because investment in mining is capital intensive and it does not yield money immediately it needs a gestation period before the money can start coming. But any state can take that bold step, that’s what we are emphasizing, diversification of the economy. It has to be a continuous investment in the mining sector from one administration in the state to another up to an effective period of time”.

“If you are investing in coal, gold mining it’s not something that you will put in money today and it starts coming/flowing. Sometimes you require investment in that sector up to 10 or 20years, and when the investment stabilizes generation to generation will reap from it”, he stressed.

It’s just the same culture of overdependence on oil, we don’t look elsewhere, there are states that can survive on other services, tourism, sports, etc. but for the fact that they are sure that every month allocations will come from oil why do they have to border”.

It’s to renew our call for concerted efforts to look into how states can invest in solid mineral sector. Two or more states or even as a zone can jointly raise fund and invest in the solid mineral sector in their states working in partnership and collaboration with the federal agencies. Such agencies include the mining cadastral office, the mining inspectorate division (MID), the federal mines and steel development, the geological survey they are all there to guide and provide all necessary leadership where necessary, but except you make that fundamental step nothing happens, he argued.

The survey conducted by NEITI shows that every state in the country has one form of mineral deposit or the other, it’s the apathy of the state and local government to seek ways and means they can partner with the federal government to leverage in all these, he added.

But in all these, it’s important we create the atmosphere that will attract investors. One of them is infrastructure, good roads, water, stable power supply and then security, when all these are in place it will become attractive to investors, he added

He however urged investors apart from discussing with the federal authority to see it as their they have the responsibility to make sure the states and the host communities had some form of ownership of the mineral resources they are investing in, if not you could have some problems, host communities will be happier if you carry them along, he insisted.

When a states looks at the law and there’s any aspect it feel is frustrating their participation then it’s the responsibility of that state to raise the issue, the federal government will look at it. “The first thing is to show interest, if there’s any aspect of the law that a state wants be amended all it needs to do is to get experts analyze it, give justifications on why they think that aspect of the law has to be amended and then also show the benefits amendment of that law can bring to the table so that both the federal and state will look more convinced”.

Whatever may be a constraint to one state may not be a constraint to the other state. “It’s peculiar, any state that finds any aspect of the law that creates a bottleneck that state has the responsibility to take the necessary steps to draw necessary attention in the aspect of the law” the most important thing is to engage the process, he added.

Matsai David Angye, Director, Solid Minerals Development Company, Taraba State, also called for synergy between the federal and state governments to move the sector forward.

“When the federal, states and local governments work hand in hand and synergize investments will come adding there are more to be discovered in the sector.

Angye while urging the federal government to address the issue of insecurity in the country noted mining was capital intensive and as such it needed a peaceful environment to operate. He also advised the government to consider giving the states or relevant organs in the states a free hand in the sector adding that there are some policies of government at the federal level that hinder investors coming in.

“If there’s a synergy, if there’s understanding between the federal and state governments it’s going to increase productivity and even the willingness. But by time you direct everything from the federal which most times the states are not even aware of what’s happening, when they come to the states it’s not what they see on ground, they will always have stiff confrontation with the states”.

“But by the time there’s an understanding in the policy that favours the state, and the locals we will go hand in hand, that’s the clause the sates don’t find comfortable, all over the states of the federation we don’t find that exclusive right comfortable, the states should have a say”, he insisted.