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Artisanal Miners Dominate Mining Sector As Nigeria Earned Paltry N52bn In 2017

Artisanal mining

Despite its huge potentials, the solid minerals sector contributed a paltry N52.75 billion to the federation revenue in 2017, a new report released Sunday by the Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed.

The report from an independent audit of the nation’s solid minerals sector for the year 2017, affirmed that artisanal and small-scale miners currently dominate the sector, leaving it to contribute a mere 0.3percent of Nigeria’s total employment in 2017.

On contribution to exports, the NEITI report stated that about 16.34million metric tons of minerals valued at $29.90million was exported in 2017.  While Nigeria’s total export was about N13.60trillion in 2017, the solid minerals sector contributed only N77.23billion or 0.57percent of total export in that year.

The report further showed that while the gross revenues that accrued to the federation account from both oil and non-oil sources for the year 2017 stood at N7.35 trillion, revenues from the solid minerals sector represented only about 0.05percent.

The report also highlighted that the sector’s contribution to GDP was an abysmal 0.11percent, which showed a decline of 0.01percent and 0.02percent from the data of 0.12percent in 2015, and 0.13percent in 2016.

An open pit mine

However, the report showed that the N52.75 billion earned by the federation in 2017, was a 21percent increase on the N43.22 billion contributed by the sector in 2016.

The information and data followed an independent reconciliation of company payments and government receipts in the sector by the NEITI) in its latest report released in Abuja.

From the sector’s total revenue contribution of N52.75billion, payments to the Federal Inland Revenue Service (FIRS) accounted for N49.162 billion which is about 93percent of the total revenues realized, payments to the Mines Inspectorate Department (MID) and Mining Cadastre Office (MCO) amounted to N1.59billion and N2.08billion or about 3percent and 4percent respectively, of the total revenue from the sector.

On production, the NEITI Solid Minerals Report disclosed that 35.33 million metric tons of minerals valued at N32.78 billion was produced in Nigeria during the period under review. “The production data was based on minerals either used or sold during the year,” the report noted.

A breakdown of the production showed that Limestone, Granite and Laterite accounted for 85.72percent of the total minerals produced with Limestone alone contributing about 55percent of the production volumes. However, in value terms, Granite and Limestone contributed 37.28percent and 35.57percent respectively.

Granite

On state-by-state contribution, the report highlighted that Ogun State produced the highest quantity of minerals in terms of both volume and value, accounting for over one-third of total production quantity and 23percent of the total minerals production value. It showed that contributions by Ogun and Kogi states put together accounted for over half of the total production quantity.

A further review of minerals production by states also shows that with the exception of the Federal Capital Territory, there was a material decline in states production in terms of both quantity and value. Total production quantity decreased from 41.87million metric tons valued at N34.09billion in 2016 to 35.33 million metric tons valued at N32.78billion in 2017.

The report also revealed that Dangote Cement dominated activities in minerals production in 2017 accounting for about 46percent of the total minerals production.  Other big players in the sector included Lafarge Cement Plc., CGC Nigeria Limited and Julius Berger Plc.  “The four companies produced over 27 million tons of minerals, representing 77.31percent of the total minerals production quantity and over 60percent of the production value”, the report remarked.

According to the report, China was the major destination of Nigeria’s export during the year under review, accounting for 68percent of the total export value during the year. Other destinations are Malaysia, Vietnam and India.

On payouts to the federating units from solid minerals revenue, NEITI stated that the last distribution of solid minerals accumulated royalties occurred in July 2016, when the sum of N9.92 billion was distributed by FAAC. “The accumulated balance in the account as at December 31, 2017, was N8.54 billion. However, as of April 30, 2019, the accumulated balance in the account increased by 66.4percent to N14.21 billion,” NEITI explained.

 

 

 

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