A bill to establish Mineral Development Corporation (NMDC) has scaled second reading at the Senate.
The bill, which is aimed at investing and containing investments in the mining sector to promote mining, is sponsored by a former Nasarawa State governor, Tanko Al-makura (APC, Nasarawa South).
It was read for the first time in September 2020.
The bill scaled second reading on Tuesday after a lengthy debate by lawmakers.
In the lead debate, Mr Al-makura said the legislation was in line with the Buhari-led administration to diversify the Nigerian economy.
Next to agriculture, he said, the solid mineral sector had been identified as one with the potential to compete and eventually replace crude oil as a major source of foreign exchange earnings.
He said Nigeria was blessed with an abundance of solid minerals in five distinct classes, namely precious mineral/gemstones (ruby, emerald etc), metallic ores (lead, zinc, copper etc), construction minerals (laterite, granite, gravel, sand etc) and energy minerals (bitumen, coal and uranium among others).
He said these resources remained largely untapped and unexplored.
The lawmaker said the agency seeks to develop upstream exploration and production, midstream mineral processing and metallurgy and downstream logistics, trade and export which will catalyse investment in the entire mining value chain in Nigeria.
“It is expected that the establishment of the NMDC will urgently address the challenges of Internally Generated Revenue (IGR) currently facing state Government in Nigeria, as it would provide the much needed revenue to deliver on the administration’s priority areas of infrastructure development; social inclusion and poverty reduction, industrialisation and job creation for the citizens of Nigeria,” Mr Al-makura said.
Cost of setup
Successful setup and take off of the agency (including all initial capital and operating expenditure), he said, will require N5 billion.
“Initial funding shall be by way of a sovereign guarantee. The federal government would pay up its 70 per cent equity contribution and the institutional investor shall pay their respective equity participation to the corporation.
“Subsequent funding of the NMDC would be through the Nigerian Mineral Development Fund (NMDF) which will be managed by the corporation strictly in accordance with international best practices.”
The NMDC is proposed to be a state-owned Enterprise (SOE) with private sector participation and governance control as the vehicle for unbundling upstream and downstream commercial activities in the Nigerian solid mineral sector.
Key activities of the agency
Mr Al-makura said the activities and scope of the corporation would broadly cover the following areas:
* Mineral exploration activity for solid minerals located within Nigeria.
* Investment in mineral processing and metallurgical technology for identified and commercially viable minerals and metals in Nigeria.
* Creation (Management) of the Nigerian Mineral Development Fund (NMDF) which will be an independently managed fund set-up by the corporation as a channel for proper investment in the solid mineral sector.
* Creation of an active solid mineral exchange and all associated key enablers to provide a trading window for both individuals and institutional investors in the Nigerian Solid Mineral Sector.
* Ensure technology transfer and local content development in the Nigerian Solid Mineral Sector.
The commercial segment to be explored, according to the lawmaker, will focus on acquiring selected licenses for the seven priority minerals (Gold, Lead/Zinc, Iron Ore, Baryte, Limestone, Bitumen and Coal) through partnership agreements with state and local governments while sharing revenue with them in pre-agreed ratios.
Senators who contributed to the debate argued that Nigeria was losing billions of dollars daily to foreign miners who were taking advantage of the lack of agency to oversee solid mineral exploration and exploitation of the products.
Sani Musa (APC, Niger East), said the bill will give international miners the confidence to invest because they know that whatever they want to invest will be protected.
It will also help this country in generating employment for so many youth and reduce the security risk, he said, because the lack of this legislation gave rise to illegal miners who use their activities to fuel insecurity.
Binos Yaroe (APC, Adamawa South) said the legislation would promote and support the development of the solid minerals sector which will lead to diversification of the economy and less dependence on the petroleum sector.
“It will also lead to the creation of jobs. There is no part of this country that does not have one solid mineral or the other; so we need a coordinating body to drive the development of this sector,” he said.
Ike Ekweremadu (Enugu West), however, argued that despite the minerals in the country, nothing can be changed if the constitution is not amended to allow states to have access to these minerals.
The states, he alleged, are colluding with illegal miners to undermine the provisions of the constitution.
“Time has come to look at how we can further devolve powers to the states so that they can have access to the minerals in their respective territories. I support this bill but I believe there is a need for proper interrogation of the bill regarding the provisions of the constituents and other relevant law,” Mr Ekweremadu said.
After a voice vote, the bill was read for the second time and was referred to the Senate Committee on Solid Minerals for public hearing. The committee is to report back in four weeks.
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