The Oasis Reporters
July 22, 2017
On Tuesday, July 18, 2017, it was publicly announced, and published, that the Federal Government of Nigeria, through the Ministry of Solid Minerals, has awarded exclusive mining rights to the Ondo State government, to begin exploitation and sale of bitumen resources deposited under it’s soil.
According to newspaper reports, Minister of Mines and Steel Development, Dr. Kayode Fayemi, disclosed the licence award at the First Ondo State Investment Forum, which was held at the International Event Centre, Akure. It was reported that though Fayemi was not physically present at the event, he was represented by Engr. Mohammed Amate, who was identified as a Director of Mining Licence at the Ministry.
Specifically, the minister was quoted thus: “Nigeria currently imports over 600,000 tonnes of asphalt per annum and the nation spends billions of naira on importation of asphalt every year. The naira is weak now because of much demand for the dollar and less demand for naira and the poor export policy in the country. With bitumen being produced in Ondo State, Federal Government will ensure that none of it’s road contractors imports asphalt and certainly, many state governments will prefer to buy from Ondo state because it will definitely be cheaper here than imports from outside the country”.
Though the Minister did not disclose the extent of the license and the areas it covers, Ondo state, according to Governor Rotimi Akeredolu SAN, is reputed to hold about 42 billion barrels of bitumen in reserves, thus being the largest bitumen and Tar Sand reserve in the world.
An elated Akeredolu looks forward to deriving the advantages of the license for the development of Ondo state.
This development, as welcome as it is, reminds of the consistent call for the restructuring of mining rights and state ownership of resources within their borders. It reminds of the coal in Enugu and crude oil in Niger Delta region including those in Anambra, Imo, Abia, Lagos and Ondo states; though Anambra and Lagos are not listed as NDDC states.
The call for the restructure of the rights to mine mineral deposits in holding states has been at the root of many problems associated with governance and development in Nigeria.
It grew from mere calls for resource control for which Adaka Boro and Ken Saro-Wiwa gave their lives, to that for Sovereign National Conference and now, to restructuring the country, which has expanded the frontiers of mutual distrust among the south and north divide of Nigeria’s political geography.
Coal, bitumen and crude oil are all identified as hydrocarbons. They are different from other forms of minerals found in large quantities in the north central region of the country. It was disclosed at the 2014 National Conference, that the north central region of Nigeria holds more solid mineral deposits than the entire Asian continent. This means untapped wealth. Many of those who know attribute reason for the non-exploitation of these minerals to Nigeria’s mining laws which domicile every natural mineral found beneath Nigeria’s soil in the federal government, proceeds of which must, constitutionally, be shared between all states of the federation and Abuja.
The Nigerian Minerals and Mining Act 2007, which was passed into law on March 16, 2007 to repeal the Minerals and Mining Act, No. 34 of 1999, for the purposes of regulating the exploration and exploitation of solid materials in Nigeria, vests control of all minerals in the country in the federal government and prohibits unauthorised exploration or exploitation of minerals; though some form of illegal exploitation goes on in different places where the minerals exist. According to the Act, “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”.
The 2014 National Conference sought to liberalise this law. The delegates agreed to recommend the involvement of states and host communities in the exploitation of mineral resources domiciled in their areas. The conference voted to “retain mines and minerals, including oil fields, oil mining, geological surveys and natural gas in the exclusive legislative list” but amended the law to now read: “mines and all minerals, including oil fields, oil mining, geological surveys and natural gas provided that: (a) the governments of states where the mining activities take place hall be involved in matters relating thereto; and, (b) the government of the federation shall create a special fund to develop mines and minerals in states where such resources are undeveloped.”
The Confab’s Committee on Devolution of Powers co-chaired by Alhaji Ibrahim Coomasie and Obong Victor Attah, which deliberated on the issue stated “the overriding need to bring all the other mineral resources of the country, hitherto undeveloped into mainstream development by activating National Strategic Plan for exploitation of all minerals so as to boost their contribution to the Gross Domestic Product (GDP). The amendment of these items would also enable the federal government set up or create a special fund that would ensure the realization of the above mentioned goal through a tripartite relationship between the federal government-state and investor(s).This is meant to diversify the economy of the country rapidly and give those states involved, a sense of belonging in the Nigerian nation.
Such diversification of the economic base of the country would reduce the over dependence on oil and gas revenue; engender economic sustainability and substantially reduce the tensions over the issue of revenue sharing”, as basic reason for making the recommendation which delegates also adopted at plenary.
Within this context therefore, the award of mining rights to Ondo State comes as recognition of the right of States to own, exploit and mine natural resources domiciled in their borders for which the federal government would provide regulation in relation to the environment and then, look forward to taxes that accrue to it from such exploits.
This therefore comes as direct call on leadership of States -governors, legislators, leaders of thoughts and critical stakeholders which may also include investors- with huge mineral deposits to now approach the Supreme Court for judicial interpretation of their rights to ownership of such minerals in the light of the favourable disposition of the federal Government to Ondo state. Ondo cannot be isolated for such favours given the overriding need for the NDDC states, Lagos, Anambra, Nasarawa etc to also take maximum advantage of their resources to respond to the development need of their people.
Enugu’s coal is capable of powering electricity plants for people of the state and beyond and in pursuit of development. Solid minerals in the North central region make a good case for diversification away from oil. Niger Delta oil also needs to work for the people just like Ondo’s bitumen will work for Ondo people. Therefore, the call is now on the States to test Nigeria’s mining laws of 2007. If the law subsists and is effective, yet, Ondo gets the executive reprieve; same argument should work for other states.
Analyzing the Nigeria Mining Law 2007 in an article titled An Overview of the Nigerian Mineral and Mining Act 2007, published on www.mondaq,com, Adeoye Adefulu writes: “The Minerals and Mining Act 2007, provides a useful framework for the exploration and exploitation of minerals in Nigeria. The robust provisions in relation to local community relationships, should also serve as a useful framework for the oil and gas sector, which has over the years witnessed a fraught relationship between the local communities and the oil and gas companies.”
Written by Achilleus-Chud Uchegbu