At the recently concluded Nigerian Mining Week, on Wednesday, a panel of discussants consisting of the CEO, Titan Minerals, Mr. Fadi Abou Ghazale; DG, Nigerian Geological Survey Agency (NGSA), Prof Olusegun Ige; DG, Mining Cadastre Office, Engr. Obadiah Simon Nkom and the DG, Bureau for Public Enterprises, Mr. Ayodeji Gbeleyi brainstormed on strategies to adopt for Nigeria to optimize her Greenfield and Brownfield mineral potentials.
Francis Kadiri writes.
In Nigeria, crude oil was reportedly first discovered in Bayelsa State, in 1956. Although a good fortune, the discovery led to the decline of mining, and left several mining sites abandoned. According to the Organization of Petroleum Exporting Countries (OPEC), Nigeria currently holds the world’s tenth largest crude oil reserves and is the world’s thirteenth-largest producer of crude oil.
While the mineral rich abandoned sites of the yesteryears have come to be known as Brownfields, the new mining sites which came into existence as a result of efforts to revitalize the mining industry have come to be known as Greenfields.
Habeeb Jaiyeola of PwC who anchored the session said that more than ever before, now is the time for Nigeria to rethink strategies for optimizing Nigeria’s Greenfield and Brownfield mineral potentials. He discussed the strategic importance of the four panelists, saying that they are carefully selected from the organized private sector and the relevant government agencies, tasking them to brainstorm on the best approaches that must be adopted to optimize the recovery of mineral assets abandoned as a result the discovery of oil, as well maximize the potential of the Greenfields.
Chief Executive Officer, Titan Minerals Nigeria (the Diamond-plus Sponsor of the 2024 Mining Week), Mr. Fadi Abou Ghazale who spoke from a private sector perspective, discussed strategies that must be adopted to optimize Nigeria’s Brownfield and Greenfield mineral assets. He underscored the importance of data generation in attracting juniors to the sector.
While saying that in Nigeria, mining is largely private sector-driven while government is the regulator, he underscored the need for the organized private sector to invest in mineral exploration in order to discover more minerals in both Brownfield and Greenfield potential areas.
Ghazale however expressed concern that ‘exploration funds are very difficult to get,’ and encouraged the government to do more to address the challenge.
He commended the government for efforts made through the National Integrated Mineral Exploration Project (NIMEP) to provide geodata on some minerals in Nigeria and further commended government for ongoing efforts through the Solid Minerals Development Fund (SMDF) in collaboration with Africa Finance Corporation (AFC) to provide mining finance to the private sector.
Ghazale, whose organization is currently executing mineral exploration projects in Nigeria and Africa, agreed with the Director General of the MCO that digitizing mineral licensing is pivotal to creating an investment friendly climate. He however explained that Nigeria needs to support its junior explorers with an enabling environment in order to make the Greenfields and Brownfields more attractive to global investors.
“Rio Tinto and other giants in that category are not eager to invest funds in any kind of exploration. They only invest in projects that have been developed to certain levels, and Nigeria will not be an exception. So, until Nigeria attracts the global junior exploration companies (mostly listed) who will begin to explore and derisk the potential mineralized areas, Rio Tinto and the others will not invest in Nigeria,” he said
He said it is only when this is done that economic mineral discoveries will be made and this is the only path to attract Rio Tinto and other mining giants. On the sideline, Ghazale encouraged the Federal Executive Council, Senate and House of Representatives to work together and invest in the generation of geoscience data needed to derisk the sector.
“Exploration funds are very difficult to get and I think the government of Nigeria should invest in the generation of credible geoscientific data to make Nigeria more attractive to the international investment community”
“When such is done, chances are high that there would be beautiful stories of mineral discoveries with economic attributes. At this stage, the potential of the Greenfield and Brownfield minerals assets of Nigeria will become attractive to the global juniors which will be able to raise funds at the capital market or international market for big time exploration projects in Nigeria.
“Once geoscience data is available, the juniors will be attracted to the assets and they will come with the aim of taking these discoveries to the next stage of Pre-feasibility (PFS) and definitive feasibility studies (DFS)”
Discussing how competitive it is to attract the juniors to any country, Ghazale said: ‘It is good that Nigeria wants the juniors to come and invest, but we have to put ourselves in the shoes of theses juniors, the juniors are businesses and they want sufficient assurance that they are putting their money where they will be able to get good returns,’ he said, stating that Nigeria is not the only country with mineral resources and must therefore compete for the juniors by financially enabling the private sector who will invest in exploration and make the assets more attractive for Foreign Direct Investors.
Director-General, Bureau for Public Enterprises (BPE), Ayodeji Gbeleyi who spoke through Ahmed Abdulkadiri, Director, Agriculture and Natural Resources, explained that existing geodata on Brownfield are results of exploration carried out by foreign companies at the time, adding that the companies had the expertise and funds to execute the task.
‘After the nationalization of the assets, government owned the data,’ he said, adding that Nigeria has not been able to conduct further studies on the assets.
On the need for Nigeria to prioritize the pursuit of data, the BPE Director General further agreed with Ghalaze, saying: ‘There must be deliberate attempt by government to generate data for the assets,’ adding that data is key information needed by investors to make informed investment decision in the mining sector.
He lamented that the dearth of data has remained a major blockade to the execution of government policy of concession some assets saying: ‘While trying to concession the Brownfield assets, we needed first hand information on data and engaged the MCO and the National Steel Raw Materials Exploration Agency (NSRMEA), Kaduna, but we could not lay hands on the geoscience data we needed to concession the assets.’
Gbeleyi noted that the fact that Nigeria does not have readily available data on its Brownfields made it difficult for Nigerian government to collaborate with competent international companies that could have helped to develop those assets.
Director General, MCO, Engr. Simon Nkom discussed the governance of licensing with regards to the Brownfields, saying: ‘The BPE collaborated with the Ministry with the intention to concession the Brownfield assets, and become no more than the regulator of the sector.
Nkom recalled that government dissociated itself from participating in mining, noting that in the past, it was involved in mining through the Nigerian Mining Corporation and the Nigerian Coal Corporation. He however said there some Brownfield assets have remain unsold and still belong to government, stating that MCO protects them even in mineral licensing including some 42 billion tones of bitumen reserves among others.
Nkom recalled that in 1940, Nigeria was a globally known exporter of tin, coal and columbine.
He encouraged investors to also concentrate on the Greenfield assets despite the existing legacy assets, noting that they will also make huge mineral discoveries.
Director General, Nigerian Geological Survey Agency (NGSA), Prof Olusegun Omoniyi Ige said his Agency is aware that the British Geological Survey explored Nigeria for geoscience data and that NGSA has information on some of the data generated by the BGS. He aid the information has been domiciled in the NGSA Geodata center and is accessible to the public.
While saying that the NGSA highly values data on both Greenfield and Brownfield mineral resources of Nigeria, the Director General explained that government recognizes challenges inhibiting the development of the resources, stating that the challenges are surmountable.
‘The advantage we have at the moment is that we already know the challenge before us, and it means that we are brainstorming and devising methods on how to surmount the challenges,’ he added.
Professor Ige agreed with Fadi Ghazale and Engr. Simon Nkom that the development of both Brownfield and Greenfield mineral assets of Nigeria must be evaluated, estimated towards eventual harnessing and development.
