State governments are now free to explore and exploit the mineral resources in their domains provided such is done legally without interfering with locations already given to other stakeholders, the Federal Government has said.
The government stated that although it had exclusive rights to mine minerals across the country, the constitution encourages states to either set up their own investment corporations or partner private investors to exploit minerals in their domains.
The Minister of Mines and Steel Development, Dr. Kayode Fayemi, stated this in Abuja while playing host to the Lagos State Commissioner for Energy and Mineral Resources, Mr. Wale Oluwo, who led a team from the state to tender some requests before the Federal Government.
Reacting to statements by the commissioner on the enormous minerals in Lagos, Fayemi said the state was free to explore and exploit the resources since such activities would provide jobs for Nigerians and increase the Federal Government’s revenue through the payment of royalties.
He said, “That is one of the points I have tried to emphasise about governance when people talk about the exclusivity of the mineral rights in the Nigerian constitution. Yes, it is exclusive; but there is absolutely nothing in the law; in fact, it is being encouraged in the law for states to either set up their own investment corporations or go into partnership with the private sector in order to exploit what is available to them in their states.
“This is provided the coordinate has not been given to another interested stakeholder before application comes from the state. This is very important for you to know. So, our primary interest is that these resources are explored and exploited.
“Once you do that within the law, the government will at least get royalties from you, get taxes paid legitimately, have people employed in this area. This achieves our objective of alternative revenue generation for the country and job creation for our people.”
The minister stressed that there was no way the Federal Government would succeed in minerals development if it failed to collaborate with the states.
“Yes, mineral exploitation is exclusive to the Federal Government, but the reality is that land ownership is also exclusive to the state governments,” he added.
Fayemi told the visiting team that the Federal Government would be interested in the minerals found in Lagos State.
He said, “We will look at it and verify it independently and see what can then follow based on your request and for the overall interest of the country. Some of these mineral resources that you have found in commercial quantities are Greenfield.
“If it is Greenfield, there will be ways of going about it so that we can achieve the original point I made, which is that the state can benefit and if the state chooses to explore it, there is nothing that bars the state from doing that.”
On the minerals in Lagos, the commissioner said limestone, silica, clay and a few other resources abound in large commercial quantities in the country’s largest industrial city state.
Oluwo said, “We estimate that we have limestone in the region of 12 million metric tonnes around the Epe area. We also estimate that we have silica sand of up to 200 billion cubic metric tonnes around the Ibeju-Lekki area. And the third one, which is clay, is about 180 billion cubic metric tonnes around the Lagos East.
“We’ve been carrying out various geological surveys, both aerial and on the ground, and we believe that data is key. So, when you are in a position to make that decision as to gathering data with respect to where solid minerals can be identified, we are assuring you that in Lagos, we will put our resources behind your efforts.”
Opinion
Nigeria cannot ignore the non-oil Mining sector because of it huge potential to create jobs and provide much needed revenues.
As far back as 2012, Mining was 11% of our GDP and growing. More formal mining licenses were being issued to International players to operate commercial mines in Nigeria.
However Nigeria has punched below her weight in mining…most mining is local, informal and dangerous. ..recall the lead poisoning from gold mines in Bagega Zamfara? MSF said 400 children died. …
The problem with mining is our faulty federation. The Federal Government, is issuing Mining licenses for state lands.
Why?
Why can the state not issues these licenses and thus earn the tax revenue? Why must that revenue flow back to Abuja?
Osun state hosts Reltel Mining Limited which mines gold in Osun. Reltel says their Osun mine holds 620,000 ounces of gold…Gold is $1,093 am ounce ( Jan 2015)…thus Osun in fiscal crises is hosting a company that has potential assets of $677m (N135b)…..yet if that company mines and exports that gold, all Osun can directly get is 5% PAYE Tax of the salary the firm pays it’s workers…and a share of the VAT…..but State of Osun has and owns the land…
So what’s the incentive for the governors to formalize mining in their states? None.
The solutions are plenty, but will start with changes in our fiscal federalism structure..States must be allowed to earn direct fiscal revenues from commercial activities that occur within their borders….
The solution is not as the Minister has implied in the article below that states should “partner” with the Federal Government to drive mining….Mining benefits only the FGN. Why should a federal government have exclusive rights over state land?
So amend the constitution, take mining out of the exclusive list list and put in the concurrent list.
Change the fiscal federalism terms, increase the percentage of FAAC based on derivation, set a target of 12 year and gradually move derivation from the present 13% to 50% over 12 years…
Thus states like Osun can retain 50% of their locally generated wealth in 12 years time…12 years is enough time for States to fund their budgets with less monthly FAAC…..
Such policies will drive states to expand their revenue capacity via mining, and reduce the almighty focus on crude oil…
It’s our problem, we can fix it
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