CHAPTER THREE

INVESTMENT OPPORTUNITIES ON MINERAL RESOURCES WITHIN THE NORTH-CENTRAL

3.1Introduction

Despite Nigeria’s huge resources, development is done mostly by artisanal and small-scale miners. Artisanal mining refers to informal activities undertaken by individuals and groups which are heavily dependent on manual labour and using simple implements and methods of exploration and exploitation. The Nigeria minerals and mining act (section 164) defines artisanal mining as mining operations limited to the utilization of non—mechanized methods of reconnaissance, exploration, extraction and processing of mineral resources within a small-scale mining lease area (Gyang et al., 2010).

3.2Marble deposits

Marble occurs within the migmatite-gneiss-schist-quartzite complex as relicts of sedimentary carbonate rocks. These are Upper Proterozoic schist belt meta-sediments which are normally marked by a general absence of carbonates. Several of these marble deposits are currently being exploited for cement (Ukpilla, Obajana) and decorative stone (Jakura, Kwakuti and Igbetti) with some production of ground rock for industrial use. Such marble deposits appear to be limited to the western portions of the south and central parts of the country. It has been established that Abuja has 20 percent of marble located in the country. Large marble deposits occur in the Muro Hills and at Ugya in Toto Local Government Area of Nasarawa State. The deposits in these areas (Muro Hills and Ugya) are being mined sparingly and locally. The deposits are large enough to attract the attention of more investment in cement manufacturing.

3.3Gemstone Mining, Processing and Marketing

The availability of different varieties of gemstones on the Jos Plateau other within other states like Niger, Nasarawa, Kogi and the relatively low cost of their recovery has attracted a large of entrepreneurs to the North-Central part of Nigeria. Exploitation and trade in these resources have provided income for many families. Although accurate figures of recovery are unavailable, it is estimated that over 10 tons of the different varieties of gemstones have been exploited from Plateau State alone over the last two decades (Lar et al.,, 2007). Investment potential in gems is therefore high in view of the expected profit margin. Recent survey, according to Olugbenga and Olufemi (2003) shows that for open-cast mining of gemstones, the operational costs such as mobilization to site, clearing, excavation and gem recovery are around #1.34m. Mining equipment which is a function of the type of terrain will attract about #6.635m while laboratory testing equipment costs #77,000.00. thus, the total initial investment outlay required for the commencement of a gemstone mining operation is less than #10m but with current economic trend and exchange rate we should expect double initial investment outlay.

3.4Industrial mineral grinding

This will be an outfit that will produce powdered minerals from marble, kaolin, feldspar, galena etc. these minerals form a vital input in the chemical, metallurgical and non-metallurgical industries such as for the manufacture of abrasives, fillers and ceramics.

The use of these minerals is enormous. They are used in the glass, paper, paint, ceramic, refractory, chemical, plastic, rubber, pharmaceuticals and other mineral based industries. These raw materials are mineral ores which occur in various localities of the states within the North-Central in Nigeria.

The production process involves quarrying, blasting, crushing and milling. The mineral fragments are crushed into aggregates, usually under 25mm sizes. The aggregates milled into powder materials of various sizes where they are screened to appropriate sizes then bagged for sale.

The major machinery and equipment required include; jaw crusher, disintegrators, pulverizes, rotary screens, weighing balance and bagging or stitching equipment.

For the establishment of an outfit with a production capacity of 6,000MT per annum of fine ground industrial minerals, it will require an initial investment capital of 17.5m (RMDC, 2003), with the current economic trend and exchange rate we should expect double initial investment outlay.

3.5Granite/marble cutting and polishing

From a geotechnical standpoint; granites may be regarded as crystalline rocks that are suitable for building and construction purposes. Marble is a metamorphic rock consisting largely of calcite or dolomite.

The major products and by-products are marble chips, dust, palladiary, pre-cast engravement tiles and sculptures. Polished granites and marble are used in large amounts by the building industries for beautification purposes. Thy have very high export potential.

Granites are widely distributed within the different states that make up the North-Central with Abuja. Granites are mainly used for floor tiles and wall slabs. The rocks are cut into slabs by means of a circular sawing machine. Trimming machine is used to cut the ends of the slabs.

The machines/equipments needed for the operation include; diamond multiple blade saw, grinding and polishing line, circular saw machine, trimming machine. Sourcing of this machinery could be local or imported. The spare parts such as diamond blades, belts etc could be sourced locally.

The project will involve cutting of granite or marble into blocks of different sizes (1cm thick for wall, 1.5cm for floor). A total of 12 slabs (i.e. 6 of each slab is approximately 2m². According to RMDC, 2003) report, project of this kind will require an investment capital of 46.31m.

3.6Kaolin processing

Kaolin is found in large quantity in various places of the states within the North-Central, particularly at Major porter, Nahuta (Barkin-Ladi, in Plateau State), Share (Ifelodun LGA, Kwara State), Kajita (Pategi LGA, Kwara State), Ahoko, Agbaja plateau and Emu in Lokoja (Kogi Sate), Ojodu (Ofu LGA, Kogi State), Agbenema, Ofejiji, Udane-Biomi (Dekina LGA, Kogi State), Awe and Keffi deposits in Nasarawa State account for about 45,000MT of Nigerian Kaolin. Kaolin has a wide application in cosmetic, pulp and paper, chalk, agro-allied and pharmaceutical industries. It is also a raw material in soap and paint industries. The total consumption of kaolin in Nigeria is estimated at about 19,000 tonnes per annum (Lar et al., 2007).

Raw kaolin is first crushed and mixed with water into slurry. At this level some amount of diatomite reagent maybe added to decolourise the clay if necessary, after which the slurry is pumped into vibro-screen to extract foreign particles and impurities. The slurry is therefore pumped into a filter press to eject the water. Finally, the filtered cake of kaolin is dried, pulverized, milled and classified. The final product is then packaged for sale.

The equipment that an investor will require include blunger, hydro cyclones, sieves, tanks, filter presses, dryers, vibrating screen, separator, hammer mill, calciners, pumps, conditioners, flotation machines, weighing and bagging machines.

According to a report by Lar et al. (2007), the minimum capacity for the plant to be economical is 10,000 tons per annum and will require an initial investment capital of 37.34m.

3.7Floor tiles (clay) production

Clay flooring tiles are made from clay and clay-based materials. As the name implies, they are used mainly as floor and terrace coverings. There are several places within the North-Central where clay is found as earlier mentioned, particularly at Major porter, Nahuta (Barkin-Ladi, in Plateau State), Share (Ifelodun LGA, Kwara State), Kajita (Pategi LGA, Kwara State), Ahoko, Agbaja plateau and Emu in Lokoja (Kogi Sate), Ojodu (Ofu LGA, Kogi State), Agbenema, Ofejiji, Udane-Biomi (Dekina LGA, Kogi State), Awe and Keffi deposits in Nasarawa State. The tiles are generally made like roofing units and are burnt in continuous kilns. In some cases, revolving presses are used for processing the tiles. However, it is quite possible to set up a small-scale unit with hand presses with limited financial resources and investment. These floor tiles are in high demand all over the country.

The machineries and equipments required include double screw clay mixer with crushing rollers., sieve (electromagnetic), pubmill or ball mill, blunger, jaw crusher, screw press/tile press, conveyor, cutting table, glaze machinery, spray dryer, kiln with chimney, scale, generator.

For the establishment of a plant with a production capacity of 5,000,000 units of flooring tile per annum, the investor will require an investment capital of about #19.8million (RMDC, 2003).

3.8Crushed granite stone production

Granitic rocks crushed into granite stones are among the most abundant natural resources and major basic raw materials used in the construction industries. Granite stones are also used together with cement in concrete works. Granite stone is obtained from dismantling large granitic rock boulders. The crushed stones can be produced in variable sizes depending on mode of application.

The state capital of all the North-Central state as well the local governments headquarters are fast growing metropolitan cities. There is a high rate of development going on as a result of the increasing population to meet the shelter and physical infrastructure needs of the people. Thus, the demand for the stone aggregates can only continue to increase. Consequently, semi-mechanized mining of crushed stones can be set up in various states within the North-Central to meet the demand.

The machinery and equipment required include primary jaw crusher, secondary jaw crusher, hammer mill, air compressor, rotary screens, conveyor belt etc. To set up a plant that would produce 12,000 MT of granite stone per annum, it will require an initial investment capital of about #13.86million (RMDC, 2003).

3.9Lead/Zinc smelting

Lead and zinc deposits have been mined at Zurak in Wase LGA of Plateau State, although lead and zinc deposits occur within the sedimentary successions at Arufu, Akwana, Azara, Keana and Awe in Nasarawa State, Zurak has a long history of lead/zinc mining since colonial days. The deposit is reported to contain high content of silver.

Zinc (Zn) ranks third and lead (Pb) forth in the world metal consumption (RMDC, 2003). Within the country, lead is used in the manufacture of acid lead batteries, while zinc is used in galvanizing, alloy and chemical industries.

We are of the view that for successful exploration of sub-basalt tin, an integrated electrical resistivity with electro-magnetic methods will be adequate since this method has the advantage of determining the thickness of the bed rock and aquifer, the nature of the tin deposits, the characteristics of the overlying cover (hard or soft) and consequently enables a definition of the sub-surface topography of the potential tin-bearing areas. With this, the investment capital will be lower since drilling operations will be reduced tremendously.

We recommend solution-mining method as an alternative to the conventional open-cast mining where substantial landmass is devasted constituting a menace to the environment. This mining method is successfully practiced in countries like Bolivia and Malaysia, which present a relatively similar geology and other socio-economic factors.

3.10Value addition

The availability of the mineral resources alone cannot drive the solid minerals sector of Nigeria. It is equally driven by the ability of stakeholders to exploit and market the products to the overall economic benefit of the country. Universal best practices involve value addition to the quality of the raw minerals to attract buyers and increase utilization in the various industries.

Value addition requires laboratory testing, further processing and beneficiation. There are quite a number of industries involved in the processing and beneficiation of Nigeria’s solid minerals with majority of them in the industrial minerals sub-sector. Several kaolin processing and other industrial mineral processing companies can be seen in Plateau State, such as Kavitex, monumental kaolin and the Global industrial raw materials company, while Baryteand Bentonite are processed in Nasarawa and Edo States amongst others. The National Iron ore mining company ofNigeria is expected to be the hub of Nigerian Iron ore industry and is saddled with the responsibility of exploiting, mining, processing and supplying of iron ore concentrates to the major steel plants of Ajaokuta and Aladja on annual basis (it is worth mentioning however, that a lot of mineral resources in Nigeria are illegally mined and exported to the international markets with no official records what so ever (Gyang et al., 2010).

Minister in charge of the Ministry of Solid Minerals Development stated that in order to give the reforms in the mining sector a more meaningful approach, the leadership of the Ministry has prioritized the development of Seven Strategic Minerals (7SM), Coal, Bitumen, Limestone, Iron Ore, Barytes, Gold and Lead/Zinc. These seven minerals are world class and have been carefully chosen for development in view of their strategic importance to Nigeria’s economy and their availability in quantities that are sufficient to sustain mining operations for years. One obvious implication of the above is that potential investments in any of these seven may receive accelerated response from the government as such investments would be seen as been in alignment with the government broader goal of enhancing infrastructural development across the six geopolitical zones of the country and their expected contribution to the nation’s GDP (Ministering briefing, 2019).

Legislative Framework. The Federal Government of Nigeria is generally creating an enabling environment that will enable business to flourish. The enabling environment with respect to the mining sector includes the development of a new legislative framework. The legislative framework is embedded in the Mineral and Mining Act 2007 (“the Act”). The Act contains specific provisions that will enhance private sector leadership in the development of the mining industry in the country. Some of the salient provisions contained in the Act are as follows:

Ownership and control of minerals. The Act vests entire property in and control of all Mineral Resources in, under, or upon any land in Nigeria, its contiguous continental shelf and all rivers, streams and water courses throughout Nigeria, any area covered by its territorial waters or constituency and the exclusive economic zone in the Federal Government of Nigeria. This provision essentially mirrors the Constitution of the Federal Republic of Nigeria.

Transfer of Property in Mineral Resources Section 1(3) of the Act however provides that property in mineral resources shall pass from the Government to the person by whom the mineral resources are lawfully won upon their recovery in accordance with the Act.