How Nigeria is losing billions to weak regulation of mining sector

The Odonigi community in Moro local government area of Kwara State is blessed with large quantities of gold deposits over the years. However, illegal miners hold sway -- five were arrested in 2017 with seven bags of gold.

For a gold-rich community, however, basic amenities like schools and health care facilities, are luxuries. The only school in this community was locked, during a recent visit by this reporter, leaving the children to travel about seven kilometres to Alapa, which is located in another local government, to get basic education.

This is also the case with healthcare and other basic necessities of life.

For such a community, one would expect that the resources gotten from their land will be harnessed for their growth and development, but this is far from reality. Yes, gold mining is ongoing but it does not yield them any compensation.

In fact, many, like Hassan Odonigi, the Mogaji of the community, were surprised at the mention of mineral resources in their community.

In an interview with this reporter, he acknowledged their poor living conditions and confessed that asking for hospitals would be requesting too much. "We have not even gotten teachers for our school, you are talking about healthcare centre. Let them even give us the teachers first," he said.

Lost resources

According to the Nigeria Extractive Industry Transparent Initiatives (NEITI), Nigeria lost $9 billion between 2014 to 2015 to illegal mining of gold and other mineral resources. While the definition of illegal mining has been restricted to miners without license, little attention is paid to the legal miners acting illegally.

The money lost to illegal mining is mostly licensing fees and royalty to the government. While the government could be losing these funds, there is a bigger loss: this is the loss incurred through government's inability to properly monitor and regulate the activities of miners.

For instance, there was a rush in the mining of mineral resources in Oro town, Kwara State in the early 2000s. Tourmaline and topaz were in abundance, and people travelled from far and wide to partake in the rush. Labourers and buyers of gemstones, from within and outside the country, including places such as Mali and Senegal, thronged the place. But, this did not last beyond 2005, even though the exploration of mineral resources has not ceased.

Labourers continue to dig massive holes looking for gemstones, using crude tools such as hammers, diggers and shovels. With a general lack of trust in the government, as well as the portable nature of the gemstone, the difficulty of monitoring both the legal and the illegal mining remains a huge challenge.

After an initial difficulty accessing miners and dealers in the town, the reporter was finally directed to Dahiru Liman, a former senior special adviser on solid mineral to a former governor of Oyo State, Rashid Ladoja, who currently coordinates the mining activities in the town.

Mr Liman told the reporter that illegal mining persists because of the failure of the federal government to implement its policies, particularly, on financial interventions.

In June 2016, then Minister of Mines and Steel, Kayode Kayemi, announced the approval of N30 billion intervention to the mining sector, among other things, to improve the sector. But, Mr Liman is concerned about the disbursement of such funds.

According to him, even if such funds are released, miners will not get it. "They will call the miners together, and present all our certificates. They will say, we will give you N50 million, N250 million, at the end, only one person will get from Kwara. It will be hard for you to see two people from Kwara., and the person - go and look - they are not miners. The real miners are suffering. How can things go on like that? That is why things are like this."

Difficulty in obtaining licence encouraging illegal mining

The miners also said that the process of acquiring a mining licence is frustrating.

The centralisation of the mining sector's regulatory bodies also do not help. The Nigeria Mining Cadastre, -- the agency with the permission to issue mining permit and lease -- is located in Abuja. The implication of this is that miners have to go to Abuja, to process the permit.

To the miners in Oro, the most important 'licence' is to settle the land owners and the King of the town, while Mr Liman handles the registration and licensing. He also provides protection in the event of police harassment through his company, Afrorocks Nigeria Limited.

There is also a lack of trust in the government's registration process, according to Mr Liman and Ayuba, popularly known as Pastor, who just like most miners in the town, is from Niger State.

"The first place is to go to the owner of the land, then to the Kabiyesi. The kabiyesi will send you to the local government, then to Ilorin. Ilorin will be the one to send you to Abuja," he said.

"You will spend money, because anywhere you go to, you must 'drop' something. If the state sees that there is plenty of resources there, you, (the person) who submitted it will not get it. They will exchange your certificate. When you talk, they will say 'where is your certificate.' So how can you see another place, and take it to them again?"

What the law says

Section 44 (3) of the 1999 Constitution of Nigeria (as amended) vested the ownership of mineral resources to the federal government. As such, the licence to explore mineral resources is the exclusive right of the federal government.

For a potential miner to get a permit, the individual must first have a registered company. If he suspects that there is mineral deposit on a piece of land, he will approach the owner of the land in question and after an agreement is reached, then the coordinate of the land is supposed to be taken to the Cadastre office in Abuja.

But, this is one rigorous process most miners would rather avoid, especially because of the lack of trust in the system. For these miners, the easy compromise is to get people who are not miners but with existing permit and settle the King.

A miner, Ede Obinna, re-echoed this concern during an interview with this reporter.

"The process of acquiring (the) permit is cumbersome. The 2007 Mining Act does not recognise individuals. When you locate the site, you will take it to cadastre. They are in charge of issuing mining licences, permit to export minerals for commercial purposes, permit to export minerals for analysis, and collecting royalties on behalf of the government.

"The problem is that if the government says N50,000, for you to speed up the process, you have to get people to help speed up the process by paying more," he said.

For a town of civil servants, the economy of Oro significantly benefits from the mining activities, legal or illegal. Here is how: Mr Ayuba explained that the local miners first get the permits from the land owner, who they pay. Then they source for labourers who are usually not paid, but settled with foods and drinks. They get to work until the gems are found. The gems are then divided into 10. The miner takes two portions, while the other eight are given to the labourers but are later bought back at "bush rate" which is usually very cheap. They are then taken to Ibadan where they are sold to Senegalese and Malians.

But there seems to be a big problem with this structure: The miners are supposed to pay N75 for every gram of Pink Tourmaline. How then will the government determine the quantity of tourmaline removed? Henry Bolarinwa, the federal mines officer in Kwara State, said there is supposed to be an attaché to the sites, who monitors the activities of miners.

"It is expected that you have to station an officer, and if you want to station an officer, you must cater for the officer. We need results, but how do you help those officers to achieve the result. You must be able to get accommodation for the officers," Mr Bolarinwa said.

He further complained about the shortage of manpower, lack of adequate support from law enforcement agents and also traditional rulers, with respect to providing covers for miners to operate illegally.

"Unfortunately, we are constrained by the attitude of our people. At times, you will get to a site, and they will say a particular Emir is in charge. Whatever we get, there is the 13 per cent derivative. The state government is not even helping us. The law says when you are licenced, bring it to the ministry for us to monitor and inspect the site. Unfortunately, they only move to the site as soon as they have the permit."

The valuation process is equally faulty, according to Mr Ayuba, because even the royalty for the gems is determined by the 'bush rate' and not the actual rate they are supposed to be sold.

Although the officer said his office is conducting awareness through the joint committee called Mineral Resources and Environment Management Committee (MIREMCO), however, the level of awareness is still poor.

Close

Another area where even legal miners are coming short is in the aspect of maintaining the environment.

In Oro, there are several abandoned pits and tunnels that are just an inch from collapsing, which pose a great threat to residents and livestock.

A department of the Ministry of Solid Mineral; Mining Environmental Compliance (MEC) is supposed to monitor the mining sites, to ensure environmental compliance. However, in all the mining sites, legal and illegal, abandoned pits litter the environment.

According to Mr Ayuba, since they have paid the land owners, they have no business with the pits.

To further exacerbate the situation, the sand at the sites are sold to people for sand filling, leaving holes that are more than 10ft deep, in the bush.

One of the locals who gave his name as Adekunle recounted how about four years ago, a student at Dab Comprehensive High School, Iddo Oro died in one of the pits, while attempting to swim in the pool in one of the pits, some of which have been abandoned for more than four years. The pits are behind the school.

Photo Caption: Dab Comprehensive High School where a student died while attempting to swim in an abandoned pit just behind the school.

Way Forward

Mr Bolarinwa said the means for solution to these challenges fall within the scope of the Mining Environmental Compliance (MEC) department of the Ministry of Solid Minerals.

According to him, "if you are removing sand, there is a particular level (at which) you can remove it. If you go below that, it means you want to completely degrade the place. The law says you must have a development agreement. (There is) the Environment Protection and Rehabilitation Program (EPRP), which you have to do, (as well as) the Environmental Impact Assessment (EIA) which every mineral title holder is obliged to do before the commencement of mining."

The pits are still there, uncovered.

The communities are still there, without life's basic amenities.