Efforts by the Federal Government to make local value addition the model of development in the solid minerals sector are yielding the desired results.
This followed the signing of a $1 billion Memorandum of Understanding (MoU) by two firms on the establishment of an iron ore-to-steel project in Kogi State.
A statement by Kehinde Bamigbetan, the Special Adviser to Solid Minerals Development Minister, Oladele Alake, said the minister was excited by the development.
According to the statement, Dr. Alake hailed the feat in China during one of the sidelines activities of the just concluded visit of President Bola Ahmed Tinubu to Beijing.
The statement quoted the minister as applauding the development while addressing promoters of the project when he was presented with the MoU between Chart and Capstone Integrated Limited of Nigeria and Sinomach-He of China.
Alake pledged the cooperation of the Federal Government with the promoters to ensure the delivery of the project as fast as possible.
The minister said the Federal Government has reversed the pit to port policy under which mining companies exported raw minerals to extraction with local value addition which is the best guarantee of jobs for youths, skills transfer and better balance of trade between the country and her trading partners.
He noted that, to promote local value addition, applicants for licences to mine must disclose plans for processing the raw minerals as part of the conditions for approval.
Alake said: “The trade balance between Nigeria and China is over one billion dollars in favour of China because the minerals imported from Nigeria are essentially in raw forms.
“Once Nigeria starts to export finished or semi-finished value-added mineral products to China and other trading partners, our balance of trade will be more favourable, and our foreign exchange earnings will improve. With aggressive local value addition and the revenue from it, the prospect of reducing our debt burden in the nearest future is possible.”
Presenting the MoU to the Minister, Chief Executive Officer of Chart and Capstone Integrated Limited, Chief Abel Edijala, commended the minister for putting in place efficient licence application process that works without red tapes and corruption.
Edijala said: “We applied for an exploration licence for our iron ore mining project at the Mining Cadastral Office, and we did not need to see anybody before our application was approved within a reasonable period. This shows that the system you have put in place is fair and works for all. I must commend you for this.”
He explained that the model is that the iron ore site will feed the steel manufacturing plant and grow to service the needs of the Nigerian economy for industrialisation.
Edijala added that the project will require tax waivers for the importation of equipment and tax holidays during the take-off period to cope with the fluctuations in the macro-economic system and meet targets.
Expressing readiness to commence the project, the Vice Manager of the Chinese firm, Hou Encai, said the company engages in mining, iron making, steel rolling, steel making, the construction of infrastructures, and handles 80 per cent of the steel needs of the Chinese economy.
Encai said: “In mining, we have the technology on how to excavate the ores from the earth. We can evaluate the iron ore potential of any site and tell you what the feasibility of mineral extraction is on a site. Secondly, we have the equipment needed, including excavators and drilling machines for mining iron ore. For transportation of iron ore from site to the factory, my group produces the trucks.”
According to the MOU, Sinomach-He shall be the master contractor and deploy its expertise in the engineering, procurement, installation, commissioning, and training of the project.
THE NATION
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