Despite Huge Deposits, Nigeria Imports Coal, Iron Ore – Minister

Kayode Fayemi


Nigerian government acknowledges that despite its huge coal and iron ore deposits, the country still imports the commodities

By Anayo Ezugwu  |  Sep 26, 2016 @ 01:00 GMT  |

DESPITE significant deposits of coal and iron ore in the country, the federal government is currently importing huge amounts of the natural resources. The federal government said this in a document entitled: “Road Map for the Growth and Development of the Nigerian Mining Industry”, with the forward written by Kayode Fayemi, minister of mines and steel development.

The report stated, “Today, mineral production data in Nigerian mining is unclear and inadequate. A reasonable conclusion can be drawn that the industry is constrained.

“However, given the historical under-reporting of production by existing firms, together with the fact that most of Nigeria’s mineral production is conducted by artisanal miners, it is believed that the production figures are understated.

“Mineral revenues are often in one of the two markets: local consumption and exports. Local consumption accounts for majority of the market, as minerals contributed only about 0.02 percent of the reported exports in 2012.

“In a number of cases, the excess of demand over local production makes Nigeria a net importer of minerals. This is, despite the presence of huge potential for some of these minerals, highlighting the market opportunity that exists from import substitution. For example, Nigeria imports significant amounts of coal and iron ore despite the potential endowment it has. Nigeria used to import barites until 2003 when the government banned imports to boost production.”

The report added that the sector contributed approximately 0.33 percent to the Gross Domestic Product of the country in 2015 and that the contribution was a reversal from the historically higher percentages contributed by the solid minerals sector.

It stated, “Undue interference by communities and state governments, with expectations outside the provisions of the law/regulations, cripples investments and the development of the mining sector.

“Uncertainty and inconsistency in state and federal laws, interpretation and enforcement will hamper development. The perception of a change of regime affecting laws also stalls investment and partnership. Fiscal policies that remain stable and predictable in the face of changing regimes improve transparency and foster good governance within the sector.”

The report also highlighted three phases for putting the minerals sector on the path of growth. The phases are the short, medium and long terms.

According to Nigeria Coal Corporation, NCC, the country still holds large coal reserves, estimated to be at least 2 billion metric tons across many states in the country.  The discovery of bituminous coal suitable for use in coke production for the iron and steel industries opens up potential new domestic markets. The country once exported coal to Italy and the United Kingdom. Nigeria also has several deposits of iron ore, but the purest deposits are in and around Itakpe in Kogi State.


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