Uche Usim, Adewale Sanyaolu Abuja
Despite its under-performance, the solid minerals sector contributed N87.61 billion to the country’s Gross Domestic Product (GDP) in 2016.
This represented 0.13 percent of the total GDP of N67. 9 trillion for the year.
The performance figure of the industry is contained in an audit report of the solid minerals sector released yesterday by the Nigeria Extractive Industries Transparency Initiative (NEITI).
The report also indicated that the industry contributed N43.22 billion to government coffers in 2016, while it put the Free on Board (FOB) value of solid minerals exported in 2016 at $40.934 million.
A breakdown of the figure shows that taxes collected by the Federal Inland Revenue Service (FIRS) accounted for N40.38 billion or 93.43 percent, while fees collected by the Mining Cadastral Office stood at N1.15 billion or 2.66 per cent.
Some of the highlights of the 2016 audit report of the solid minerals sector indicated that the Mining Inspectorate Department (MID) recorded N1.64 billion as royalty payments, an increase of 30.15 per cent over the N1.27 billion reported as royalty payments in 2015.
The audit conducted under the EITI principles and standard reconciled payments made by mining companies in terms of taxes, royalty and rents against receipts of such payments by relevant government agencies.
From the report, total minerals production for 2016 was 41.87 million tonnes valued at N34.09 billion, representing 33 per cent increase on the N25.56 billion reported in 2015.
However, tax collection and payment of other fees for 2016 reduced by 32 per cent when compared to the figure of N63.98 billion for 2015.
The report further disclosed that while 651 extractive companies made royalty payments in 2016, only 56 companies that met the materiality threshold of N3 million and above were considered for reconciliation. The companies that met this threshold accounted for 86.87 per cent of the total royalties paid.
On state-by-state minerals production, Ogun State contributed 33.49 per cent to the total production to top the table, followed by Kogi State with a contribution of 19.7 per cent, while FCT came third with 6.20 per cent.
From the report, minerals production by companies shows that three companies – Dangote Cement Plc, West African Portland Cement Plc, and United Cement Company of Nigeria Limited (UNICEM) contributed 70 percent of total production in 2016. This shows that the cement sub-sector is still dominant in solid minerals production activities.
Further analysis of production by minerals types shows that limestone was the most produced mineral and accounted for 49.35 per cent of the total solid minerals production in 2016, followed by granite with 31.32 percent.
The least contributions were made by gypsum, iron, talc and amethyst with 0.1 percent each.
The report also revealed that the solid minerals sector’s contribution to exports in 2016 stood at N11.16 billion, representing 3.38 percent of the N330.01 billion for non-oil exports and 0.13 percent of total export of N8.53 trillion.
From the report, China was a major destination of Nigeria’s solid minerals in 2016, accounting for 53.63 percent, followed by Spain and India which accounted for 26.48 percent and 8.90 percent respectively.
The sector has witnessed a steady, even if marginal increase in its contribution to the GDP from 0.11 percent in 2014, 0.12 percent in 2015 to 0.13 percent in 2016.
The sector also contributed 0.3 percent to national employment in 2016.
The report also disclosed that a total of 4,575 valid minerals titles spread across the various states of the federation were recorded in 2016. This comprises 1,751 Exploration Licenses, 208 Mining Leases, 1,563 Quarry Leases, and 1,053 Small Scale Mining Leases.
Out of the total valid titles in the MCO register, 1,465 titles were issued in 2016 while 1,030 were revoked and 14 were transferred.
The report further stated that 315 Exploration Licenses were issued in respect of the priority minerals identified by government. The priority minerals are gold, lead-zinc, baryte, iron-ore, bitumen, limestone, and coal.
The report revealed that some title holders entered into MOUs with other companies without duly informing the relevant government agencies.
As a result, out of the 651 operators that paid royalties, 312 companies representing 48 percent were not recorded in the MCO register either as valid, revoked or transferred titles for the year.