Engineer Mohammed K. Amate is the Director General of the Mining Cadastre Office, a federal government agency charged with the statutory responsibility of transparent administration and management of mining titles. The Camborne scholar who trained as a mining engineer said the MCO as an autonomous, transparent and standardized agency for mineral title administration has helped to boost investor’s confidence in Nigeria’s mining sector. He spoke with FRANCIS ADINOYI KADIRI.
Lately the administration set out to standardize the operations of your agency – the mining Cadastre Office. What exactly was it about?
The mining cadastral office is charged with the responsibility of issuing mining licenses all over the country.
Before the establishment of the MCO, a department within the federal ministry of mines and steel development was responsible for issuing out mineral titles. It was discovered that under the ministry, the issuance of mineral titles was marred by irregularities.
So in order to give it the well deserved transparency and international acceptance, government in collaboration with the World Bank, carried out reforms in the mining sector. One of the reforms was the establishment of the MCO as an autonomous agency of the ministry, charged with the responsibilities of management and administration of mining titles and leases in a transparent and efficient manner.
What exactly are the features of the reform that standardized the MCO as it is today?
Prior to the establishment of the MCO, it used to take upward of two to three years to get one license. Now, as a result of the computerization and standardization embodied by the reform, today you can come to the MCO, submit your application and you are sure of getting your mining license within 40 days of application.
This development is the result of the computerization of the process which was hitherto cumbersome when it was not computerized. Now, everything is on first-come-first-served basis and this has built a lot of confidence in both indigenous and foreign investors. So the status of the MCO as an autonomous, transparent and efficient agency for mineral title administration has helped boost investor’s confidence in Nigeria’s mining sector. Applicants are sure that they will get the license as long as the area is free of incumbencies.
Today, one major achievement of the reform as it affects the MCO is the time it takes to get a license. In the mining sector, getting a license at the predetermined time is very important, and so it helps investors to avoid delays and also plan for their investment.
The transparency in administering titles is also crucial to the development of the sector.
Investors are sure that they will get titles to the areas/lands they seek to mine without having to know anybody as long as they comply with the laid down procedures already established by law. They come, follow the processes and they get the licenses. This has really encouraged investors and has continued to boost the potentials of the sector as a fertile ground for investments.
But the condition for every license granted: the beneficiary must either use it, or stand to lose it, if it is not properly utilized. This principle is to ensure that the sector is active; a strategy for ensuring its orderly development.
Before mineral titles are granted, the applicant or prospective investor presents a minimum work program. If in the course of time, we realize that the investor is failing to meet up with his work program, we will revoke the license.
What will you say is the shift in terms of responses of investors to the sector as a result of the standardization of the MCO?
Enormous! Because of the transparency in administration as the way and manner we issue licenses according to international best practices, there has been tremendous increase in influx of foreign investors to the sector.
We have investors from the following countries: Australia, United Kingdom, Canada, China and even more. They are currently operating in Nigeria’s solid mineral sector as a result of the various reforms, the MCO inclusive. They are engaged in extensive exploration programs in Nigeria, now.
Mining has a tradition all over the world: Anywhere in the world where mining became successful, there are usually the first explorers called ‘pathfinders.’ The pathfinders are the junior mining companies who come in to discover the minerals before the big conglomerates like the Rio Tinto,
BHP, AngloGold and the rest. The pathfinders discover areas where there are solid mineral deposits, and then they expose it to the big mining companies. The big companies come for further deep exploration of discovered mineral deposits. In mining, we always say “be the first to be the second,” because the first are always the junior mining companies.
What are the major challenges you have faced in the task of transparently administering mining licenses?
When we introduced the cadastre system, there were problems. As you know, it is not easy to establish new processes where people are used to old systems.
Initially, we moved from the manual system to auto card system, and we realized that there were so many errors especially the overlap of previously issued titles. So we moved to Excel system, yet there were still errors; because we realized that there were areas of overlap. We engaged renowned cadastre consultants from German. The company is called GAF and they came to install a new computerized system. GAF solved the problem using a system called SIGTIM. SIGTIM is a transparent style which allows you to easily know the areas covered by a previously issued title.
What countries have the higher numbers of companies operating in Nigeria’s solid mineral sector?
Australia is patronizing us. As we speak, there is an Australian based mining company in Osun which has carried out exploration program on gold, and have delineated a sizable deposit and very soon they will commence operations.
There is another Australian company in Kogi state called Kogi Mines involved in exploration of iron ore. They declared over half a billion tons of iron ore within ten percent of their tenement area. They are vigorously carrying out further explorations and have good hope of commencing mining process before end of the year.
There is another company called Northern Numero Resources which is also an Australian company carrying out explorations for iron ore in Kogi state, and for Gold in Kebbi state. They also hope to commence mining operations before end of 2014. There are also a number of Chinese companies involved in mining of lead zinc and quarrying. There are many more foreign companies that I can give you their details.
Would you say that there is competition between foreign investors and indigenous investors operating in the quarrying business?
No, I would not call it competition; I think there is synergy between them. As a matter of fact, mining requires a lot of expertise and technicality. Nigerians are doing great but we are still developing and so we still need technical support and assistance from advanced mining countries like Canada and Australia. I call it synergy and cooperation with foreign investors and partners.
What exactly is the basis for the synergy?
Local investors will get the technical expertise from foreign investors because foreign investors have the technical expertise and access to mining finance. As you know, Nigerian banks have only recently started to consider giving loans to mining finance, whereas, mining finance has been on for many years in the advanced countries. So there is synergy, not competition and this is not only in terms of finance, but more in terms of technical expertise. The foreign companies have access to finance and mining equipments which are very expensive.
Countries like Australia and Canada are renowned for mining. In fact, mining is the mainstay of Western Australia.
The minister has taken the campaign for foreign investment to international mining conferences like the Indaba in Canada and African Down Under in Perth, Western Australia. How successful do you think the campaigns have been?
Our campaigns have been very successful. I have said earlier that there are Australian companies already working here while some are doing exploration for minerals, a prelude to mining of minerals. It is the government’s campaign that attracted those foreign companies to the Nigerian solid minerals sector, and many more will come.
Our presence and showcase of the sector at international mining conferences like the Indaba in South Africa and Africa Down Under in Perth, Western Australia has really yielded positive results in terms of attracting foreign investors to the sector. We were able to woo them: they came, they saw and they are investing in the sector.
To what extent do you think the country’s lost glory can be revived?
As a matter of fact, in the past, Nigeria was a major destination of investment in solid minerals. Government is already reviving the lost glory and the evidence of the success is the increasing number of investors who are now in the sector.
Nigeria was a major destination for tin and columbine and I can confidently assure you that tin is making a come-back. At the Indaba, the international community made a lot of inquiries about Nigeria’s tin deposits, an indication that the global mining community looks forward to coming to Nigeria for exploration for tin, then mining.
They were very excited about our responses and we are expecting them in some two weeks from now. They will come and look at our tin resource. So, you can see that Nigeria’s participation in international mining conferences has positively impacted on the conception of the world about the sector in Nigeria.
Do you foresee a situation where the sector will develop in Nigeria such that Nigeria hosts the world to an international mining conference?
That is an interesting question. Fortunately, we are already discussing with partners and stakeholders about that. We want to start it as a West African Mining Conference organised for West African countries which may eventually be a global event. Actually we have gone very far with this discussion. The responses of the partners have been very encouraging. The minister met some of his colleagues and the idea is in motion for actualisation.
What minerals are the greater delights of foreign investor?
At anytime, iron ore will always be wanted because no country can industrialize without iron and steel. That is why you find that there is always interest in iron ore. I already said there are companies in Nigeria currently carrying our exploration and mining of iron ore.
Another mineral you will find that people are very interested in is copper, one of the best conductors of electricity. And you know electricity is a development that has come to stay. Lead zinc is also in high demand. So, I will say iron ore, copper, lead zinc and precious metals like gold will always be in great demand.