World Bank to Assist Nigeria in the Development of the Solid Mineral Sector

Abuja – November 11, 2004

The Project is expected to increase the Government's long term institutional and technical capacity to manage Nigeria’s mineral resources in a sustainable way.

It will also establish a basis for poverty reduction and rural economic renewal in selected areas of the country via the development on non-farm income generating opportunities through small-scale and artisan mining and diversify away from oil sources of income.

At the end of the negotiation, Thursday, November 11, 2004, the Director of Multilateral institutions department of the Federal Ministry of finance,  Alhaji Suleiman D. Kassim,  signed the Agreed Minutes of Negotiations on behalf of the Federal Government of Nigeria while Mr. Paulo De Sa, Lead Industrial Economist in the Oil, Gas, Mining and Chemicals Department  signed  for the World Bank.

Known as Sustainable Management of Mineral Resources Project, the credit is repayable over 35 years including a 10 – year grace period with no interest charged.  It will however attract a service charge of 0.75 % on the principal balance not withdrawn and a commitment charge of 035 %. 

In his remarks at the signing ceremony, held at the World Bank Country Office in Abuja, Alhaji Suleiman Kassim  described the negotiation as smooth.  He commended the nine-person Bank team for the cordial and friendly atmosphere created during the negotiation process. 

Alhaji Kassim who led a fifteen-person Federal Government delegation negotiated the credit assistance with the World Bank  expressed hope that this would lead to smooth disbursement and implementation of the project for the benefit of Nigerians.

In his own remarks, the Country Director of the World Bank in Nigeria, Hafez Ghanem, who witnessed the signing of the negotiation minutes said, “I was impressed with the way the negotiation went. It reflects cordiality and trust between the Government and Bank teams.  This shows that we were not two teams slugging it against each other”.

Mr. Ghanem assured that the Bank will do more for Nigeria and also ensure proper implementation of the project and disbursement of the funds with the Nigerian partners.

The Project is expected to have  great impact on the Nigerian society as it  will diversify the  economy, reduce dependence on the oil as  well as reduce poverty in the mining communities in the country.

The Project will enable mining companies to  have  access to credit by working with  banks to mitigate risk on lending to miners.  There will also be marching grants and advisory services provided for the miners.

The project will also assist government in drafting a new Minerals Act to replace the 1999 Minerals Act.

It will also assist in facilitating the establishment of a Mining Cadastre (Registry) for easy issuance of mining permits in a transparent manner. 

The project will also produce  basic and reliable geological map with complete  information on the solid mineral potentials that cover the entire country. 

It will also, in the 5-year span of the World Bank assisted project, more than 500,000 informal or illegal miners will be formalized or legalized.  The project will decrease the import of solid minerals into the county and increase exports.

“We expect to assist Nigeria to become a world class producer of gold and gemstones . Nigeria is presently a major producer of gemstones and tin but most  are smuggled out of the country”,  said Paulo De Sa.  

He said the Solid Mineral project will diversify the economic activity in the country and  substantially reduce poverty by increasing the revenue of the rural population through formalizing and supporting miners with equipments, new mining techniques and technical assistance.  Paulo De Sa who described mining as  a traditional activity in Nigeria disclosed that  virtually all the 36 states of the country, including the Federal capital Territory, have  minerals.

According to him, “the project is of importance to Nigeria as it will revolutionize the mining activities currently being done informally or illegally and in a non-professional way due to the inability of miners to properly  and easily secure mining licenses or permits.

The closing date for the project is June 30, 2010.

PROJECT COMPONENTS:

Component A - Economic Development and livelihood diversification in Artisanal and Small-scale Mining Areas.

The objective of the component is to contribute to increased production by artisanal and small-scale miners in an environmentally and socially sustainable way, which will be achieved through the empowerment of small-scale miners and surrounding communities that depend directly or indirectly on the exploitation of solid minerals to ensure their sustainability.   The component will support activities aiming to: i) define small-scale mining and gender issues in mining through baseline studies; ii) improve technical, environmental and social conditions of small-scale mining operations through community-driven pilot projects; iii) strengthen the Jos School of Mines; iv) establish a SSM Unit at the Federal level with satellite field offices; v) improve access to credit and financing in the mining sector, in particular for medium and small-scale mining; vi) support of the private sector institutions, and awareness of HIV/AIDS in the mining sector; and vii) foster development of mining for specific commodities with emphasis on import substitutions and sector development.     

Component B - Strengthening Governance and Transparency in Mining

The main objectives of this component are to improve Nigeria’s competitiveness to attract private investment in mining, and the administration of mining rights and activities.  The activities supported by the Project include: i) Revision and modernization of the legal and fiscal frameworks for mining; ii) Institutional capacity building to provide for efficient public mining institutions and transparent management of the sector; iii) Development of a computerized registry and Mining Cadastre system in accordance with international best practice; and iv) Development of good environmental and social management practices within the mining sector

Component C - Private Sector Development

The component will support the efforts of the Government to facilitate the development of a national mining industry led by an efficient private sector and the restructuring of the State-owned mining enterprises. Within this framework, the Project will support: i) Restructuring of State-owned mining corporations (NMC and NCC); ii) Strengthening of the geological infrastructure (geophysical, geological mapping and mineral assessments) as well as development of a national solid minerals information system to promote investment in the mining sector

Component D - Project Coordination and Management .

Ministry of Solid Minerals Development (SMD)   shall establish and maintain, during the execution of the program, a Project Management Unit (PMU) to coordinate project implementation

For further information, contact Paulo De Sa, Lead Industrial Economist, World Bank, Washington (pdesa@worldbank.org and U.L. Adie, Project Coordinator, Sustainable Management of Mineral Resources Project of  the Solid Minerals Development, Abuja (uladie2001@yahoo.co.uk)