Solid Minerals Overview
Lets dig deeper for Nigeria's new wealth
The solid minerals sector in Nigeria has long been treated as the poor relation of the oil and gas sector. Compared to the level of investment and development in oil and gas extraction – which has grown exponentially since Nigeria joined the Organisation of Petroleum Exporting Companies (OPEC) in 1971 – mining activity has suffered stagnation, and even decline. While petrol dollars dominate the economy, the National Bureau of Statistics lists solid minerals as contributing less than 1% of GDP, despite significant coal and iron ore reserves, and known deposits of gold, uranium, tin and tantalum.
But the vast potential of Nigeria's mineral wealth has not always been so ignored. Before the oil boom of the 1970s the economy was largely sustained by the exploitation of solid minerals. Coal and tin were among the natural resources mined on a massive scale, with the former being used to generate electricity, power the railway network and meet the demands of regional and international markets. Lead and zinc were a significant source of export revenue, and Nigeria was the world's largest exporter of columbite.
Stagnation in the solid minerals sector cannot simply be attributed to the meteoric rise of oil: poor management by state-owned enterprises – compounded by corruption and an incoherent exploitation of resources – has also played its part. International blue-chip mining companies have long since given the sector a wide berth due to its reputation for inefficiency, but this could be about to change. The federal government has acknowledged its potential as an alternative to the petroleum industry for foreign exchange earnings, and has set about revitalising its fortunes.
The rationale for Nigeria's renewed interest in exploiting its natural resources is simple. Mineral resources are the foundation upon which an industrialised economy is built, and industrialisation is essential if the country is to reduce over-dependence on the oil industry – an industry which, despite the revenue it generates, provides employment for just 6% of the Nigerian labour force. The government recognises that over-dependance on oil also leaves the economy vulnerable to international oil politics and fluctuations in oil prices.