Nigeria is expected to generate 1000 mega watts of electricity from coal by year 2020 to supplement other sources of energy currently in use in the country. Dr. Kayode Fayemi, Minister of Solid Minerals Development, disclosed this at an Economic Summit organised by the New Telegraph newspapers with the theme, “Nigeria: Beyond the Oil Economy”, in Lagos last week. Also, the diversification of the nation’s economy has been yielding positive results, with the country earning about N400 billion from solid minerals in 2015, according to the Central Bank of Nigeria (CBN).
Fayemi noted that a significant opportunity exists for power generation from coal exploration in the country.
He said the Ministry of Solid Minerals Development is collaborating Ministry of Power, Works and Housing to ensure that huge coal deposit in the country is explored to meet some of its energy needs.
“Coal production started in Nigeria in 1902 and it was the main energy source for our country until 1960, and coal is in about 19 states of the federation stretching for about 800 kilometres. Coal exploration offers a significant opportunity for power generation and one of the efforts that we are making now in partnership with the Ministry of Power, Works and Housing is ensuring that coal forms a significant part of the energy needs.
I know there are people who are worried about climate change and the implication of coal on that. But even coal can achieve clean coal environmental standard and we believe that about 1000 mega watts of electricity can be generated from coal by the year 2020.
And these are plants that are going to be sited near the areas where the reserves are, across the country.” Mining reforms Speaking on “Digging Deeper for New Wealth: Opportunities from Solid Mineral Resources”, Fayemi remarked that some reforms arising from Nigerian Mining and Minerals Act 2007 have created a platform for a robust private-sector-led mining industry in the country. “The mining sector has been with us since 1902.
From the early operations of the geological surveys emerged entities such as the Nigerian Mining Corporation, Nigeria Coal Corporation and the National Steel Company.
And during this period, mining was a major contributor to Nigeria’s revenue base and was a leading employer of skilled and unskilled labour. But we then lost it, we forgot all about mining, and the Indigenisation Decree, particularly in 1972, contributed to the demise of mining in the country.
Because that’s when most of the expertise that we had in mining, which was essentially foreign, mostly British, left the scene, and we lost our tracks as far as mining was concerned. But following some reforms which started in 1999, which essentially crystallised around the Nigerian Mining and Minerals Act 2007, Nigeria is once again on the path to providing a transparent and workable regulatory and policy environment for more robust private-sector led mining.”
Banks don’t understand mining The minister however noted that one of the major challenges confronting the mining sector is finance, asserting that the banking industry does not understand mining.
“Less than one percent of the loan that is on offer in the banking sector goes to mining. In fact, our banking industry does not understand mining at all. Apart from the Bank of Industry (BoI) that has now started some work in this regard, only 2 banks in this country have mining desks – Stanbic IBTC and First City Monument Bank (FCMB).
On becoming minister, I had to go the Bankers Committee to talk to all bank MDs, courtesy of the CBN governor, to encourage them to set up mining desks in their banks and also get involved in similar interventions schemes which exist in agricultural sector but does exist in mining yet, it will come.
We are determined to have funding structures that can support genuine mining, and over the course of the next 6 months a lot more will be heard of what we are doing in this sector. But banks are also showing interests because they see that it is a priority area for the government,” he stated.