Mineral resource development in Nigeria -There is no doubt that Africa remains the center of world attraction largely because of its rich deposits of mineral resources. It contains one-third of the world’s mineral reserves. In fact, Africa has been ranked as the largest source of bauxite, cobalt, industrial diamonds, manganese, phosphate rock, soda ash and a host of other metals currently in high demand. The continent has attracted foreign mining firms to explore its rich mineral resources.
Historically, Africa has been the world’s go-to for mineral resources in the race towards technological and economic advancement. From the 19th century, Africa witnessed countries like Belgium, Portugal and Britain explore its rich metals and even went as far as colonizing the continent just to monopolize these untapped resources. Some historians have written that one of the major reasons for the Allied Force’s Victory in the Second World War was as a result of the minerals gotten from the lands of Africa. Countries like Gold Coast (Ghana) and Ivory Coast (Cote d’Ivoire) even got their names from the mineral resource present in their regions. The mineral resources on African lands even played major roles in the development of many African countries like South Africa and the Democratic Republic of Congo (DRC).
From the post-colonial period, interest in Africa’s mining industry began to increase. Non-colonial powers and large firms began to troop into Africa for minerals to feed their hungry industrial plants. Large economies like China, India, the US and Japan have become big-time importers of Africa’s precious metals. Despite this, Africa’s mining industry is said to be yet untapped.
As the world moves more rapidly towards technological advancements, demands for Africa’s mineral resources are also on the rise. With the increase in mass production of cars, machinery and plants, phones and batteries with their massive demands, Africa’s mining industry once again come to the spotlight. Despite these, Africa is yet to benefit fully from its mining industry. Only a few like South Africa have been able to maximize its mining industry. Weak decisions towards the sector’s development as well as poor infrastructure and financing are contributors to this. While DRC largely depends on its mining industry for 90% of its national income, Nigeria still sheds its weight on crude oil leaving the mining sector under-utilized.
Status and Trends
It’s no longer news how much the COVID-19 Pandemic affected every sector of Africa’s economy. The mining industry was not spared. Looking at one of Africa’s biggest mining industries- the South African mining industry, the impact can be seen. The lockdown restrictions in South Africa according to its Mineral Council projected an 8 to 10% fall. Reports show however that the South African mining industry is still robust and performing. Its total market capitalization increased to $59.7bn from $39.2bn in the previous year. As of June 2020, the South African mining industry had a total revenue increment of 4%. Also, gold mining companies saw a 35% increase in revenue. While production fell at the peak of the lockdown restrictions, production levels have since picked up following the ease of the lockdown restrictions.
In Nigeria, the location of Africa’s largest economy, the mining industry is still at its infant stages. Although, recent reports have revealed new developments towards developing the mining sector through gold projects as of October 2020. The Federal Government, in a bid to diversify the country’s economy, has called on investors to explore the untapped potentials of the mining industry. The country remains a choice destination to daring mining firms. With little competition in the hinterland where these minerals are, huge potential profits are likely to be gained. Reports also have shown that the few mining firms present in the country have quickly gained balance and are taking steps towards further exploration. These firms are also looking forward to establishing themselves as recognized brands in the industry.
More so, conversations on youth involvement in Africa’s mining industry have risen in the past months. According to Deloitte’s 2019 trend report, the African mining industry struggles with low interest among youths in joining the mining industry. The robust South African mining industry faces this challenge and fears that the younger generation’s low interest in mining will affect the future of the industry. On the other hand, the Nigerian mining industry has the potential of absorbing a significant number of unemployed Nigerian youths if developed.
Lastly, the mining industry is also dealing with global shifts in technology and the rising environmental issues which will determine its growth in the nearest future.
Mineral resource development in Nigeria