By Ikenna Omeje, Jerome Onoja
Most of the Barite mining in Africa takes place in South Africa where there are barite mining facilities in seven provinces: Gauteng, KwaZulu Natal, Northern Cape, North West Province, Mpumalanga, Free State, Limpopo, and Gauteng. However, large barite deposits which have been discovered in Nigeria, in the states of Benue, Nasarawa, Taraba, Plateau, and Cross River are now being produced in commercial quantity as the country is set to ban importation of the chemical in 2022. Meeting demand for barite in the oil industry is a primary target of Nigeria’s new policy for the mineral.
This write up looks into the this new policy and examines its potential effects across Africa.
Despite Nigeria having abundant deposits of barite, the country’s oil and gas industry has relied majorly on imported barite for drilling operations. This has not only led to capital flight but has denied the country of revenue and other benefits if the material was sourced locally. The success of every drilling operation is dependent on the properties of the drilling fluid used to drill wells. Barite is used as a weighting agent during the preparation of drilling fluid.
The Nigerian oil and gas industry is the mainstay of the country’s economy and continuous effort is being made by the Federal Government and its agencies to retain more industry spend in-country. One of the ways to retain a good chunk of this nation’s industry spend – is an investment into the local production of barite, which the country annually spends N5bn importing. This is why the current revolution taking place in the barite sector is getting commendation from industry experts.
According to a study titled “Characterization of Barite Reserves in Nigeria for Use as Weighting Agent in Drilling Fluid” published in the Journal of Petroleum Exploration and Production Technology in April this year, more than 80 per cent of barite produced globally is used as a weighting agent in drilling fluids.
Although it is estimated that there are about two billion tonnes of barite reserves globally, only 740 million
metric tonnes have been identified. The study revealed that in 2018; China, India, Kazakhstan, Morocco, Thailand, the United States, Turkey, and other countries produced 9.5 million metric tonnes worth $2.688bn.
Further details showed that the brown barite market generated revenue of $806.4m, residual deposit barite generated $860.2m, barite 4.3 generated $645.1m, while oil and gas industry barite generated $564.5 million.
The study noted that amid the fact that Nigeria has the fourth largest deposit of barite in the world, with estimated reserves of over 21 million metric tonnes, the country is not globally recognized as one of the largest producers of barite for drilling activities and other industrial applications.
The study listed the factors behind why Nigeria’s huge barite deposits remain untapped: unregulated importation of unprocessed barite ore; limited access to the barite mining site and high-quality barite ore grade; the absence of mechanized mining companies; unregulated artisanal and small-scale mining (ASM) activities; and the lack of industry-institution-government collaboration among the oil and gas industries, research institutes, and local barite producers.
The findings of the study, which assessed the local processing methods of barite and examined the crude and on-the-site processed barite’s physio-chemical properties, and compared these parameters with American Petroleum Institute (API) and Department of Petroleum Resources (DPR) standards showed that “… on-the-site beneficiated barite has 87.79 per cent BaSO4, 6.66 per cent silica, 0.03 per cent total soluble salt, 1.39 per cent Fe2O3, and 1.603 per cent heavy metals. Chemical analysis indicated that the pH, moisture content, metallic content such as Calcium, Lead, Zinc, Magnesium, Copper, and Cadmium minerals, and extractable carbonates were within the standard specified for usage as a drilling fluid weighting agent. The analysed crude barite samples were basic, within the pH of 8.3 and 8.6. Locally processed barite has lower Fe, Pb, Cd, and Cu content compared to industrially accepted barite.”
Although it is estimated that there are about two billion tonnes of barite reserves globally, only 740 million metric tonnes have been identified.
Nigeria’s Barite Importation
The study also revealed that in 2020, barite importation into the country represented 3.6 per cent of total industrial minerals importation with an estimated consumption of 440,000 metric tonnes, valued at $96m.
Speaking at a workshop organized by the Nigerian Content Development and Monitoring Board (NCDMB) in 2018, the Executive Secretary of the Board, Engr. Simbi Wabote said that the oil and gas industry in the country spends $35m annually on the importation of barite, adding that optimal production and utilisation of locally produced barites in oil and gas operations will create jobs and stem capital flight.
Since 2011, there has been an existing policy on the ban of barite, but the Federal Government has not been able to effectively enforce the ban because the local barite supply chain cannot guarantee a sustainable supply of the commodity.
The Committee on Waiver of the Ban on Import of Barite and Bentonite, in its report submitted to FG in 2013, stated that Nigeria had a shortfall of 31,318.65 tonnes of barite, as against domestic demand of 70,590 tonnes. The committee put the domestic production level of barite at 39,181.35 tonnes.
As a result of this obvious inadequacy, oilfield service companies, argued that local production struggled to meet API specifications as well as demand volumes, leading to the oil companies applying for the barite import ban to be lifted, which the Federal Government subsequently granted in 2014.
Enr. Simbi Wabote
amid the fact that Nigeria has the fourth largest deposit of barite in the world, with estimated reserves of over 21 million metric tonnes, the country is not globally recognized as one of the largest producers of barite
Barite importation into the country has mainly been sourced from China, the United States, the United Kingdom, and The Netherlands. In 2015, a total of 17,406 tonnes of barite was imported into the country
Receiving the National Integrated Mineral Exploration Project (NIMEP) preliminary report in October, the Minister of Mines and Steel Development, Olamilekan Adegbite said that Nigeria spends $300m yearly on barite importation, noting that the imported barite was used in the oil and gas industry
However, the Federal Government and its agencies, as well as some oil and gas companies operating in the country, are currently making commendable efforts to close the demand-supply gap. These efforts being made to change the status quo can only succeed if there are scientific data and information that enable informed decisions to regulate players along the barite value chain. Some of these efforts include that of the Raw Materials Research and Development Council, NCDMB, Nigerian Geological Survey Agency, Federal Ministry of Mines and Steel Development and activities by the private sector from organisations like the Barites Miners and Processors Association, Total Plc, etc
Adegbite said the ministry is doing quality control on barites being produced and getting entrepreneurs to develop a robust bagging system that would meet international standards. “This process is to satisfy our local industries, oil and gas and also export the product to our neighbouring countries such as South Africa and Ghana that just discovered oil,” he added.
On the NIMEP report presented by two contractors handling gold and barite exploration to the ministry, the minister expressed satisfaction, saying that it indicated that Nigeria was on the right track in mining. “Mining is all about data. We cannot do mining without data. With the exploration done by these contractors, we are de-risking the sector and we will be able to attract the right investment into the country,” he said.
NIMEP is a project designed by FG to carry out integrated exploration to de-risk the Nigerian mining sector and provide geoscience data to key into minerals needed for the fourth industrial revolution. The objectives of NIMEP is to generate geoscience information in Greenfield and Brownfield settings through integrated exploration methodologies and is aimed at spurring desired investment into the sector, generating foreign exchange, among others.
Chemical analysis indicated that the pH, moisture content, metallic content such as Calcium, Lead, Zinc, Magnesium, Copper, and Cadmium minerals, and extractable carbonates were within the standard specified for usage as a drilling fluid weighting agent.
NCDMB Efforts to Encourage Local Production of Barite
In 2018, Wabote at a workshop in Port Harcourt, Rivers State, organised by NCDMB and attended by miners, representatives of Rivers State, international operating companies, service companies and other key stakeholders, directed the development of a new framework that would promote optimal production and patronage of locally produced barite in oil and gas operations, to be developed by the Board in conjunction with the Association of Miners and Processors of Barites (AMAPOB).
In line with the Board’s plan to build capacities and turn some serious players into world-class manufacturers of barite, he invited serious players in the barites value chain to approach the Board with bankable proposals, which could be funded through the Nigerian Content Intervention Forum (NCI Fund).
“…from the inception of the Board in 2010 to date, the issue of utilisation of Nigerian barites has been on the table and significant milestones have been achieved with the active collaboration and support of key industry players. As a matter of urgency, we must move to the next level by ensuring utilisation of local barites,” he said.
“Being a development agency the Board invested in a modular refinery; we are also ready to partner with good investors to ensure local production of barites.”
After the directive by Wabote, the NCDMB unveiled guidelines on the use of locally manufactured barites within the oil and gas industry.
Unveiling the Guidelines at an event in presence of operating and oil service companies and some drilling fluid companies in Abuja, Wabote, represented by the Director, Planning, Research and Statistic, Patrick Obah said, ”With the approval and implementation of this guideline on the use of imported
the oil and gas industry in the country spends $35m annually on the importation of barite,
barite in the oil and gas industry will no longer be supported by the Board. We will work with the industry to ensure the rapid actualization of measures required to enforce a total ban of the use of imported barite and drilling fluids in the Nigerian Oil and Gas Industry in line with the provisions and aspirations of this Guideline and the NOGICD Act of 2010.”
The guidelines set out to support the capacity and capabilities of Nigerian companies involved in the production, procurement, supply and utilisation of the products and are expected to also attract investments to the Barite and Drilling Fluids Supply Value Chain, the Nigerian oil and gas industry and the mining sector of the Nigerian economy. Its implementation date became effective January 1, 2020.
Meanwhile, the Board, earlier in June this year announced that it has approved four firms for the supply of barite required for any drilling project or contract in the country’s oil and gas industry.
The beneficiary companies include four barite processors. They are Nishan Industries Limited in Port Harcourt, Rivers State; Delta Prospectors Limited in Lafia, Nasarawa State; Ana Industries Limited in Port Harcourt, Rivers State and Baker Hughes Company Limited at Onne, Port, Rivers State.
In a public notice signed by Wabote and dated May 27, 2021, the Board stated that all project promoters in the Nigerian oil and gas industry are to ensure that barites required for any project are procured only from the approved Nigerian Barites processing companies with Category A Nigerian Content Equipment Certificate (NCEC).
SPDC drilled over 600 wells in 2001 using Nigerian bentonite
It also listed 10 other companies that “have also been identified and shall be upgraded to Category A NCEC, as soon as they meet the requirements of the Guideline for the Utilisation of Locally Produced Barite and Drilling Fluids in Nigerian Oil and Gas Industry.”
Some of the consequences of violating the guideline include the refusal of the Board to issue Certificate of Authorisation to the operator, project promoter and contractor; Refusal of the Board to participate in the Operator`s Tender or issuance of Nigerian Content Compliance Certificate (NCCC); and Denial of the issuance of Nigerian Content Equipment Certificate for the production and supply of locally produced barite and drilling fluids in Nigeria’s oil and gas industry for a period to be determined by the Board.
Shell Petroleum Development Company (SPDC), which is known for its support in building local capacity and capabilities, is reputed to have heavily supported the growth of locally-manufactured chemicals in the past. According to a study by Okorie E. Agwu, et al in 2015, titled, “A Review of Nigerian Bentonitic Clays as Drilling Mud”, SPDC drilled over 600 wells in 2001 using Nigerian bentonite. That is a feat being expected with barite once all the boxes are ticked.
However, researchers have been in unison in their submission that the Nigerian bentonitic clay is predominantly Calcium based and that it requires some measure of beneficiation to be effective for use as drilling muds.
Some editions of Nigerian Content Day organised by Shell, towards capacity building, in recent times have seen the oil major in talks with the Association of Miners and Processors of Barite in Nigeria (AMAPOB). Expectations are high as regards the possible outcome from such engagements.
Apart from the efforts being made by Shell, the Federal Government and its agencies, other International Oil Companies (IOCs) are also doing a lot to step up investment in the mining of barite in the country in order to cut down money spent by oil and gas firms on the importation of the raw material, which is available in Nigeria.
Among the companies currently investing in the commercial mining of barite is Total Exploration and Production Nigeria Limited (now Total Energies), which entered into an agreement with the African University of Science and Technology in 2019, to execute a study on the commercial viability of the resource in Taraba State.
Also, the company and the University of Port Harcourt have surveyed Cross River and Benue States to establish reserves for acreages to attract both local and foreign investors. The company would have made huge successes in Nasarawa and Zamfara States, but for security challenges.
Similarly, in December 2016, Chevron Nigeria Ltd supported barite miners in Benue State with earth-moving equipment worth $1.284m in line with the company’s
efforts to increase Nigeria’s barite supply capability.
The company also buys barite directly from members of the AMAPOB including a 700 tonnes purchase order awarded to Qualchem Nigeria Ltd.
Based on available data, barite is found in Benue, Nasarawa, Plateau and Cross Rivers states. Cross River State alone has estimated reserves of about 11 million tonnes of barite. The commodity can be found in commercial quantity in Obubra, Yala, Biase, Ikom, Yakurr and Obanliku local government areas of the state.
FG Launches Made in Nigeria Barite
In October, the Federal Government launched Made in Nigeria barite for the oil industry. Speaking at a press conference before the launch, the Minister of Mines and Steel Development, Adegbite, said that the launch will save the $300m Nigeria spends annually on barite importation.
He said: “What we are doing today is a major milestone along with the roadmap that was created in 2016 and 2017. Barite is a material used in the oil industry and Nigeria has barite all over the country, especially in Benue, Taraba, Adamawa, Nasarawa, Plateau, Borno, Gombe and Cross River States.
“The process has always been processing our raw ore to industrial-grade that would be useful for the industry, and it is not limited to barite alone.
“We have that in so many other minerals. We are coming up very shortly with a council called the ‘downstream policy’ that would discourage the exportation of raw ore from Nigeria.
“We are saying that there should be some sort of beneficiations to any mineral that is mined in Nigeria before being exported. This will of course create opportunities for investors who necessarily want to get into mining but can start processing plants.
“What we have done here since we came into office is to take our barite as a strategic material, take it from the mines to the market, and without being immodest I will say, we thank God for the success we have achieved.
“We will be launching proudly made in Nigeria barite as being produced to American Petroleum Institute, API, Standard, and they set the standard for the oil industry. We have 50 bags as samples that have been produced and labeled proudly made in Nigeria.
“What we have done as a Ministry is to create linkages from the mines to the millers and from the millers to the baggers and of course to the market, and then we have the end product which is API Standard. Nigeria has been spending $300m annually importing barite into the country, effectively this will stop,” the minister stated.
They are Nishan Industries Limited in Port Harcourt, Rivers State; Delta Prospectors Limited in Lafia, Nasarawa State; Ana Industries Limited in Port Harcourt, Rivers State and Baker Hughes Company Limited at Onne, Port, Rivers State.
Adegbite also noted that to rapidly develop the barite industry the ministry will approach the Federal Executive Council (FEC) to protect the industry, which will be to “outrightly ban the importation of barite that is one way, and also Council may choose tariff protection for the local barite.”
He also said, “Now Nigeria is ready to supply the local market of barite and also to export to other oil-producing countries around us; Ghana, South Africa where we can export our barite.
“Not just only conserving our foreign exchange for Nigeria but also earning foreign exchange thereby through the exportation.”
Performing the barite launch in Port Harcourt, Rivers State, in company with the Minister of Mines and Steel Development, Adegbite, and the Minister of State for Mines and Steel Development, Dr Uche Sampson Ogah, Wabote announced that imported barites would no longer be allowed for use by the Nigerian oil and gas industry from 2022.
He noted that the utilization of locally produced barites and drilling fluids in the Nigerian oil and gas industry was in line with FG’s commitments towards maximum optimization of local content and diversification of the Nigerian economy and would create huge value addition and opportunities to drive the sustainable and competitive growth of the Nigerian economy.
The NCDMB boss charged the ministry and barite miners to focus on the improvement of the Health and Safety Practices at the Mines, Optimal Barite Production in volumes and to the required specification and availability of accurate geological data, adding that first and exclusive consideration will always be given to locally produced goods and services in line with the provisions of the NOGICD Act.
Total Exploration and Production Nigeria Limited (now Total Energies), which entered into an agreement with the African University of Science and Technology in 2019, to execute a study on the commercial viability of the resource in Taraba State.
According to the data Majorwaves obtained from the Ministry of Solid Mineral Development, currently, 10 companies are mining and exploring barite in Nigeria. These companies that operate in five states, which include Benue, Bauchi, Ebonyi, Jigawa, Niger, and Nasarawa, have small scale mining leases, with expiry dates ranging from July 2021 to December 2029.
Extended Uses of Barites – other Industries
Once the locally produced barite saturates the demands in Nigeria’s oil industry, it can be applied to other sectors of the economy, as well as exported to other countries. Because of its chemical properties and high specific gravity, barite is used for a range of industrial, medical and manufacturing applications. This mineral has many uses beyond the oil industry. It is used for manufacturing of paints and for medical applications.
– Plastic Industry
Although the global plastic market size is valued at 579.7bn billion in 2020, Nigeria is expected to cross the 513,000 tons in production by the same year. Barite is used in the Plastic Industry as the filling of plastic to create colorful plastics. Barite is used for this purpose because it is very effective in improving the abrasive strength, stiffness and intensity, thereby making it stronger in strength and attractive in appearance.
– Paper-Making Industry
According to the United Nations COMTRADE database on international trade, Nigeria’s imports of paper and paperboard, articles of pulp, paper and board was put at $696.51mn during 2020. Infusing locally manufactured chemicals into the industry could drag the numbers down significantly. Barite is used in the papermaking industry because of its pure whiteness. White paperboards and coat paper are filled with high-refined barites powder in order to improve the whiteness of the product and also increase the percentage of coverage, thereby giving it a pure white look. Barite is also applied as a pigment in paints and as weighted filler for paper, rubber and cloth. Playing cards has barite inserted between the paper fibers giving the paper a very high density that lets the cards to be “dealt” easily to players around a card table.
The worth of Nigeria’s paint industry is projected to hit $377 mn (N135. 80 billion) by 2025. Again, barite is quite useful here. Barite is a replacement to basofor, crypton, titanium dioxide, and monox which are used for filling. It is very useful in regulating the thickness of the paint. It is also very effective in increasing the stability of the paint and adding more brightness to the color. It has a clean whiteness that makes it very efficient as an extender for primers. It is highly useful in giving smoothness to the undercoats and chemical resistance to the walls, thereby ensuring beautiful smooth walls. As it is insoluble in water, It has high resistance to acids, alkalis and high bulk density and high refractive index, which makes it all the more useful in the paint industry.
– Rubber Industry
Costs in the rubber industry can be reduced to a certain level by using the barites mineral about less than 500 mesh for filling the rubber product making the product water proof. As to increase the life of the rubber product and also increasing the durability, barite is being utilised. It also increases the strength of the product and makes it resistant to acid and alkali.
– Cosmetics Industry
Because of its gentle and mild effect on the skin, barite it is very popular in the cosmetics industry. It is widely used in the cosmetics and a wonderful substitute to titanium dioxide.
– Pharmaceutical Industry
In the pharmaceutical industry, barite is used as barium meal material for stomach and intestines reflections. An added important usage of barites in pharmaceutical industry includes in order extending the time limit of the plaster, it is used for filling of plaster and dope. Barites are also very effective in blocking x-rays and gamma-rays emission in hospitals, power plants, and laboratories. Barite is also utilized in diagnostic medical tests. Before taking an X-ray, if a patient is given a small cup of liquid that contains barium powder with the consistency of milkshake, the liquid will cover the patient’s esophagus. Immediately after the “barium swallow” once the patient takes an X-ray of the throat, they will get an image the soft tissue of the esophagus since the barium is opaque to x-rays and blocks their passage.
Chevron Nigeria Ltd supported barite miners in Benue State with earth-moving equipment worth $1.284m in line with the company’s efforts to increase Nigeria’s barite supply capability.
Further Multiplier Benefits
Between now and 2050, more than half of the global population growth is expected to occur in Africa. The continent has the highest rate of population growth among major areas. According to the United
Nations, the population of sub-Saharan Africa is projected to double by 2050.
“A rapid population increase in Africa is anticipated even if there is a substantial reduction of fertility levels soon. Regardless of the uncertainty surrounding future trends in fertility on the continent, the large number of young people who will reach adulthood in the coming years and have children of their own, ensures that the region will play a central role in shaping the size and distribution of the world’s population over the coming decades,” the UN said.
Experts have interpreted that this implies increased demand for energy resources, and in the last 10 years, hydrocarbons have been discovered in several African countries. Africa is suffering from energy poverty with a significant number of its population lacking access to electricity and clean cooking fuel.
Several African countries have maintained that they will use their God-given resources – hydrocarbons – to meet these needs. So, if African countries continue to explore and produce oil and gas, despite the push towards energy transition, then Nigeria as the 4th country with the largest deposit of barite, has a huge market to supply.
Speaking recently at an event in Lagos on the opportunities that could be realized by the Nigerian oil and gas industry against the African Continental Free Trade Agreement (AFCFTA), Wabote stated that the African oil and gas landscape provides huge opportunities for cross-border infrastructure to unlock the development of stranded assets or bring energy closer to the people and also lead to lower unit development costs.
Barite E-Market Place
According to Adegbite, the Ministry of Mines and Steel Development would set up a marketplace portal that would connect all stakeholders along the barites value chain to a hub that allows easy coordination, stocking, effective costing and the seamless sale of barites. He added that the ministry would coordinate the process and ensure that appropriate revenues from the process are remitted to the government.
He explained that the launch of made in Nigerian barites would increase the government’s revenue through royalty payments and conserve foreign exchange spent previously in importing barites. He noted that the development would also create jobs, especially in local communities where barites were mined and processed and earn the country some forex when the mineral gets exported.
With increasing activities in the oil and gas space in the recent months, which saw the price of Brent crude, the global oil benchmark, jump to over $80 per barrel, more drilling activities are expected in 2022. This means more demand for barites.
“It is time to promote indigenous African exhibitors for our conferences, to take advantage of a ripe energy market on the continent. Oil markets have stabilised with demand now expected to reach pre-pandemic levels in 2022. According to OPEC projections, after the recovery, global oil demand is expected to grow further to 104.4 million barrels per day by 2026,” said the Chairman of the International Association of Drilling Contractors (IADC) Nigeria chapter, Chukwudi Enwereji at the association’s 10th yearly general meeting which was held in Lagos recently.
“In the wider energy perspective, oil will remain the number one fuel in the energy mix until 2045. Even though wind and solar energy will see by far the highest growth in this time frame, questions around evolving policies and technologies mean that the long-term energy outlook remains uncertain.”
He further said, “As oil prices rally around the $80 per barrel mark, we are set to see activity loaded 2022. There is a slight increase in the number of active rigs within the country. We have moved from 10 active rigs in February to 16 active rigs at the end of August 2021. As the first vaccine rollout was largely successful, most organizations have gone back to work.
Barite is a material used in the oil industry and Nigeria has barite all over the country, especially in Benue, Taraba, Adamawa, Nasarawa, Plateau, Borno, Gombe and Cross River States.
“We have 10 jack-up rigs in the shallow water space, three of them are active, one more is set to commence work by December this year, while about five Jack-up rigs are on standby with one stack. The swamp market has a total of 12 rigs in the country with two active rigs, three on standby and another seven stacked. In the deepwater space, we have only one active drillship in-country.”
Out of the $20.4bn industry spend on key projects between 2016 and 2020 in the Nigerian oil and gas industry, 42 per cent local content was achieved, according to NCDMB. With the ban on imported barite, effective 2022, it is believed that this will avail the Nigerian Content index a huge boost thus moving the nation closer to NCDMB’s 70 per cent mark by 2027.
As regards exporting the mineral to neighbouring African States, the gas-rich nation is expected to enter a league of its own where its only rival is perhaps South Africa. One can only imagine the huge dividends from the largely untapped AfCFTA market which is estimated at $3 trillion in combined GDP.