Ogun, Kogi, top States with Highest Solid Minerals’ Revenue

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 The latest report from the Nigeria Extractive Industries Transparency Initiative (NEITI) has indicated that Ogun, Kogi and Cross River States received the highest funds from the sale of solid minerals in 2019, inclusive of 13 percent derivation.

According to the report, Ogun State received N301.8 million; Kogi got N239.5 million while Cross River got N114.2 million from the monies which were shared in May 2020.

In all, a total of N3.2 billion was distributed among the 36 states and the Federal Capital Territory (FCT) with Bayelsa, Ekiti, and Akwa Ibom receiving the least sums of N49.9million, N54.8 million and N57.4million respectively.

In terms of accruals from 13 percent derivation, the top three states, including Ogun, got N251.2 million; Kogi received N179.3 million while Cross River got N59.4 million.

In 2019, 43 mineral-buying centres were issued 325 licences to mine gold, with an official gold output quantity of 1,212.77 ounces estimated at N11.688 billion and a gross royalty payment of N6.46 billion by 31 companies.

Eight states produced 1,212.77 ounces of the mined gold in the country with Osun and Niger States contributing 70.3 per cent of the total production while Kwara came third with 14.74 per cent.

But aside from Ogun, Kogi and Cross River, Edo and Sokoto also joined in the overall minerals producing table with the three states extracting close to 75 per cent of the commodities produced in 2019.

Limestone was the biggest contributor to royalties paid to the government with 37.6 per cent, followed by granite aggregate, laterite, and granite dust and lead/zinc ore.

The top five minerals listed as having the highest exploration in the year under review were limestone, granite, laterite, lead/zinc ore, and granite dust.

In all, 74 private entities were engaged in mining in 2019 with the highest producing companies being Dangote, BUA International, Lafarge, Reynolds Construction, Julius Berger, Setraco and Mothercat among others.

According to the report, the top five countries which were Nigeria’s minerals export destinations were China, Poland, India, Vietnam and Germany.

Nigeria’s export to China included columbite, crude mica, fluorite, granite, manganese ore, silica and quartz sands, tin ore, zinc and lead ore as well as zircon sand.

Germany’s major import from Nigeria was lead ores and concentrates, India’s were zircon sand and crude mica, while Poland’s were also lead ores and concentrates.

Out of the 61 companies engaged in the export of mineral ores and concentrates in 2019, a total of 25 could not show evidence of paying royalty to the federation, amounting to a liability of N482 million.

“The disaggregated royalties by state shows that Ogun State-provided the largest share, contributing 25.94 per cent of the total royalty earned in 2019, while the lowest royalty was paid by Borno with 0.06 per cent contribution,” the report indicated.

By corporate entities, Dangote Cement Plc paid the highest royalty of 25 per cent to the government, followed by Lafarge, which was 12.7 per cent, Dangote Industries, 5.71 per cent, Julius Berger Plc, 4.31 per cent while Reynolds Construction paid 3.76 per cent of total royalties in the year under review.

While the total revenue generated by the federal government in 2019 was N10.2 trillion, the solid minerals sector’s contribution stood at N74.8 billion.

In terms of employment, local employees accounted for 54 per cent of the total workforce, African nationals were 39 per cent while expatriates’ employment quota stood at 5.1 per cent.

The report described the potential of solid minerals to enhance the economic development of the country as considerable, adding that mining, quarrying and processing activities as well as transporting of mineral products have a negative impact on both the environment and health of the miners.

It stated that there were instances of environmental degradation from the activities of artisanal miners who focus on ‘winning’ minerals such as gold, barites, tourmaline, zircon, lead, zinc.

A review of a recent visit to some communities in Nasarawa State by stakeholders, according to the report, showed environmental devastation as a result of the action of some operators in the sector.

NEITI further noted that a review of the activities of various companies operating in the sector showed that no company had carried out any mitigating programme in recent times as required by law.

“The Independent Administrator (IA) identified major channels through which environmental degradation occurs: there are those caused by construction companies wherein they leave behind borrow pits across the various landscapes.

“Also included are abandoned mine sites caused by quarrying and mining activities and those caused by artisanal and illegal miners,” the report added.

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