Dr Kayode Fayemi

Some retired miners wrote a petition to your ministry over non payment of their disengagement fees, have you addressed this?

Disengagement fees are not always in our hands. If you talk about severance payments, some of these legacy assets were handed over to BPE, and part of what they were meant to do was settlement of severance. So the proceeds from the sale of the companies will also form part of what is used to settle whatever outstanding obligation there was. Such factors ought to have been incorporated into the amount the company was sold for so that you will not short-change those that have been disengaged from the place. So what we are doing is discussing with the BPE to ensure that Nigerians who have worked get paid all their entitlements and they do so before it becomes an albatross around their necks. I do not think it is fair if somebody has worked for a company for thirty years and could not go away with his decent retirement package. But these are some of the grey areas, inadequacies that attended the privatization process in the past but government is a continuous one. We are responsible even though we are not the architect of the misfortune, if you want to call it that, but we are now in charge and we should try as much as possible to address this issue.

You have spent just a year and six months on this seat now, what can you point out as your major breakthrough?

Let me say first that we must not have exaggerated expectations. This is not agric for example. In agric, you can plant maize in January and expect to harvest by May or even earlier. Mining is long term business. I have talked to you in the course of this interview about the leakages that we have blocked, increases that we have seen in revenue generation, about the increase in funding in the sector, about the partnership with the states, things are happening, but they are not going to produce the kind of immediate results that Nigerians seem to be angling for. This is a sector that does not lend itself to quick fixes. Indeed, from exploration to production takes an average of 15 years. Unfortunately the political or the electoral cycle is not aligned with the mining cycle and saying this is not looking for an excuse for the sector from achieving the intentions or objective of the diversification strategy. There must be restrained optimism rather than exaggerated optimism in the sector.

Dr Fayemi (left) with officials of the ministry of Mines and Steel Development, during an inspection of ilegal sand mining sites in Lagos State recently

Nigerians should look forward to a much more legally controlled, regulated environment that would provide more jobs in the immediate for Nigerians and more revenue for the country because it is more a revenue diversification strategy rather than an economy diversification strategy. The Nigerian economy is fairly fully diversified at this point in time but mining is not contributing what it ought to contribute and we stated it in the road map that we want to move from the 0.3% contribution to GDP to at least 7 per cent in a period of fifteen years, by 2025. I believe that by the time Ajaokuta comes on stream, the time the bitumen goes into full scale production, by the time when coal for power generation takes off and contributes into power generation, Nigerians will begin to see the dividends of mining.

That is to say there is hope

Absolutely. There is a lot of hope. A lot of interest is focused on Nigeria and I am sure you heard and some major stuffs are happening, mining is about finding, discoveries and we had a major discovery recently in Kaduna, and that is something that has become of interest for geologists around the world. Given the quality of what is coming out of that particular find, who knows what will happen in other parts? Nigeria is largely a green field, as far as mining is concerned but we are also reawakening the brown fields, tin and columbite field for example, we are going back to those mines, to revive them and ceding to private sector investors and we are beginning to mine tin again on a large scale, we are exporting tin as I speak to you now. But we are encouraging the investors to set up local smelters in order to discourage the exportation of unprocessed minerals.

How promising is the gold deposit in Ilesha?

Very promising. One of the companies in Ilesha has managed to come up with figures of about 600,000 ounces per annum but they are just going into production. The result of the exploration is just being finalized so these things are happening gradually. That’s why government can come in, help them organize it, provide them with finance, research on the geological findings that are there and then support their activities with security, predictable regulatory environment, right incentives and then the right domestic market. Our priority now is industrial minerals that are more of locally consumed goods. We do not see why we should be importing 3.5 billion dollars of steel products into Nigeria every year, we do not see any reason why we should be importing 90 per cent of our granite and marble and ceramic tiles when we have everything that you need to produce these tiles in Nigeria.

Has the jinx on Ajaokuta been finally broken?

I think it is a governance challenge and anything that is a governance challenge all that we need is determination and focus. We need to do whatever it takes. You cannot put up an asset like that and let it go to waste, anyone who has been to Ajaokuta will know that the founding fathers had a great idea, what was faulty is the implementation strategy. That is what we need to correct. I believe that once we correct it, it is even going to promote other companies in the steel sector coming up in the private sector because we have a huge market. I mean over the last three months, because part of what I have to do is monitor the prices in the sector, the prices of goods in the mining sector and steel products, iron rods have tripled, and you can’t build without iron rods and you must build with iron rods that are standardized.

You have a lot of funny iron rod products out there mostly imported but not good quality. Prices have tripled because we are importing and because of the instability in the foreign exchange market, imagine if we are producing locally, the companies producing locally used to have a big challenge competing with iron rods and steel products from China, India from all over the place. So that’s why for us import substitution is one of the key strategies, the more we support local companies, the easier it becomes for us to save on the foreign exchange that we are using.

There was this woman from Kogi state who was complaining of the concessional agreement in Ajaokuta, saying that Nigerians were short-changed in the agreement and all that. What is the situation?

I don’t have any reason to want to respond to that. Frankly you know when people labour in ignorance, sometimes it is difficult for you to relate to what they are saying. I would like to say that she is a probably well-meaning Nigerian pursuing an interest in Ajaokuta but what she needs to do is find out precisely the details of what transpired in Ajaokuta. If she does, maybe she will change her mind if she is well meaning but if she has an agenda, no matter what you say it will not change anything. I am working for Nigeria and Nigeria is my primary responsibility, my principal knows precisely what we are doing in Ajaokuta, this government will not short change Nigerians for any reason.