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Nigeria: big miners stay away from Jos Plateau
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Written by Olly Owen in Jos   
Friday, 21 November 2008 13:52

 

Nigeria’s Jos Plateau, once the hub of a mining industry which fed European demand for tin through much of the 20th century, has a lot in common with post-industrial areas of the world. Unemployment has decimated a thriving working class which once supported two league football teams in a uniquely multi-ethnic city. In the surrounding countryside, abandoned mining equipment and rain-filled quarries litter a barren land, where waste dumps and gully erosion render much of the land unusable for farming.


 

After tin prices crashed and the multinationals left, the Nigerian government allotted funds for the rehabilitation of this land, but previous state governments embezzled most of it. Subsistence agriculture, livestock, and occasional vicious fights for the scraps of state patronage are the order of the day here now. Yet the world is still supposed to be in the throes of a commodities boom, with Chinese, Indian and Russian firms as well as European and American multinationals snapping up prospects on Africa’s mineral frontiers. So why is there no evidence of that on the Jos Plateau, amid some of the world’s richest deposits of valuable cassiterite and columbite?


 

Colonial Nigeria, while never a mining giant to rival Southern Africa, produced large volumes of coal and tin as well as gold and other minerals. At its height in the 1940s, spurred by demand from Britain’s war economy, the tin ore industry produced around 17,000 tonnes each year and employed 75,000 local and migrant labourers. More than 20 mainly European companies operated on the Plateau, using equipment such as giant drag-lines whose hulks can still be seen in the mining districts of Vom and Barkin Ladi. Solid minerals proudction by state, Nigeria

 


The tin mines’ downturn mirrors the story of the commodity decline across post-independence Africa; by the 1970s output had dropped drastically, and the entire mining sector had fallen by the wayside of an oil-centred economy. Energetic reformer Obiageli Ezekwesili, formerly Nigeria’s solid minerals minister and now World Bank vice-president for Africa, noted in 2004 that government mineral revenue had dwindled to only N81m ($692,000) by the end of the 1990s. Helped by world prices and reform efforts, it grew back to N300m ($2.5m) by 2004 – but much of that is likely to have come from large-scale quarrying and aggregates extraction for the booming construction sector (see graph).


 

Yet Jos Plateau’s mines are not completely silent. Digging continues apace today, only in the informal sector. Illicit dry-season mines employ labour from local villages; the workings range from tiny six-foot pits to extensive and often dangerous excavations in which as many as 5,000 people are employed.

 


In Jos town, mineral dealer James Dung sits behind a desk littered with pens, mineral samples and archaeological artefacts discovered in the workings. He is one of around 40 remaining licensed tin buyers, all small-scale, remaining in the city. Dung says the ancient belt-driven machines in the shed outside are sorting their way through the tailings of abandoned mines, with the refined output sold to Germany and the Far East. But producers admit that there is often an overlap between formal and informal production. Even in colonial times, many European tin dealers traded in ore stolen at night from competitors’ concessions; in the boom year of 1945, 10% of production vanished this way. There is a big incentive to turn a blind eye, too; tin prices more than quadrupled between 2003 and mid-2008, to $20,000 per tonne. The minerals are clearly there, then, and so are the international buyers; so something must be keeping multinational companies from engaging in the tin trade in Nigeria. 


 

“You only have to look at the experience of companies in the oil sector,” says Rolake Akinola, Nigeria analyst at the UK’s Control Risks Group, “and add to that the regulatory uncertainties and the dearth of institutional knowledge of the mining sector, to see that any new entrants would really be diving into uncharted waters.” While she was mining minister, Ezekwesili revised the legislation, commissioned a cadastral survey and digital register of mineral reserves, increased transparency and even organised forums with villagers in potential mining areas, in order to forestall community relations disasters like those which have sparked crisis in the Niger Delta’s oil industry. Her efforts were rewarded with some interest from mining multinationals, but this seems to have died down since her departure.

 


“Mining doesn’t seem to be at the top of the Yar’Adua government’s priorities,” says Akinola. But there’s also a more concrete infrastructural bottleneck – actually getting the product out would require huge new investment in missing infrastructure. Formerly, tin miners had the advantage of the Bauchi railway to shift their ores to world markets, but today this is in terminal disrepair and road remains the only (expensive) option for carrying bulk loads to port terminals. So for now, Nigeria’s proven reserves of 34 different commercial minerals continue to slumber beneath their hills like dormant giants or else dribble out through the informal sector. But for those willing to take the first bold step in a field virtually free from competition, the rewards could be unprecedented.

 

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