Nigeria expects its mining sector to account for 3% of GDP over the next five years from just 0.3% currently as the government seeks to diversify the economy away from oil, the minister for mines and steel development said on Wednesday.
Olamilekan Adegbite said he expects “exponential growth” in the mining sector, with gold, lead, zinc, limestone and coal among seven strategic minerals identified for investment.
He said the West Africa nation had already attracted $600 million to develop an iron ore project from African Natural Resources and Mines, the largest single mining investment in years.
Nigeria has been trying to boost the sector as part of efforts to diversify its economy. But insufficient geo-data, weak infrastructure and limited enforcement of regulations has held the industry back.
“The short-term goal…is to raise the contribution of the mining sector from 0.33 percent to 3 percent within the next five years,” Adegbite said.
“We’ve seen steady growth … and we’re now poised for exponential growth as investments start crystallising,” he told Reuters on the sidelines of an African mining conference in Cape Town.
Africa’s largest economy has largely untapped deposits of minerals including gold, tin and zinc but some 80 percent of mining is carried out on an artisanal basis. Gold in the northwestern state of Zamfara is routinely smuggled out of the country illegally to neighbouring Niger and Togo.
Adegbite said the government would require mining companies to sign agreements with local communities, who remain unhappy with a perceived lack of development and benefits, before investing.
“We’ve learnt our lessons from the oil industry and we’re not repeating that mistake, so one of the major fundamental requirements before you can do anything in Nigeria is local community agreements,” he said.