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Historical Mining Operations in Nigeria: A Comparative Analysis with Other African Nations and Leading Mining Countries

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By Engr Alexander Elemo, MNSE, FIEAust, CPEng, BSc(Hons)Eng Unilorin (Nig), M.Eng/Eng Mngt UniSA (Aus) & MBA AIB (Aus)-

*Photo:Engr Alexander Elemo*

Nigeria’s mining sector has a rich history, dating back to the early 20th century. The country is endowed with a variety of mineral resources, including tin, columbite, coal, and gold. However, over the decades, the sector’s contribution to the national economy has been minimal, especially when compared to other African nations and leading mining countries globally. 

Historical Overview of Nigeria’s Mining Sector 

In the early 1900s, Nigeria was a significant exporter of tin and columbite, primarily from the Jos Plateau. Coal mining also commenced in Enugu in 1916, serving as a major energy source for the country. However, the discovery of oil in the late 1950s shifted focus away from solid minerals, leading to a decline in mining activities. By the 1970s, the mining sector’s contribution to Nigeria’s Gross Domestic Product (GDP) had dwindled significantly. 

Comparative Analysis with Other African Countries 

While Nigeria’s mining sector experienced a decline, other African countries capitalized on their mineral wealth. For instance, South Africa has been a leading producer of gold and platinum, with the mining industry contributing approximately 8% to its GDP as of 2023. Similarly, Botswana’s diamond mining sector has been a cornerstone of its economy, contributing about 20% to the GDP. 

In contrast, Nigeria’s mining sector contributed less than 1% to the national GDP in 2023. This stark difference underscores the underutilization of Nigeria’s mineral resources compared to its African counterparts. 

Top 25 Mineral Deposits Contributing to African Countries’ GDP

Country

Mineral Resource

Average Mineral Rents as % of GDP (2016-2020)

Democratic Republic of Congo

Cobalt, Copper

18%

Sudan

Gold

19%

Mali

Gold

16%

Guinea

Bauxite

15%

Zambia

Copper

12%

Botswana

Diamonds

10%

Namibia

Uranium

8%

Ghana

Gold

7%

South Africa

Gold, Platinum

8%

Tanzania

Gold

6%

Zimbabwe

Platinum, Gold

5%

Mauritania

Iron Ore

4%

Niger

Uranium

3%

Burkina Faso

Gold

3%

Mozambique

Coal

2%

Angola

Diamonds

2%

Sierra Leone

Diamonds

2%

Liberia

Iron Ore

1.5%

Madagascar

Nickel

1.5%

Eritrea

Gold

1%

Central African Republic

Diamonds

1%

Gabon

Manganese

1%

Ethiopia

Gold

0.5%

Uganda

Gold

0.5%

Nigeria

Tin, Limestone

0.3%

Source: World Bank Data on Mineral Rents (% of GDP) July, 2023

Global Perspective 

Globally, countries like Australia and Canada have robust mining industries. Australia’s mining sector contributes around 10% to its GDP, driven by the extraction of coal, iron ore, and gold. Canada’s mining industry is also significant, contributing approximately 5% to the national GDP. These countries have developed comprehensive mining policies, infrastructure, and technologies that have bolstered their mining sectors. 

Current Trends in Nigeria’s Mining Sector 

In recent years, there has been a renewed focus on revitalizing Nigeria’s mining industry. The government has implemented policies aimed at diversifying the economy away from oil dependency. Initiatives such as the Roadmap for the Growth and Development of the Nigerian Mining Industry, introduced in 2016, aim to address challenges and promote sustainable growth in the sector. 

KPMG 

Despite these efforts, the sector’s growth has been gradual. According to the Nigerian Mining Sector Watch, the mining industry’s contribution to GDP was approximately NGN 127 billion in 2021, reflecting a modest increase from previous years. 

Top 25 Minerals and Their Contribution to African Economies 

Africa is rich in mineral resources, with certain minerals significantly contributing to the GDP of various countries. The top minerals include gold, diamonds, platinum, copper, and uranium. For instance, gold mining is a major contributor to the economies of Ghana and South Africa. Diamond mining is pivotal in Botswana and Namibia. Copper mining is central to Zambia’s economy. However, specific data on the contribution of these minerals to the GDP of the top 25 African countries over the last five years is limited. 

Top 15 Mining Companies in Africa 

Africa hosts several leading mining companies that play a crucial role in the continent’s economy. The following are the top 15 mining companies operating in Africa, along with their annual production of precious metals, revenues, and profits after tax:

Company Name

Country of Origin

Precious Metal Production (oz)

Revenue (USD Billion)

Profit After Tax (USD Billion)

Anglo American Platinum

South Africa

2.5 million

10.0

2.0

Gold Fields

South Africa

2.2 million

4.0

0.8

Sibanye Stillwater

South Africa

1.8 million

5.5

1.1

Harmony Gold

South Africa

1.5 million

3.5

0.7

Impala Platinum

South Africa

1.4 million

6.0

1.2

African Rainbow Minerals

South Africa

1.2 million

2.5

0.5

Barrick Gold

Canada

1.0 million

12.0

2.5

Newmont Corporation

USA

0.9 million

11.0

2.2

Glencore

Switzerland

0.8 million

215.0

4.3

Rio Tinto

UK/Australia

0.7 million

44.6

9.8

BHP Group

Australia

0.6 million

42.9

8.0

Vale S.A.

Brazil

0.5 million

40

Leading mining companies in Africa based on market capitalization as of December 2023(in billion U.S. dollars)

Conclusion 

Nigeria’s mining sector holds immense potential that remains largely untapped. Drawing lessons from other African nations and leading mining countries, Nigeria can implement strategic policies, invest in infrastructure, and foster a conducive environment for mining activities. By doing so, the country can significantly enhance the sector’s contribution to the national economy, promoting sustainable growth and diversification. 

Feel free to send your questions to our email at theminersng@gmail.com & reach out to us with your business enquires on our mobile number +234 906 043 3349.

*Watch out next week Thursday for another well informed article by Engr Alexander Elemo, MNSE, FIEAust, CPEng, BSc (Hons)Eng Unilorin (Nig), M.Eng/Eng Mngt UniSA (Aus) & MBA AIB (Aus)

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