–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)
