Solid Minerals: Illegal Mining; Massive Losses

backgrounds Nigeria’ solid minerals sector accounts for a mere 1 percent of the nations Gross Domestic Product (GDP). But every state in the country has solid mineral deposits. Iron ore which can last a hundred years lies in Konkosso, Niger State. These deposits are said to surpass that of Ajaokuta in terms of quality. Not […]

backgrounds

Nigeria’ solid minerals sector accounts for a mere 1 percent of the nations Gross Domestic Product (GDP). But every state in the country has solid mineral deposits. Iron ore which can last a hundred years lies in Konkosso, Niger State. These deposits are said to surpass that of Ajaokuta in terms of quality. Not far from Borgu is a feldspar deposit which has been estimated to last 40 years before it is exhausted. Feldspar is used to make glass. The country is blessed with Tantalite, an element so critical to mobile phone technology. In Hayin Kanwa, a little neglected village near Zaria, a villager tells this reporter one afternoon, that he thinks there is Tantalite around the community. He knows what he is talking about because he has worked as a miner in the past. He presents a little Tantalite which he dug out at a mine somewhere in the country. He has now seen something similar in the locality. Tantalite may spring a surprise here, he seems to imply. Tourmaline is being mined in Olode, Oyo State, and it is much sought after internationally where it fetches a good price.It is used to produce jewellery.

Nigeria’s gold belt begins in the far north, descends into Borgu and spreads through parts of the country, forming a remarkable Crescent as it does.

a $20 billion loss

Chief Hussein Abubakar, Galadiman Akinyele, chief executive of AHMU international mining company, and a major player in solid minerals, tells this reporter in Ibadan, that the solid minerals sector can produce a handsome $20 billion annually, if the activity of smugglers is checked. His words ‘Due to illegal mining  and the illegal extraction of gemstones out of this country, Nigeria is losing more than $20 billion annually. I am calling on the federal government to constitute a very powerful taskforce on the issue of the exportation of gemstones out of this country.’ He would like the task force to be based at our seaports and international airports. The sum of $20 billion referred to above, represents projected revenue for just one of the 34 solid minerals present in different locations in Nigeria.This means that the total contributions of this underdeveloped segment to economy, would certainly be staggering when the industry is functioning at full capacity. Hussein Abubakar’s company works at thirty sites in Oyo State, and employs 20,000 persons. It is also involved in improving conditions in the host communities such as Komu. The lesson in that proper mining companies can improve conditions in host communities. Mrs Diezani Allison-Maduekwe, Minister of Solid Minerals, speaking recently says ‘Nigeria was at one time, the world’s largest exporter of Columbite and the world’s 6th largest producer of Cassiterite (Tin) Today we are a net importer of solid mineral materials for our industries.’ Recently, she announced a number of measures which are meant to woo investors to the sector. These include a three year tax holiday for new companies in the sector, import duty exemption on mining equipment, and the regularised repatriation of foreign capital.

Dambatta and Ibrahim of the Department of Geology, Ahmadu Bello University, Zaria writing in a joint paper argue ‘A properly developed Nigerian gemstone industry is capable of earning more foreign exchange than produce from the agricultural sector or other solid minerals. According to recent data… Nigeria’s rough (uncut) gemstones export is about $27 million, and is estimated to increase to $150 million by the year 2010. Interestingly, coal, if exported by Nigeria within the same period is expected to earn $31 million.’

Dambatta and Ibrahim explain ‘In the 1970s gemstones were classified as ‘controlled’ minerals. This was at a time when Thailand realised the economic potential of the gemstone industry and took steps towards deregulation. Today, Thailand‘s gemstone industry earns billions of dollars annually and employs millions of people. Nigeria has not gone beyond a peasant mining industry’.

gemstone markets

Galadiman Akinyele says that to raise standards and turn around the sector, the federal government should set up gemstone markets in parts of the country. According to him ‘If we have a gemstone market in this country, anybody who wishes to buy gemstones will go through that market. That’s how they will get all their royalties, and they will have data of what is happening and what is in production. Other markets such as gold, tin, tantalite can be set up where there is a deposit. There is no way a person can smuggle the mineral out of that area. The security agencies will be empowered to arrest, and the federal government will have data on the quantity of solid minerals that were moved from various sites’.

‘they are all over the country’

Ahidjo Bamanga, merchant and entrepreneur, also speaks on the West African presence in the solid minerals sector. His words ‘Other west Africans can easily come into Nigeria because of the ECOWAS Treaty which allows for free movement of people and goods. Mining first started in Ghana and Sierra Leone. It began in Nigeria in the early 80s. Those who exposed Nigerians to mining are the Senegalese, Ghanaians and Gambians. They are all over the country.’ Recent reports indicate that there are 10,000 illegal miners in Zamfara State. Many of them hail from neighbouring countries. There is a constant reference to Cotonou at most mining sites across the country. ‘Cotonou is just a route for the gold trade to France. There are lots of French citizens in Niamey. They buy gold coming out of Nigeria. Everyday, there are Nigerian merchants travelling to Niamey to sell gold to French citizens.’ On the amount Nigeria loses to smugglers of precious stones,he says ‘Nobody can really say how much  we  are losing. There are no statistics to rely on’. Dambatta tries to explain the presence of groups from other west African nations in the solid minerals sector.His words ‘The reasons why many persons from west African nations are active in the solid minerals sector of our economy, is due to the high level of poverty among our people, and lack of enforcement of our rules with regards to immigration, customs etc’.

from oil to stones

Ahidjo Bamanga believes that solid minerals can replace oil if properly harnessed, although some would disagree with him on this point. Dambatta thinks that the sector can produce substantial resources, rather than replace oil completely. Bamanga says that security is a big problem, scaring potential investors away from the sector.His words ‘Security is a big challenge. No one is sure of his life and property, not to talk of a foreigner who is coming. French nationals stop at Niamey, rather than travelling into Nigeria.’ He dissects the various parts of the sector in these words ‘Only 5 percent of those in the business of precious stones are doing well. Precious stones are good, only when the world economy is good. The rich and famous then purchase precious stones for their loved ones. Gold is my best choice if one doesn’t want to take a risk in the business.’ He adds quite instructively ‘If you have N20 million worth of precious stones, there is a possibility you will be hungry. But if it is gold, if you have 5 grams, there will be someone willing to pay. Today, 5 grams of gold cost twenty thousand naira’. Ya’u Mohammed Damisa is Danmasanin Borgu and comments on mineral resources in Borgu ‘I am sure even the feldspar here is wasting away. Government is not paying attention to it yet. The iron ore at Konkosso is more than what obtains at Ajaokuta. You will even see evidence of some mining there. It is illegal mining that is going on and not the type of mining that’s organised by government. Individuals are mining, selling to dealers. The dealers now refine the gold and sell out’.

Auwal Ibrahim Musa, Executive Director CISLAC, speaking on the neglect of the sector says ‘People have reduced the importance of solid minerals because of oil. Solid minerals may not yield the kind of quick money which petroleum does. Therefore they decided to ignore it and it remains underdeveloped. Another point is the absence of patriotic feelings among us. This is why we allow foreigners to take these resources through informal or illegal ways. If you go to Nasarawa and many other places, you will   see some foreigners engaged in illegal mining’.

Insufficient laws?

Some argue that the laws regulating the sector are not sufficent, while others say they are sufficient, stressing that these laws have not been enforced. Speaking on the mining law, Galadiman Akinyele says ‘With the new regulation now, anybody can hold minerals in this country because there is no issue of form K. So everybody is losing money. Anbody can carry minerals out of the country. The security agent at the airport cannot even recognise these minerals. They are just collaborating with the clearance agents and moving minerals out of this country’. He adds that there is no law in place to arrest a dealer in stones in the country. His words ‘There is no law to arrest a dealer in stones in this country, and the dealers capitalise on that. So if there is a law that you cannot hold gold until you have a licence to buy gold or to sell gold, then things wont be so bad. But there is no law for this purpose.’ Dambatta sheds some light on this matter, by saying ‘It s true that there is no law in place to arrest a dealer in stones, but it is not true either. People get licences to buy and sell precious stones. He may go and get stones from a place which his licence does not refer to. If he is caught he will now present the licence ‘claiming innocence’. So there is a defect in the law in this sense. It can easily be manipulated by the individual’. Ahidjo Bamanga adds that most laws are not obeyed in Nigeria, and that the solid minerals sector is simply a victim of this poor attitude to laws.

the goldmines of borgu

There are some 500,000 artisanal and small scale miners in the country today, doing a lot of manual work at the mines, and taking a large part of the unearthed stones to dealers in solid minerals in parts of the country today. A significant part of these stones find their way to Niamey in Niger Republic, as well as Cotonou in the Republic of Benin. Throughout West Africa, there are mining sites, and these mines also played a role in shaping the history of the area. The famous Mansa Musa of Mali readily comes to mind. On his way to Mecca in the fourteenth century, he took so much gold with him that it affected the economy of Egypt adversely. There is a solid ‘West African presence ‘at most mines in the country. Many of these labourers hope to strike gold while digging, and so they work at the mines, enduring the heat and danger. The pits sometimes cave in, burying the labourers as well as their dreams in the process.

The goldmines of Borgu are located in the village of Koro. Labourers are constantly digging at the pits looking for gold. Many of them are Hausa. Someone argues that mining began in the north. He adds that the Hausa have the necessary patience and stoic constitution, which the search for solid minerals requires. He also says that most of the labourers have highly perceptive natures, so they can easily identify where a good deposit of solid minerals exists. The largest pit seems to be some 25 feet deep. It is awesome. Another one nearby is 8 feet deep. It intimidates for the men have been digging through solid rock. Despite the depth of the pit and the uneven sides, they quickly climb to the summit.

Sa’adu Mohammed Bio is the District Head of Koro.He tells Sunday Trust that people have been mining gold in Koro for the past twenty years ,and adds that the miners have a ‘local way’ of identifying solid minerals. His words ‘They have a local way of identifying solid minerals. Where they suspect there is a find, they begin digging. When they actually find gold, they wash the sand in water, then they identify the sand, because gold is heavier than sand. After digging a pit they get the stones, crush them, mill it and then wash’. He says that gold has brought great wealth to some of his people. His elder brother has sixteen cows, which he bought from proceeds of the gold trade. ‘Majority of the people here are involved in the gold mining business, and many use it to acquire western education. Gold is a blessing to the people here’. A mining company will soon move to Borgu to begin the proper mining of gold. The people are looking forward to this development. On this, Sa’adu Bio says ‘We are going to sit down and discuss with the management of the company, so that we have a symbiotic relationship between the company and our people. When the company first came, they met our community leaders, and promised to incorporate the people when it starts to mine gold.’

Musa Mohammed is Chairman, Gold Dealers Associaton in Borgu, and also Sarkin Hausawa. He has been twelve years in the gold trade. His words ‘When they bring the gold, we   measure it. Whatever it costs we now pay them’. He says that good times have come in the business as the price for gold has soared. According to him ‘Before we used to buy a gram of gold for N500, and gain just a hundred naira. Today, a gram costs N3,500. So this has changed our lives, and some of us have used the gain to invest in other businesses’. In the past he used to trade in cows. But the gold trade means that his circumstances have changed. Now he has sent his children to school. He has built a house in Koro and is able to look after himself. According to Musa Mohammed there are different categories of dealers in gold. ‘When I receive gold, I will melt it. After this, I will take it to my dealer who will measure it and pay me. Then he will take it out to sell’. Gold is usually found at three places, he says. These are river beds, the surface of the earth, or at the bottom of pits. He says that the dug pit is the most popular site for finding gold. He adds ‘Whenever they find gold there, there is likely to be more at the spot’.

life at the mines

Mahmuda Kabiru 38, has been involved in mining since 1984. He speaks on the challenge facing the average labourer at the mines. His words ‘Sometimes, I will send three months digging at a site, but wont discover any mineral. Then one has to go to a dealer to get a loan. In the past I used to go to Ilesa to mine gold. There in the mines we will be arrested by the police, and we will be detained for a period which can reach a week’. He also speaks on dangers in the pit itself. His words ‘While digging you can be injured and there is nobody to treat you. Sometimes, the labourers die when they sustain injuries. Again, if they dig deep, the upper part of the pit may collapse from the top, and it may kill a labourer’. When he goes to a mine, he makes friends with the miners at the site. When he does not have money to feed, these new friends will now take care of him. He says that he has worked at the mines at Ilesa, Kebbi, Ado Ekiti, Zamfara and Abeokuta. There is a lot of travelling in the miners trade, he says. When news of a find leaks, everbody now leaves for the new location to try his luck. But he says that the best gold in the country is found in both Borgu and Ilesa. He is happy that a proper mining company will soon be coming to Borgu to start mining gold.

Zakariya Yau has spent 18 years digging gold. To him a good miner is one who can easily identify a gold vein with rich deposits. He will be delighted if the new mining company coming to Borgu, will incorporate those, like him, who have been mining in the area for years. He says he and his fellow labourers use hammers, chisels, diggers and shovels while digging for gold. He hopes the company will change all of this, and teach them about new mining methods.

gold dealer in Borgu

Sunday Trust also came across information relating to a major dealer in gold in Borgu. According to the source who prefers anonymity ‘If gold is obtained, it is divided into three parts. This dealer will buy two parts. There is nobody like him in this business. He gets the gold and takes it to Cotonou where he sells it, and brings cars into Nigeria. Also some businessmen often go to buy goods from Cotonou. Instead of going with the money, they will give Alhaji the money. He will convert it to gold and take the gold to Cotonou. He will sell the gold at Cotonou’. Three attempts by this reporter to interview the gold dealer in Borgu never yielded fruit. He always claimed to be on a journey.

2 months digging a pit

Saidu Umar has spent twelve years as a miner.At a point he mined in Kwara State. Then he got to Borgu. It sometimes takes two months to dig a pit. Sometimes there is no money to feed with, he says. Then you have to go to a ‘dealer to get a kind of loan’. There is a lot of migration within the trade, he says. Right now some labourers have travelled up to Zamfara to join some miners there.

mai borgu speaks on gold

Mai Borgu Dr. H. Dantoro Kitoro III, while speaking on solid minerals in Borgu says ‘It’s on record that even the colonial masters knew that there are solid minerals in Borgu. Unfortunately, these deposits have not been explored. I remember some few years back some persons from Niger Republic started coming to New Bussa here, particularly at Koro village. It is presumed to have a very large deposit of gold… They have been doing the surface excavation’. According to him a Korean company will soon commence mining for gold in Koro village. He is enthusiastic that this will turn around the life of the communities in the neighbourhood .His words ‘I am happy to say that one of the key resource persons in the country, pointed at a company in a foreign country. The company came here, saw the deposits and went into action. Of course, you know that when this potential is explored, it will empower our people economically. It will put Borgu on the economic map of this country… We are going to go into mechanised mining, so that the risk involved in mining will be minimised’. He explained that the ordinary people will be dispossessed of their land when the company takes over mining activities, but he is sure the people will laugh last. Dambatta says that the popularity of gold owes to a number of factors. The first of these is the high price and volume ratio of the commodity. Next gold is used as a reserve in the banking industry to store wealth.Then there is its use as jewellery.

Konkosso: They are poor, but rich

This reporter had not spent up to one hour in Borgu before he heard of the community named Konkosso, which has immense iron ore deposits. These are deposits which can last a hundred years. Some say the   Konkosso deposit is of a higher quality than what obtains at Ajaokuta in Kogi State. Konkosso sits on top of the deposit. If people go into their houses and scratch the floor or walls, they rise with iron ore in their palms. It’s that easy at Konkosso. Mai Borgu speaks on two experts on minerals who visited Konkosso recently, to check out the iron ore deposits there. His words ‘I know of two experts who came in. One came from China, the other from South Korea. They went to Konkosso and discovered that the iron ore deposits there surpass those of Ajaokuta. They said it will take one hundred years for the deposit to be exhausted. The quality of the iron ore surpasses that of Ajaokuta, according to the provisional report we received. Of course, they are very keen on going to the site’. Malam Jibo, a civil engineer, comments on the Konkosso site. His words ‘We have someone in the ministry of mines and power. I brought a sample of iron ore which I picked in my house. When I gave it to him and he tested it, his result was 99 percent pure iron ore. In quantity it’s much more than what is available in Ajaokuta. In their research so far, they have never encountered an iron bed of such quantity as seen at Konkosso. With this find at Konkosso, we conclude that government would have to intervene for effective mining. The town is sitting on the iron ore deposits, and mining hasn’t commenced there yet’.

Engineer Jibo says that people are looking forward to the excavation of the iron ore, but he wonders what the side effects of mining will be, and asks whether the people will be involved in the discussions. He says ‘What are the side effects of mining? Will the people be part of those that will benefit from the exercise?’ Is the solid mineral sector springing back to life?