With many stakeholders
lamenting the poor investment and development in the solid minerals and
power sectors, the chairman of the Eta Zuma Group, Dr Innocent Ezuma, in
this interview with RUTH TENE NATSA has espoused the need for more
funding to attract credible investors into the sectors.
What are your challenges as a major player in the mining & power sector?
These two sectors have been experiencing problems for decades now and the problems from my own point of view is that our past leaders neglected the sector so much that adequate investments were not made on capital projects.
The solid minerals and power sectors must be actively and continuously invested in. In the solid minerals sector, investments must be made in all types of exploration activities to generate geoscientific data that the institutional investors will need to make investments decisions.
Until the administration of Chief Olusegun Obasanjo, the two sectors were completely neglected. President Goodluck Jonathan also did very well when he took over but the much that has been done cannot immediately transform the sector.
It cannot be done overnight as power sector infrastructures are not such that can be bought off the shelf; they require time and huge investment. But if we continue on the path we are now, it will surely get better.
What are the challenges that have delayed the 30 per cent coal-to-power generation?
Time. The challenges have been overcome by the enabling environment provided by the present administration. The media, yesterday, reported that the Nigerian Electricity Regulatory Commission (NERC) subdivided our on-grid 1,200 megawatts (mws) coal-to-power licence into four and assigned them to four special purpose vehicle (SPV)’s to fast-track the implementation of the projects.
The projects are already advanced and by the end of this year, God willing, we should start the construction for the 1st phase of 300mws. This administration have put in place and empowered federal government institutions that are required to provide the much needed assurance of credible and viable sector for investors to have confidence and invest their resources in these very important sectors of our economy.
So all the problems of the past have been resolved by this singular act. However, as those legacy problems have been resolved, new ones have surfaced and that is to awash the sectors with cheap and long term funds.
Would you then say the environment is very investor friendly?
Yes, I would say so because the government has done so much. But the next thing they need to do is to awash the industry with money because to generate 1,000mws of power using coal requires about $3 million/mw and Nigeria, for immediate usage, requires over 75,000mws out of which we are struggling with 5,000mws. This means that we are running at a minimum of about 70,000mws uncatered for and if you are to produce 20,000mws of coal-powered electricity, multiplied by $3 million, we are talking of huge amounts.
This administration is trying its best but I think they really need to understand the depth of funds required to speed up development in these sectors. So they should make money available for serious and credible green field investors and developers in Nigeria to access and develop more power stations. Such investments should not only be for developing the stations but for the transmission and distribution sectors.
Do you think the sector will do better if it goes into a partnership with the federal and state governments?
Mining, like power, used to be the exclusive prerogative of the federal government but it has been unbundled with the mining Act of 2007 which made the solid minerals industry open for investors. Even now if you want to get a licence all that is required is to go to the Federal Ministry of Mines and Steel Development (MMSD) through the Mining Cadastre office, which is decentralised to the state level, to process your application. If you follow the process, it is very cheap and easy.
The Mining Act protects investors, that is why people like us left our business in Europe to dabble into the sector with confidence. To tell you the truth, the cooperation we are receiving today from government ministries and agencies surprises even us. We did not expect it.
The Okobo community members have cried that they were short changed in the investment on their mines. How would you react to that?
Communities will always raise issues. When Dangote began building Obajana cement, the community raised issues, but today go and tell them that Obajana wants to stop and you will hear what they will say. Same thing applies to us. When we began,there were several issues; they didn’t even want us to move in and mine. Now we are mining the coal and they are seeing it. New houses are springing up every day and people who couldn’t afford bicycles before are now buying cars.
We have constructed roads and provided water and the community is happy. So it is a problem that will always be there so long as ignorance and illiteracy is prevalent in our society.
This, however, is not a major challenge because so long as you deal honourably with the people, you will get their support. Right now I can tell you that we are enjoying great support from our host community.
With over 44 unexploited minerals, what do we do as a nation?
What we must do is exploration. It is the act of finding what God has hidden in the ground. You may think you have minerals but if you do not do scientific exploration to acquire the geoscientific data, it will be very difficult to get investors to move in.
What we lack in this country is scientific exploration in terms of geoscientific data and this is what we must develop in order to attract credible and meaningful investors.
The exploration stage in solid minerals development is normally not done by big companies/investors, because it is time consuming and also the riskiest part of mineral exploration and mining process. At this stage, you can lose your money and it is time consuming and big players do not have that time.
So I think the government should empower us because we have the best exploration company in the country in solid minerals development. We have exploration equipment, including drilling rigs. You cannot call investors and not be able to tell them the quantity and depth of the minerals you have. So exploration, exploration and more exploration is the answer.
With what you have, how can you help the government to develop the sector?
We have proposed a partnership arrangement with one of the parastatals of the Ministry of Mines and Steel Development to conduct exploration and prove resources starting with coal, then gold and iron ore so that investors that will want to build power plants, for example, will have a scientifically proven reserve in line with the JORG standards.
What are your challenges as a major player in the mining & power sector?
These two sectors have been experiencing problems for decades now and the problems from my own point of view is that our past leaders neglected the sector so much that adequate investments were not made on capital projects.
The solid minerals and power sectors must be actively and continuously invested in. In the solid minerals sector, investments must be made in all types of exploration activities to generate geoscientific data that the institutional investors will need to make investments decisions.
Until the administration of Chief Olusegun Obasanjo, the two sectors were completely neglected. President Goodluck Jonathan also did very well when he took over but the much that has been done cannot immediately transform the sector.
It cannot be done overnight as power sector infrastructures are not such that can be bought off the shelf; they require time and huge investment. But if we continue on the path we are now, it will surely get better.
What are the challenges that have delayed the 30 per cent coal-to-power generation?
Time. The challenges have been overcome by the enabling environment provided by the present administration. The media, yesterday, reported that the Nigerian Electricity Regulatory Commission (NERC) subdivided our on-grid 1,200 megawatts (mws) coal-to-power licence into four and assigned them to four special purpose vehicle (SPV)’s to fast-track the implementation of the projects.
The projects are already advanced and by the end of this year, God willing, we should start the construction for the 1st phase of 300mws. This administration have put in place and empowered federal government institutions that are required to provide the much needed assurance of credible and viable sector for investors to have confidence and invest their resources in these very important sectors of our economy.
So all the problems of the past have been resolved by this singular act. However, as those legacy problems have been resolved, new ones have surfaced and that is to awash the sectors with cheap and long term funds.
Would you then say the environment is very investor friendly?
Yes, I would say so because the government has done so much. But the next thing they need to do is to awash the industry with money because to generate 1,000mws of power using coal requires about $3 million/mw and Nigeria, for immediate usage, requires over 75,000mws out of which we are struggling with 5,000mws. This means that we are running at a minimum of about 70,000mws uncatered for and if you are to produce 20,000mws of coal-powered electricity, multiplied by $3 million, we are talking of huge amounts.
This administration is trying its best but I think they really need to understand the depth of funds required to speed up development in these sectors. So they should make money available for serious and credible green field investors and developers in Nigeria to access and develop more power stations. Such investments should not only be for developing the stations but for the transmission and distribution sectors.
Do you think the sector will do better if it goes into a partnership with the federal and state governments?
Mining, like power, used to be the exclusive prerogative of the federal government but it has been unbundled with the mining Act of 2007 which made the solid minerals industry open for investors. Even now if you want to get a licence all that is required is to go to the Federal Ministry of Mines and Steel Development (MMSD) through the Mining Cadastre office, which is decentralised to the state level, to process your application. If you follow the process, it is very cheap and easy.
The Mining Act protects investors, that is why people like us left our business in Europe to dabble into the sector with confidence. To tell you the truth, the cooperation we are receiving today from government ministries and agencies surprises even us. We did not expect it.
The Okobo community members have cried that they were short changed in the investment on their mines. How would you react to that?
Communities will always raise issues. When Dangote began building Obajana cement, the community raised issues, but today go and tell them that Obajana wants to stop and you will hear what they will say. Same thing applies to us. When we began,there were several issues; they didn’t even want us to move in and mine. Now we are mining the coal and they are seeing it. New houses are springing up every day and people who couldn’t afford bicycles before are now buying cars.
We have constructed roads and provided water and the community is happy. So it is a problem that will always be there so long as ignorance and illiteracy is prevalent in our society.
This, however, is not a major challenge because so long as you deal honourably with the people, you will get their support. Right now I can tell you that we are enjoying great support from our host community.
With over 44 unexploited minerals, what do we do as a nation?
What we must do is exploration. It is the act of finding what God has hidden in the ground. You may think you have minerals but if you do not do scientific exploration to acquire the geoscientific data, it will be very difficult to get investors to move in.
What we lack in this country is scientific exploration in terms of geoscientific data and this is what we must develop in order to attract credible and meaningful investors.
The exploration stage in solid minerals development is normally not done by big companies/investors, because it is time consuming and also the riskiest part of mineral exploration and mining process. At this stage, you can lose your money and it is time consuming and big players do not have that time.
So I think the government should empower us because we have the best exploration company in the country in solid minerals development. We have exploration equipment, including drilling rigs. You cannot call investors and not be able to tell them the quantity and depth of the minerals you have. So exploration, exploration and more exploration is the answer.
With what you have, how can you help the government to develop the sector?
We have proposed a partnership arrangement with one of the parastatals of the Ministry of Mines and Steel Development to conduct exploration and prove resources starting with coal, then gold and iron ore so that investors that will want to build power plants, for example, will have a scientifically proven reserve in line with the JORG standards.
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