Since minerals belong to the Nigeria government, the $3.4 cash reward given to a small-scale miner in Tanzania would be impossible in Nigeria.
In June 2020, Saniniu Laizer, a small-scale miner in Tanzania, became an overnight millionaire after he sold two rough Tanzanite stones for $3.4m to Tanzania’s mining ministry. The gemstones which had a combined weight of 15kg was the biggest ever mineral find in the country.
Regulated sector, no incentives
Artisanal and small-scale mining (ASM) in Nigeria is regulated by the Ministry of Mines and Steel Development. This regulation has not helped the sector.
Unlike Tanzania, Ghana and Burkina Faso, Nigeria lacks a developed and organized large-scale mining sector. The bulk of gold mining, for instance, is done by artisanal and small-scale miners. Yet, Nigerian regulation largely excludes small scale miners rather offer them incentives to operate within the ambit of the law. The result has been the flourishing of completely informal and illegal ASM activities and unsafe practices. There has been a surge of incidents of lead and mercury poisoning which have killed thousands of children in Nigeria. Nigerian artisanal miners are unlicensed and thus cannot get Tanzania’s Saniniu $3.4m reward so they choose to operate outside the purview of the law. Nigerian Government loses taxes and royalties from mining activities.
An assessment report of the Nigerian mining sector by The Environmental Law Institute showed that while the current mining law and regulations address artisanal and small-scale mining activities mainly by its focus on the provision of extension services they do not provide meaningful incentives and help for formalizing mining activities.
For example, the requirement that artisanal miners form cooperatives to receive any technical help from the Ministry of Mines and Steel Development is a substantial obstacle for many miners, and means that most will continue to operate informally. It also means that these miners, in practice, cannot seek a small-scale mining license, the only license available to them under the mining law.
It is a different case in Tanzania. Tanzania’s Mining Act provides indigenous rights to holders of primary mining licenses and gemstone mining licenses which easily are issued to Tanzanian citizens or mining companies with majority Tanzanian management and shareholding. Hence it was easier for the Tanzanian Saniniu Laizer, a small-scale miner, to earn a cash reward of $3.6m.
According to the Nigeria Extractive Industry Transparent Initiatives (NEITI), Nigeria lost $9 billion between 2014 and 2015 to illegal mining of gold and other mineral resources. Unlicensed artisanal miners are widely held to be behind the illegal mining and exporting activities.
In response, the Ministry of Mines and Steel Development signed a Memorandum of Understanding (MoU) with the Bank of Industry for the management of a N5 billion fund to support Nigerian Artisanal and Small-Scale Miners (ASM) in 2017.
The fund allows certified artisanal and small-scale miners under the scheme to access between N100,000 and N10 million that would be available as Term Loans or Working Capital for the purchase of requisite items of plant and machinery; payment for drilling, geological and other services related to mining business. But this assistance is only available for certified Artisanal and Small-Scale Miners. Uncertified and unlicensed artisanal and small-scale miners, who mostly engage in illegal mining cannot access the funds. Getting a license and certification for ASMs is tedious, and almost out of reach for most small-scale miner who are uneducated, hence the proliferation of illegal mining activities.
In their research on artisanal and small-scale mining, Ikenna Theodore Oramah, et al. argue that the Nigerian government would be better able to reap the benefits of mining activities if the licensing of and engagement with artisanal miners is done in a community-inclusive way. Such an approach would be viable because it starts from recognising the fact that the people in communities bearing minerals are mostly uneducated people who already extensively carry out mining activities and recognises their rights to do so.
An expert on extractive resources, Dr. Diran Bello, Executive Director, Good Governance Group, told Arbiterz that the Nigerian state is “virtually oblivious to the workings of small and artisanal operations that create significant untaxed value.” This is evident in the Bank of Industry intervention. Dr. Bello added, “organised Chinese gangmasters who cream away much of the value created from artisanal gold mining” have stepped into the breach. Obviously what Nigerian authorities need to do is give mining communities incentives to operate within the law. If they could get the sort of money Tanzania’s Saniniu Laizer got from artisanal mining, they would work with Nigerian agencies rather than Chinese mercenaries.