Numbers published in an audit report by the Nigeria Extractive Industry Transparency Initiative (NEITI) suggest a significantly healthy China-Nigeria bilateral relation. At least, the country’s mining sector gives a glimpse of it.
Data sourced from NEITI, a transparency watchdog, showed companies owned by Chinese nationals are the largest mining companies in Africa’s biggest economy.
The NEITI’s report showed mining activities in Nigeria in 2020 were carried out by 102 companies. Information about beneficial ownership was provided for 65 of these companies.
Details of ownership show that 28 of them were owned by Chinese nationals. This means 43.08percent of the companies that mined minerals in 2020 were owned by Chinese nationals.
Further insight showed Nigerians owned 23 of these total 102 companies. The companies owned by Nigerians made up 35.38 percent of the total that mined minerals in 2020.
Beneficial ownership of other companies showed Lebanese owned 3 of these companies, and two were owned by Germans. One company was owned by an Indian, a Liberian, and an American.
The NEITI also showed that 102 companies produced 64.61 million tons of 38 different minerals. The top five minerals were limestone, granite, sand, laterite, and clay.
Production output by the company’s national ownership shows companies owned by Nigerians produced the highest output in 2020. These companies were able to produce 33.49 million tons of mineral products in the year. These made up 51.85percent of the total mineral output.
Companies whose owners were not specified produced the second largest output in the year. Their output, which amounted to 21.39 million tons, comprised 33.12percent of the total output.
The Chinese company produced the third largest output in the year. These companies produced 4.24 million tons of mineral products, accounting for 6.57percent of the total.
German and Lebanese-owned companies produced the fourth and fifth largest output. 3.46 million tons were produced by German-owned companies, while those owned by Lebanese produced 1.45 million tons.
The market value of these minerals as of 2020 summed up to N120.49 billion. Of these, the minerals mined by Nigerian companies were N28.76 billion. This was 23.87percent of the total market value.
Those whose owners were unknown were valued at N76.81 billion, comprising 66.24percent.
The Chinese-owned companies placed third behind those by Nigerians. These companies produced output valued at N5.68 billion, comprising 4.71percent of the total market value.
However, China was the primary benefactor of the output from the mineral sector in 2020. The total export volume in 2020 was 32,992 tons from 30 different minerals. Out of this, 26,550 tons of these were exported to China. This represented 80.48percent of the total export volume.
This means other countries with export destinations received 19.52percent of the 32,992 tons exported.
The export value shows that 85.07percent of the $42.46 million in exports went to China. China’s export value of the mineral product in 2020 was $32.12 million. The other countries exported 14.93percent of $42.46 million worth of mineral products from Nigeria in the year.
A report by KPMG, a multinational professional services network, and one of the Big Four accounting organisations showed despite the widespread economic impacts of the coronavirus in 2020, Nigeria’s mining sector exceeded the budgeted revenue of the Federal Government (FG) in 2020 by about 10 percent (N2.09billion as against N1.9billion).
The sector also increased its contribution to the Nation’s Gross Domestic Product (GDP) by about 23percent in 2020.
Despite its huge potential, researchers at CSL Stockbrokers warned that illegal mining activities had continued to wipe gains in the sector.
They said, “Despite the endowment of mineral resources in Nigeria, the solid minerals sector has significantly underperformed with a meagre contribution of less than one percent to the GDP over the years.
“The figure is, however, solely from formal channels as the artisanal and small-scale mining activities that constitute over 80 percent of the current mining activities in the country are unaccounted for.”
This is where Nigeria’s mining problem lies. Nigerians, noted the Capstone report, have practised informal artisanal mining for centuries.
It said, “Today, the activity is largely poverty-driven and supports the livelihoods of at least 500,000 people. Partly due to its informality, artisanal mining is associated with many negative externalities such as environmental degradation, crime and health hazards.
“One tragic example is the 2010 lead poisoning outbreak in Nigeria’s northwestern Zamfara State, which killed approximately 400 children and has affected thousands more.”
Job creation is another benefit Nigeria is missing out on by leaving the sector underdeveloped.
Australia has about 320,000 direct jobs attributable to the mining sector, while over 200,000 jobs have been created in Canada through the mining sector.
Nigeria, rich in over 34 solid minerals, has over 23 million of its citizens with no jobs.