Nigeria to Begin Iron Ore Production by 2012
- By Abimbola Tooki
- Published September 5th, 2011
- News
- Unrated
Nigeria expects the first significant iron ore production next year from its Itakpe iron ore deposits as it looks to reduce its dependence on oil and gas revenues, a government official said Friday.
“Unfortunately, since we found oil, all the attention went to oil and we neglected other areas... mining is one of the key areas that we want to diversify into,” Olusegun Aganga, minister of trade and investment, told journalists at a mining conference in Perth, Australia.
Nigeria, which gets nearly 80 per cent of its revenues from oil and gas production, will start receiving revenue from iron ore production next year. The Itakpe iron ore deposit contains three billion tonnes of iron ore reserves, according to the minister.
Aganga said initial production from the mine is expected to be 2 million tonnes a year, ramping up to 20 million tonnes annually in five years, a development that will help Nigeria establish a track record in the mining industry and allow it to attract more investors.
The mining of minerals in Nigeria accounts for only 0.3 per cent of the country’s GDP, due to the influence of its vast oil resources. The domestic mining industry is underdeveloped, leading to Nigeria having to import minerals that it could produce domestically, such as salt or iron ore. Rights to ownership of mineral resources is held by the Nigerian government, which grants titles to organisations to explore, mine, and sell mineral resources.
The National Iron Ore Mining Project (Niomp) at Itakpe is earmarked to supply the total 2.155 million tons per year iron ore requirement of the Ajaokuta Steel Project. In addition, it is contemplated that the project would also supply about 40 per cent of the requirement of the Delta Steel Company for super-concentrate iron ore fines (grading 68 per cent) which were largely imported from Brazil.
Also, contract for the provision of railway line from Ajaokuta to Warri was only executed over a portion of the over 200 kilometre distance. Thus, there is no existing provision for cost-effective bulk transportation of iron ore super-concentrate from Itakpe to Delta Steel Company.
“Unfortunately, since we found oil, all the attention went to oil and we neglected other areas... mining is one of the key areas that we want to diversify into,” Olusegun Aganga, minister of trade and investment, told journalists at a mining conference in Perth, Australia.
Nigeria, which gets nearly 80 per cent of its revenues from oil and gas production, will start receiving revenue from iron ore production next year. The Itakpe iron ore deposit contains three billion tonnes of iron ore reserves, according to the minister.
Aganga said initial production from the mine is expected to be 2 million tonnes a year, ramping up to 20 million tonnes annually in five years, a development that will help Nigeria establish a track record in the mining industry and allow it to attract more investors.
The mining of minerals in Nigeria accounts for only 0.3 per cent of the country’s GDP, due to the influence of its vast oil resources. The domestic mining industry is underdeveloped, leading to Nigeria having to import minerals that it could produce domestically, such as salt or iron ore. Rights to ownership of mineral resources is held by the Nigerian government, which grants titles to organisations to explore, mine, and sell mineral resources.
The National Iron Ore Mining Project (Niomp) at Itakpe is earmarked to supply the total 2.155 million tons per year iron ore requirement of the Ajaokuta Steel Project. In addition, it is contemplated that the project would also supply about 40 per cent of the requirement of the Delta Steel Company for super-concentrate iron ore fines (grading 68 per cent) which were largely imported from Brazil.
Also, contract for the provision of railway line from Ajaokuta to Warri was only executed over a portion of the over 200 kilometre distance. Thus, there is no existing provision for cost-effective bulk transportation of iron ore super-concentrate from Itakpe to Delta Steel Company.
