Dr. Innocent Ezuma
Beyond lack of funding, the Chief Executive Officer, Eta Zuma Group, Dr. Innocent Ezuma, in this interview with Everest Amaefule, says equipment and technical competence are significant limitations to mining operations in Nigeria
You believe in generating power through coal; why do you think this is the way to go?
We were actually compelled to go into
coal exploration because of our steel factory in Jos. We were looking
for sources of raw materials to generate power. Through enquiry, I
learnt that the major sources of energy in Nigeria are hydro and gas.
This is not very good for national security. Gas pipeline will be very
far from Jos. The alternative was to look for coal so that it could
easily be transported to Jos. When we dabbled into that, we found that
it did not make economic sense to go into the project on a small scale.
So we decided to develop the coal asset and a big coal fired power
plant. This will be good energy mix for the country.
How far have you gone with generating electricity from coal?
The journey has been bumpy but the most
important thing is that it is going. And it is going very well. We have
explored and found a huge deposit of coal. We have navigated all the
Mining Act of 2007 processes and acquired three mining leases. We have
done Environmental Impact Assessment and all community issues including
the land lease and the mining of the coal has started. Basically at this
time, we are on top gear, developing the coal fired power project; we
already have obtained licence for 1,200 megawatts issued by the Nigerian
Electricity Regulatory Commission.
What major problems did you encounter when you started?
When I started all these things, people
advised me against the move but I thought it was high time we started
believing in our country; in doing things that would help to grow the
economy. We should not always be looking for the easy way out.
Community issues are some of the challenges you meet when you go into exploration. How were you able to overcome this?
We don’t really have big community
issues. Initially, the communities were apprehensive. This is
understandable but by the time they saw that we were treating them with
utmost respect, with pure and positive goodwill, they calmed down and
started helping us. We have opened a road there. We gave them water. We
gave the people employment. We are building houses in their villages.
These are areas you could not go to before. We are in a very good and
harmonious relationship with our community. Of course, you cannot avoid
one or two small issues but we have a senior Nigerian statesman, a
former ambassador, as our executive director in charge of corporate
relations. He deals with community people like equals and the company
gives him the support. So we are in good relationship with our host
communities.
What are the other challenges you face?
The main challenges, I must tell you,
are funding and some government’s enabling facilities. The project is a
heavy one. The project of coal mining is over $200m. Then, we will need
to build the power plant. The power plant is a project of over $3bn.
Then we need to put up a railway line. The rail line is about $1.5bn,
almost 190 kilometres. So you see, this is a capital intensive project.
As at today, the government has not put up a mechanism to support such
investment.
However, our Minister of Mines and Steel
development, Mr. Mohammed Sada, has provided excellent support. The
Kogi State Governor, Captain Idris Wada, left everything he was doing
and visited the site and gave us enormous support. Everybody has been
supportive. We are enjoying the support. At the very high Federal
Government level, they have been doing very well for the power sector
but we need some kind of guarantees from the Federal Government that
will support investors like us. It is difficult for other countries to
believe in us and give us huge amounts of money when our country is
shying away from giving some form of guarantees that will boost the
morale of those people that are supporting us. If they are willing to
give you money and the government is not willing to give you sovereign
guarantee covering their money; that can be a challenge. This is where
we are having some gaps in the system. I think that the Ministry of
Power together with the Ministry of Finance should work out a win-win
situation where credible investors like us (and there are so many of us)
can be supported with sovereign guarantees. Some of us had to shut down
simply because they didn’t have the financial muscle to continue. And
the problem of infrastructure is actually the prerogative of the
government in every part of the world. It is their responsibility to
provide primary infrastructure for the citizenry. Now where a private
sector player is doing that and they shy away from giving them the
necessary guarantee or help in issuing bonds, I don’t think that is very
encouraging to other financial partners that are outside the country
that want to come and help. If your government is not helping you, why
should they bother? I know that if this matter is properly presented to
President Goodluck Jonathan, who is also driving this power sector
reform seriously, positive action will be taken towards resolving it.
How would you access the mining sector in Nigeria?
The mining sector is still developing
but it is developing fast. There are so many people with exploration
licences. Over 15,000 mining titles have been issued including quarries,
small scale mining licences, exploration licences and mining leases.
People are eager and desirous to invest and work in this sector but
everybody’s limitation is funding. Other limitations are equipment and
technical competence. These are things you can get but you need funding
to get them. Where the system does not have a policy to fund investment
in this sector, it is a problem.
Do you have confidence in the power sector reform?
By nature, I am a very positive person.
So I must tell you that I have utmost confidence that we will get it
right. What was lacking was determination, but this administration is
determined to make it work. After rain, there must be sunshine. So these
things that you see now – labour issues, privatisation, etc; are normal
things in the process. After all these things, what happens next? The
country will learn from them; the people will learn from them; and the
system will learn from them. The government has put in place all the
necessary organisations that are required to push the power sector
reform to its logical conclusion. The regulatory agency is there. The
aggregation company is there. Basically, everything is in place. It is
not a situation where the people don’t know what they are doing or there
is no determination to succeed. This is why I am confident that these
things are going to work.
How much contribution can mining make in addressing the unemployment problem in the country?
I must tell you that if Nigeria wants to
solve the unemployment problem, it must actively engage and actively
provide the enabling environment and put policies in place to support
mining and agriculture. These two industries in all parts of the world
have always generated the highest number of employment. Petroleum does
not generate a lot of jobs. It can give you a lot of money but it does
not generate a lot of jobs. Mining, on the other hand, has several value
chains from the time of mining, loading, processing and other
activities. It is a chain reaction. So, Nigeria must play an active role
in seeing that the solid mineral sector is developed. And let me tell
you, this country is richly blessed with solid minerals. I must tell you
that every square kilometre of Nigeria has valuable mineral in it.
There is no poor area in Nigeria. Each one has something to offer and in
quantum. But you need money to convert all these. You need equipment.
You need people and professionals. So the government must have a rethink
and empower this sector. There are no two ways to do it. You cannot
create jobs by wishful thinking. You cannot create jobs by announcing
that you want to create 10 or 20 million jobs. That does not do the job.
You must put the policies and processes in place that will empower the
private sector to go into the heartland and invest in mining and
agriculture to feed the nation. Look at America, anytime they have
problem, they will bring a policy that will empower the private sector
because it is the private sector that employs. They create the
employment. Nigeria must take good examples from good capitalist nations
that have suffered our pains in the past.
Source (http://goo.gl/2Zdzp)
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