The Minister of Mines and Steel Development Olamilekan Adegbite said the Federal Government of Nigeria has concluded plans to concession Nigeria’s bitumen reserve of 42.74 billion metric tonnes for local production.
Briefing journalists on the concession of delineated bitumen blocks, Adegbite, said this will put an end the country’s over-reliance on imported bitumen for domestic road construction.
He alsosaid that the cost of road construction in Nigeria would ultimately go down with the production of local bitumen.
Adegbite stressed that local bitumen production would save the country foreign exchange and and boost her income.
According to the Minister, Nigeria’s bitumen deposits is ranked sixth in the world in terms of reserve size and has remained unexploited for years.
He said that the country was now poised to begin the production of bitumen locally as it had appointed a transaction advisor to oversee the process.
He said: “To ensure that Nigeria’s bitumen resources are fully harnessed for industrial and infrastructural development, I constituted a nine-member Ministerial Bitumen Development Committee on 31 January 2020. The Committee carried out an inventory of internal existing infrastructure; compiled available geological information; re-established contact with previous interested companies and developed a framework for transparent allocation of the Bitumen resources.
“An important part of the Committee’s recommendations was to finalize the process of engaging a Transaction Advisor to ensure the concession process is open, transparent and in accordance with global best practices as enshrined in the Nigerian Mineral and Mining Act, 2007. The Bureau of Public Procurement, issued a notification of no-objection on 16th June, 2021.
“Subsequently, the Ministry of Mines and Steel Development issued a letter of award on 11th November, 2021 to PricewaterhouseCoopers to act as its Transaction Advisor and Program Manager for the concessioning of bitumen blocks to potential investors.”
The minister revealed that many international and local investors had expressed interest in bidding for the bitumen blocks. Adegbite revealed that the country was endowed with high grade bitumen which was easy to mine due to its proximity to the surface.
He said: “My office has been bombarded by several interested party both locally and internationally and I have always told them to wait for when the process is opened for bidding, which would be transparent and in accordance with best international practices. There is so much interest in our bitumen because the mineral is of the highest grade and close to the surface which makes mining less expensive.’
The minister also assured prospective investors of the huge local demand for the mineral. “Nigeria’s population is projected to reach 400 million in 2050, up from the present estimate of 203 million, given the present population growth rate of 2.5 percent.
” The World Bank projects that Nigeria’s current urbanization rate of 52% will increase by 4% annually. Furthermore, 90 percent of goods, such as food and building materials, are transported by road to meet the demands of this rising population. This will increase demand for road infrastructure and put additional strain on the current road network, resulting in higher demand for asphalt for construction and maintenance. Bitumen is a crucial component of asphalt that is used in road construction and once we begin to produce bitumen locally we will have a stable price that does not fluctuate with the exchange rate,’ he said.
The minister further revealed that the nation had a huge infrastructural deficit with regard to paved road. He disclosed that only about 60,000 km
out of 200,000 km of road networks was paved, which presented an inherent demand for bitumen.
“This considerable road infrastructure deficit presents an inherent demand for bitumen. Hence, the development of Bitumen will lead to import substitution, local content development and increased value addition of the mining industry to the domestic economy, thereby creating jobs and generating revenue for government,” he said.
The Minister of State for Mines, Dr Uche Ogah, noted in his remarks that the ministry’s plan to develop bitumen was in fulfillment of the mandate given it by Mr. president, to diversify the economy away from oil.