The Federal Government, through the Ministry of Solid Minerals Development, has issued a seven-day deadline for a fact-finding committee to assess the impact of gold mining operations in Osun State. The directive is aimed at resolving a growing dispute between the Osun State Government and Thor Explorations Limited, the company behind Segilola Resources Operating Limited (SROL).
This announcement was made by Dr. Dele Alake, the Minister of Solid Minerals Development, via his official X account on Wednesday, October 9, 2024. The committee’s primary focus is to evaluate the operations at Segilola Gold Mine and determine their impact on the local communities and broader economy.
The move comes in the wake of tensions between the state and federal governments over the regulation of mining activities, with potential implications for Nigeria’s foreign investment climate.
Osun State Government’s Action Against SROL
The Osun State Government took drastic steps on September 30, 2024, by sealing off SROL’s business premises. The state accused the company of “flagrant tax violations” and unethical business practices, with an alleged tax evasion amounting to roughly $1.9 million. The government claimed that a court order had permitted them to confiscate the company’s assets, citing non-compliance with tax laws and other operational concerns.
The Segilola Gold Mine, managed by SROL, is a key player in Nigeria’s gold mining sector. According to the company’s reports, the mine has completed two full years of production, recording a total output of 98,006 ounces in 2022 and 84,609 ounces in 2023. The company has set a production target of 95,000 to 100,000 ounces of gold for 2024.
Federal Government’s Concern for Investment Climate
The decision by Osun State to close down the mine has raised alarms at the federal level, particularly regarding Nigeria’s efforts to attract Foreign Direct Investment (FDI). Just four days before announcing the fact-finding mission, Dr. Alake had publicly urged the Osun State Government to reconsider actions that might jeopardize national efforts to lure foreign investors into the solid minerals sector.
Alake stressed that while compliance with laws on taxation, environmental responsibility, and corporate social responsibility (CSR) is crucial, the authority to regulate mining activities rests solely with the Federal Government. Mining, he noted, is on the exclusive legislative list, meaning state governments do not have the authority to disrupt mining operations unilaterally.
“Mining companies must follow all applicable laws,” Alake stated. “However, subnational authorities cannot act independently in shutting down mining operations. The Federal Government is the sole entity responsible for overseeing and regulating these activities.”
He warned that actions such as the closure of mining sites by state governments could harm the nation’s economic prospects, potentially leading to a loss of confidence among foreign investors. In an increasingly competitive global market, the minister underscored the importance of maintaining stability in the sector.
Terms of Reference for the Committee
In response to the escalating dispute, Alake inaugurated a fact-finding committee to assess the situation and present its findings within a week. The committee has been tasked with identifying the root causes of the conflict, examining the contractual agreements between the Osun State Government and SROL, and evaluating the impact of the company’s operations on the surrounding communities and Nigeria’s economy.
“The committee has seven days to submit its report,” Alake emphasized, signaling the government’s intent to resolve the matter swiftly.
Composition of the Fact-Finding Team
The committee will be chaired by Dr. Mary Ogbe, the Permanent Secretary of the Ministry of Solid Minerals Development. It will also include representatives from key federal agencies such as the Federal Inland Revenue Service (FIRS), the Ministry of Labour and Employment, and the National Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA).
This broad representation underscores the Federal Government’s determination to take a balanced and comprehensive approach to resolving the issue, considering not only the economic implications but also the welfare of local communities and workers.
The Impact on Nigeria’s Investment Drive
Dr. Alake has been a vocal advocate for promoting Nigeria’s solid minerals sector as a key driver of economic growth. Since assuming office, he has been involved in efforts to attract investors from across the globe to the country’s mining industry. The Segilola Gold Mine represents a cornerstone of these efforts, being one of the largest and most productive mining sites in Nigeria.
The minister expressed concern that the closure of mining operations by state authorities could lead to a significant setback for these efforts. He pointed out that such actions could not only drive away potential investors but also lead existing companies to reconsider their positions in Nigeria. This could have a ripple effect, with divestments and job losses following closely behind.
“It is crucial to recognize that shutting down mining operations by subnational governments could jeopardize our efforts to attract Foreign Direct Investments (FDI) and may even lead to divestment by existing companies,” Alake warned.
The Need for Industrial Harmony
The dispute between the Osun State Government and Thor Explorations Limited has broader implications for industrial harmony in the region. Many workers and their families rely on the income generated by the Segilola Gold Mine, and prolonged disruptions in its operations could lead to widespread economic hardship.
Alake stressed the importance of maintaining peace and cooperation between all parties involved, noting that the workers and their families should not bear the brunt of the conflict. “It is essential for both parties to pursue peace and industrial harmony for the benefit of the workers and their families who could be negatively affected by the closure of operations at the factory,” he said.
The Federal Government is keen to ensure that the dispute does not escalate further and that mining operations in Osun State resume without further disruptions.
Conclusion
The Federal Government’s intervention in the dispute between the Osun State Government and SROL is a crucial step toward protecting Nigeria’s reputation as a stable investment destination. By forming a fact-finding committee and emphasizing the exclusive federal oversight of mining activities, the government hopes to bring a swift resolution to the issue.
The seven-day deadline set for the committee’s report reflects the urgency with which the Federal Government is approaching the matter. Ultimately, the goal is to ensure that mining operations can continue without interruption, benefiting not only the communities in Osun State but also the broader Nigerian economy. The resolution of this dispute will be a test of the Federal Government’s ability to balance local concerns with national economic interests and foreign investment strategies.
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