The Minister of Mines and Steel Development, Arc. Olamilekan Adegbite has said that the cost of road construction in the country would ultimately go down with the local production of bitumen.
Speaking at a press conference on the concession of the delineated Nigerian bitumen blocks as a process for local production today (April 25, 2022) in Abuja, he pointed out that local bitumen production would save the country foreign exchange and generate income for the government.
Adegbite revealed that Nigeria’s bitumen deposits are ranked sixth in the world in terms of reserve size, adding that the nation is endowed with 42.74 billion metric tonnes of bitumen which have 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.
“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 January 31, 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 finalise the process of engaging a transaction advisor to ensure the concession process is open, transparent and following 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 June 16, 2021.
“Subsequently, the Ministry of Mines and Steel Development issued a letter of award on November 11, 2021, to PricewaterhouseCoopers to act as its transaction advisor and programme manager for the concessioning of bitumen blocks to potential investors,” he said.
Also, the minister also 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.
“My office has been bombarded by several interested parties, locally and internationally. I have always told them to wait for the opening of the bidding process, which would be transparent and follow 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.”
Adegbite 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 per cent. The World Bank projects that Nigeria’s current urbanisation rate of 52 per cent will increase by 4 per cent annually. Furthermore, 90 per cent 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 added.
A statement by the minister’s special assistant on media, Ayodeji Adeyemi, said Adegbite further revealed that the nation had a huge infrastructural deficit concerning paved roads. He disclosed that only about 60,000 km of the 200,000 km of road networks are paved, presenting 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 the government,” he said.
In his remarks, the Minister of State, Mines and Steel Development, Dr. Uche Ogah, noted that the ministry’s plan to develop bitumen was in fulfilment of the mandate given by President Muhammdu Buhari, to diversify the economy away from oil. Ogah also thanked the bitumen committee for its hard work.