What Nigeria can learn from Australia’s mining sector
Providing over 750,000 jobs to its citizens, Australia’s mining industry is one of the world’s best and a good example for the Nigerian government, which plans to diversify the economy through a more structured and focused exploitation of abundant mineral resources.
The Minister of Solid Minerals Development, Mr. Kayode Fayemi said, Nigeria needs to learn from Australia’s mining sector which accounts for 8.5 percent of the country’s GDP compared to Nigeria’s 0.3 percent due to a large dependence on oil. Nigeria is endowed with numerous mineral resources which are underdeveloped- a new priority for Africa’s largest economy.
Nigeria has great similarities with Australia in terms of natural resources, healthy and fertile land.
The growth of Australia’s economy has taken place through the transformation of its natural resources. It has the largest low-cost uranium reserves in the world and is likely to remain among the world’s leading mineral nations.
According to Tony Makin, “Australia’s mining boom began 10 years ago, sparked by an extraordinary rise in world commodity prices, arising from strong demand for raw commodities in fast growing Asian economies, most notably China and India.” The mineral industry contributes largely to Australia’s export trade which has also contributed to better developing exporting equipment, services and technology.
The Australian government developed its mining sector with other companies in the country. Australia initiated some reforms to encourage flexibility and productivity. Taxation reforms have allowed new industries and helped the country remain competitive in a fast growing global economy.
Nigeria and Australia operate the same federal system hence laws are made by the three tiers of government. The state and the tertiary (local) government have legislative power which regulates mining activities. In Australia, each state has its own regulations governing the extraction of minerals. There are mining courts for adjudication of various cases, which can administer justice based on its jurisdiction.
Mining is a capital intensive enterprise as a huge sum of money is needed to construct mines, production facilities and sustain exploration. The Australian government makes use of project finances in all its mining and exploration related projects while public companies raise capital through their shareholders by undertaking capital raising.
Mining royalties are then paid to the states where the resources are mined and are regularly reviewed. The Australian government has no general mining legislation. The level of royalty and taxes vary based on the location and type of commodity mined. Australia has environmental laws made by each state and territory to govern the use of lands and exploration of raw materials. The environmental impact of mining activity is also assessed by relevant agencies in order to avert a negative impact of such activities on the land. States have mine inspections procedures and emergency management systems that advice the government on necessary policies and the need to adhere strictly to international standard on environmental management.
Nigeria does not necessarily have to establish trade agreements or international treaties with countries on its mining industry. Rather, free trade agreements should be signed with countries of relevance in order to boost trade relations. Australia has free trade agreements with countries like China, United States, among other countries.
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