Blessed with abundant natural resources, Edo State in Nigeria’s south-south region holds tremendous potential for investments in mineral exploration and mining. However, boosting private participation levels requires policy reforms that ensure transparency, infrastructure upgrades to facilitate extraction and export, and environmental safeguards around mining operations.
An Overview of Edo State
Located in the Niger Delta, Edo State spans a total land area of around 19,794 square kilometres with a population exceeding 4 million people. The state has a young demographic profile, with over 60% of its population under 30 years old.
Benin City serves as Edo’s capital and houses important institutions of governance and history, like the Oba of Benin’s palace. As the former capital of Nigeria, Benin City drives culture and tourism in Edo, which contributes around 20% to the state GDP outside of oil and gas.
Economy and Growth Drivers
Edo State contributes over 8% of Nigeria’s total oil and gas production. However, the government aims to diversify the state’s economy given the volatility of global crude prices. Focus areas include agriculture, which employs around 70% of Edo’s workforce, along with manufacturing, services, and solid mineral mining.
Urban centres like Benin City, Auchi, and Ekpoma drive service activity around trade, education, healthcare, and government services. Edo also leverages its rich forests, wildlife, and cultural heritage assets to boost tourism.
Exploiting the state’s solid mineral deposits offers substantial scope for mining investments to energise industrial growth.
Edo State’s Rich Mineral Endowments
Edo State is enormously endowed with over 27 certified mineral deposits across 120 locations. Talc, limestone, quarry, kaolin, feldspar, marble, and baryte are minerals found abundantly across Edo State.
Nigeria ranks as the world’s second-largest producer of talc. Edo State holds over 40 million metric tonnes of estimated talc reserves, primarily concentrated in Etsako, Akoko Edo, and Ewekoro LGAs. The mineral is crucial for use across paints, paper, plastic, rubber, ceramic, and cosmetic manufacturing.
Marble and limestone
Limestone deposits in excess of 100 million metric tonnes have been identified in the Okpella, North Ibie, Igarra, Somorika, and Akoko Edo areas of Edo State. The state also possesses fine-grade white marble deposits around the Igarra, Somorika, Ikpeshi, and Akoko Edo areas.
The mineral is much sought after by marble and cement production units as well as for decorative stone applications in architecture.
Edo State is reputed for its large reserves of kaolin clay exceeding 8 million metric tonnes around major localities like Ujoilen, Unuwazi, and Uzebba. The white clay mineral sees demand from manufacturers of ceramics, paint, paper, rubber, plastic, etc.
Found abundantly around Auchi, gypsum reserves in Edo State hold potential for cement and plaster manufacturing.
Edo has rich dolomite, granite, and gravel deposits, which provide raw materials for quarry operators supplying crushed stone aggregate and sand for Nigeria’s huge building and construction industry.
Previous geological surveys have discovered the occurrence of gemstone-quality emeralds, tourmaline, garnet, and aquamarine across Edo State, which hosts huge opportunities for mining investors.
Policy Reform Drivers for Growth in Mining Investments
Edo State unveiled an upgraded minerals and mining policy framework in 2018 to expand private investments through transparent, business-friendly regulations around exploration licences, land access, environmental protection, and supply chain support.
- Boost Edo State’s annual mineral sector contribution to GDP from 1% to over 20% by 2025.
- Create jobs for over 100,000 youths directly employed in mining operations by 2025.
- Enable ancillary economic activity around mining in logistics, equipment supply, and export markets.
- Set up a transparent online cadastre system for mineral title administration.
- Provide regulatory assistance to miners across permitting, licences, and approvals.
- Develop a new legal framework for mineral resource governance.
- Upgrade transport networks like roads and railway connectivity for mine sites.
- Ensure reliable power supply to mining locations via solar and gas-based captive plants.
- Provide logistics infrastructure like ore testing labs and mineral storage depots.
Supply Chain Development
- Offer financing assistance to local mining firms.
- Provide common facilities for mineral processing and beneficiation.
- Develop downstream industries around mining, like ceramics and cement production.
- Fix low royalty rates at 3% for high-volume minerals like limestone and gypsum.
- Levy higher 7% to 8% royalty rates for gemstones and precious metal ores.
- Allow 100% foreign ownership with full profit repatriation freedom.
Key Minerals and Investment Opportunities
With positive regulatory efforts underway, Edo State offers attractive investment prospects across its rich mineral portfolio spanning talc, gypsum, limestone, quarrying, marble, and kaolin.
Industrial and construction minerals
- Limestone Mining: Deposits across Okpella, North Ibie, Igarra, Somorika, and Akoko Edo hold opportunities for large-scale open-cast mining of cement-grade limestone. Investments in downstream cement, steel, and glass production can also utilise the mineral.
- Gypsum Mining: Significant gypsum reserves around the Auchi region can drive investments into plaster manufacturing to supply Nigeria’s real estate boom in a market dependent almost exclusively on imports currently. Gypsum brings scope for cement blending locally as well.
- Quarry Extraction: Vast deposits of high-grade dolomite and granite offer scope for mechanised quarrying close to burgeoning construction hotspots to supply aggregates for concrete and stones for infrastructure mega-projects in roads, housing, etc.
- Talc Production: Open-cast talc mining installations can leverage Edo’s estimated 40 million tonne resources, mainly concentrated around the Akoko Edo, Etsako, and Ewekoro areas. The mineral offers avenues for export-oriented manufacturers in the ceramics, paint, paper, rubber, and pharmaceutical industries.
Industrial and decorative stone mining
- Marble Quarrying – The quality white and black marbles around Igarra and Somorika have export potential while catering to rising domestic demand in tiles, monuments, sculptures etc. Investments in mechanical quarrying, processing, and polishing units are attractive.
- Kaolin Manufacturing: Abundant kaolin deposits support investments in kaolin processing plants, supplying clay material for diverse manufacturing sectors ranging from soaps and paints to glass, ceramics, and cement.
Detailed geological surveys confirming commercial viability could attract investments into specialist gemstone mining and processing around emerald, tourmaline, garnet, and aquamarine ores. Global demand for precious gemstones offers scope for high-value creation. However, small-scale artisanal mining poses risks around environmental damage and resource smuggling, which require regulatory oversight that is currently lacking.
Key Challenges Hampering Mining Investments
While rich in mineral wealth, Edo State suffers from critical constraints like poor infrastructure, inadequate security, and low technological capacity, which hamper private investments at scale in mining projects.
- Poor road connectivity hampers access to remote mineral deposits.
- Constant power outages inflate operating costs for mining firms.
- Limited mineral testing and handling infrastructure exists presently.
Low technical capacity
- Shortage of skilled manpower for large-scale mechanised mining
- Lack of domestic mineral processing and beneficiation expertise
- Weak capacity in mine engineering design and best practices
- The prevalence of illegal artisanal mining and cognate resource theft
- Porous borders allow the smuggling of precious minerals.
- Protection costs are high for mining locations and supply convoys.
- Illicit mining fuels soil erosion and land deterioration.
- Chemical effluents from small mines pollute groundwater sources.
- Regulatory capacity is lacking for checks and penalties.
- Complex land documentation affects site access for miners.
- Multiple levies inflate licencing costs for mining firms.
- Delays are common across permitting and operational approvals.
Strategic Imperatives for Unlocking Investment Potential
The Edo State government needs to address critical limitations around security, land access, infrastructure, financing, and environmental controls to enable larger investments by formal mining companies, including international miners.
- Fast-track construction plans for arterial roads and highways connecting mines
- Setup mineral processing parks with shared export logistics linkages.
- Develop stable power sources via solar and gas-fired plants at mine clusters.
Institutional capacity building
- Train local talent in mining engineering and geoscientific domains.
- Support R&D into mineral processing and beneficiation methods.
- Create a transparent e-platform for mining licences and approvals.
- Employ technology tools like drones for surveillance at mining sites.
- Set up dedicated police outposts at mineral zones for rapid response.
- Engage community watch groups to curb illegal mining and theft.
- Simplify land documentation needs for mineral site licences.
- Establish a single-window mechanism for operational approvals.
- Fix ceilings for local taxes and municipal levies on mining firms.
Environmental Best Practices
- Enforce strict checks and penalties around mine effluents.
- Mandate all miners to adopt sustainable, eco-friendly technologies.
- Rehabilitate abandoned artisanal pits and quarries.
- Offer preferential loans for mining equipment imports.
- Set up an infrastructure financing window for mine site developers.
- Provide financial aid for beneficiation facilities by processors.
Outlook for Mining Investments in Edo State
Edo State possesses the geological good fortune to build a vibrant formal mining industry across industrial and precious minerals worth over $10 billion annually, as per official estimates.
Harnessing this potential requires integrated efforts by policymakers around transparent regulations, infrastructure upgrades for connectivity and power availability, security mechanisms, and access reforms.
Attracting technology partners and external investments, including from China, Australia, and South Africa, can fast-track the adoption of mechanised large-scale mines across Edo State’s rich mineral belts. Significant expansion in mining investments will energise industrial growth, exports, government revenues, poverty alleviation, and environmental sustainability for local communities.
With land being a crucial factor in production, reforms need to balance mineral access for miners with fair compensation for farmers and villagers impacted by mining zones. Ultimately, a consensus-based approach that equitably compensates all stakeholders can sustainably unlock Edo State’s mineral wealth, driving equitable and inclusive growth.