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With local bitumen production,cost of road construction will fall- Minister

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By Victoria Onehi

The Minister of Mines and Steel Development Arch Olamilekan Adegbite, has said that the cost of road construction in the country would ultimately go down with the local production of bitumen.  

The minister disclosed this in Abuja yesterday during a press briefing on the concession of the delineated Nigerian bitumen blocks, as the nation commenced the process of local bitumen production.

Adegbite also observed that local bitumen production would save the country foreign exchange and generate income for the government. The minister disclosed that the country’s bitumen deposits is ranked sixth in the world in terms of reserve size.

He further said that the nation was endowed with a bitumen reserve size of 42.74 billion metric tonnes, which had 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. 

The minister 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.

“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 finalise 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 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.  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 urbanisation 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 Honorable Minister of State Dr Uche Ogah, while giving his remarks noted 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. Ogah also thanked the bitumen committee for the hard work it had done.

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