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Abia Partners Private Sector to Boost Revenue in Solid Minerals

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The Abia state government has engaged private investors in Public, Private Partnership (PPP) to maximise revenues from the state’s huge solid mineral deposits.

It has therefore invited core investors in a concession arrangement, whereby they will invest in the exploration and extraction of minerals in the state as enabled by the new federal government solid mineral policy.

The State Commissioner for Environment and Solid Mineral Development, Gabe Igboko, told reporters at the weekend that the shift to solid mineral resources and forestry among others was to end years of low optimisation, especially at a time of economic diversification.

Igboko explained that the plan to raise revenue had begun with the addition of Solid Minerals to Ministry of Environment, new road map on solid minerals recently approved by the federal government and passage of the solid mineral bill by the Abia State House of Assembly.

He added that the Ministry’s partnership and with concession agreement with Messrs. Redsticks Integrated Services Limited, as the sole agent for revenue collection, is the innovation introduced to drive the initiative.

Igboko said: “We didn’t really change what we met on ground, but fine-tuning what we met that is not the optimal. One of the things we did is to identify a team of consultant led by Dr. Abel Ekpunobi, because we know what he has done at the federal level. We are putting in knowledge of experts like Dr. Chuma Igbokwe as well.

“The government’s policies are always there and they are same across the country. The problem has never been having lofty policies but implementation of such policies in a transparent manner.

“In the area of solid minerals, our idea has been that the government cannot keep piloting its affairs the way it has been doing it over the years. Our chief consultant came up with a template. For most of these things to achieve maximum result, we have to concession, to identify competent organisations and we have the Mummy-Mummy Farms Limited and Redsticks Integrated Services Limited to handle the revenue generation aspect of the solid minerals. The innovative we have imbibed in the solid mineral aspect is already making waves.”

The commissioner said though the effort is not without resistance, both administrative and operational from beneficiaries of the hitherto skewed system. He, however, assured that efforts were on to redress the resistance in the interest of the state.

By the Abia State Sand Excavation and Quarry Sites Inspection, Registration, Loading and Maintenance Law, 2016, every quarry site, mining site or other solid minerals excavation site other than sand excavation site shall pay a registration fee of not less than N1million and not more than N5 million, which shall be renewable every year.

Every sand-dredging site shall pay a registration fee of not less than N500,000 and not more than N1 million, which shall also be renewable every year.

The law added that every sand excavation site shall pay a registration fee of not less than N50,000 and not more than N200,000. Every solid mineral site/ company, be it mining, quarry and/ or sand excavation or the like shall pay a maintenance fee of N50 per ton or others as may be prescribed by the ministry.

Every person loading any solid mineral in the state shall pay the requisite loading fee per ton to the ministry: chipping; gypsum; limestone and so on, N100 per ton. Kaolin, laterite/ sand N50 per ton.

Concessionaire to the Solid Mineral revenue project, Dr. Chuma Igbokwe, said the state is emulating Lagos to raise its IGR through partnership agreements.

“Among the five Igbo-speaking States, Abia has the most mineral resources, followed by Ebonyi State, then Imo, Enugu and Anambra. But in terms of development, the reverse is the case. Anambra is the first, followed by Enugu, Imo, Ebonyi and lastly, Abia. It is just a complete flip on its own. But the current governor has set up a good team that is set to revert that,” Igbokwe said.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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Energy

Egbin Decries N388B NBET Debt, Idle Capacity

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Egbin Power Plc, the biggest power station in Nigeria, has said it is owed N388bn by the Nigerian Bulk Electricity Trading Plc for electricity generated and fed into the national grid.

The company disclosed this on Tuesday during an oversight visit by the Senate Committee on Privatisation, led by its Chairman, Senator Theodore Orji, to the power station, located in Ikorodu, Lagos.

The government-owned NBET buys electricity in bulk from generation companies through Power Purchase Agreements and sells it to the distribution companies, which then supply it to the consumers.

The Group Managing Director, Sahara Power Group, Mr. Kola Adesina, told the lawmakers that the total amount owed to Egbin by NBET included money for actual energy wheeled out, interest for late payments and available capacity payments.

Egbin is one of the operating entities of Sahara Power Group, which is an affiliate of Sahara Group. The plant has an installed capacity of 1,320MW consisting of six turbines of 220 megawatts each.

The company said from 2020 till date, the plant had been unable to utilize 175MW of its available capacity due to gas and transmission constraints.

Adesina said, “At the time when we took over this asset, we were generating averagely 400MW of electricity; today, we are averaging about 800MW. At a point in time, we went as high as 1,100MW. Invariably, this is an asset of strategic importance to Nigeria.

“The plant needs to be nurtured and maintained. If you don’t give this plant gas, there won’t be electricity. Gas is not within our control.

“Our availability is limited to the regularity of gas that we receive. The more irregular the gas supply, the less likely there will be electricity.”

He noted that if the power generated at the station was not evacuated by the Transmission Company of Nigeria, it would be useless.

Adesina said, “Unfortunately, as of today, technology has not allowed the power of this size to be stored; so, we can’t keep it anywhere.

“So, invariably, we will have to switch off the plant, and when we switch off the plant, we have to pay our workers irrespective of whether there is gas or transmission.

“Sadly, the plant is aging. So, this plant requires more nurturing and maintenance for it to remain readily available for Nigerians.

“Now, where you have exchange rate move from N157/$1 during acquisition in 2013 to N502-N505/$1 in 2021, and the revenue profile is not in any way commensurate to that significant change, then we have a very serious problem.”

He said at the meeting of the Association of Power Generation Companies on Monday, members raised concern about the debts owed to them.

He added, “All the owners were there, and the concern that was expressed was that this money that is being owed, when are we going to get paid?

“The longer it takes us to be paid, the more detrimental to the health and wellbeing our machines and more importantly, to our staff.”

Adesina lamented that the country’s power generation had been hovering around 4,000MW in recent years.

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Oil Rises on U.S. Fuel Drawdowns Despite Surging Coronavirus Cases

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Oil prices climbed on Wednesday after industry data showed U.S. crude and product inventories fell more sharply than expected last week, reinforcing expectations that demand will outstrip supply growth even amid a surge in Covid-19 cases.

U.S. West Texas Intermediate (WTI) crude futures rose 48 cents, or 0.7%, to $72.13 a barrel, reversing Tuesday’s 0.4% decline.

Brent crude futures rose 34 cents, or 0.5%, to $74.82 a barrel, after shedding 2 cents on Tuesday in the first decline in six days.

Data from the American Petroleum Institute industry group showed U.S. crude stocks fell by 4.7 million barrels for the week ended July 23, gasoline inventories dropped by 6.2 million barrels and distillate stocks were down 1.9 million barrels, according to two market sources, who spoke on condition of anonymity.

That compared with analysts’ expectations for a 2.9 million fall in crude stocks, following a surprise rise in crude inventories the previous week in what was the first increase since May.

Traders are awaiting data from the U.S. Energy Information Administration (EIA) on Wednesday to confirm the drop in stocks.

“Most energy traders were unfazed by last week’s build, so expectations should be high for the EIA crude oil inventory data to confirm inventories resumed their declining trend,” OANDA analyst Edward Moya said in a research note.

On gasoline stocks, analysts had expected a 900,000 barrel decline drop in the week to July 23.

“The U.S. is still in peak driving season and everyone is trying to make the most of this summer,” Moya said.

Fuel demand expectations are undented by soaring cases of the highly infectious delta variant of the coronavirus in the United States, where the seven-day average for new cases has risen to 57,126. That is about a quarter of the pandemic peak.

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Oil Price Rises To $74.70 Despite Delta Variant

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Oil price inched higher on Tuesday despite the fast spreading COVID-19 Delta variant. Brent crude oil, against which Nigerian oil is priced gained, $0.20 or 0.27 percent to $74.70 per barrel on Tuesday at 12:05 am Nigerian time.

Delta variant is spreading in China, the world’s largest importer of crude oil, forcing crude oil investors to start cutting down on their oil demand projections.

The Delta variant is still spreading and China has started to clamp down on teapots, so their import growth would not be that much,” said Avtar Sandu, a senior commodities manager at Singapore’s Phillips Futures, referring to independent refiners.

Strong U.S. demand and expectations of tight supplies have helped crude oil to recover from a 7 percent slump recorded last Monday to mark their first gains in two to three weeks last week.

Global oil markets are expected to remain in deficit despite a decision by the Organization of the Petroleum Exporting Countries (OPEC) and allies, collectively known as OPEC+, to raise production through the rest of the year.

There is seemingly a battle within the energy complex between the prevailing supply deficit engineered by OPEC+ and the threat of the COVID-19 Delta variant in regions with low vaccination rates,” said StoneX analyst Kevin Solomon.

The slow take-up of vaccinations will continue to limit some upside in oil demand in those regions, and there will be intermittent spells in the recovery in the coming months.

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