- Dangote/BUA Rift: Edo Shuts Obu Mines
The Edo State Government has ordered the immediate shutdown of the mines in dispute between the Dangote Group and BUA International Limited at Obu in Okpella community, Etsako East Local Government Area of the state.
This just as leaders of the community have called on President Muhammadu Buhari to intervene in the matter in order to ensure an amicable resolution and avert a crisis.
Governor Godwin Obaseki, who announced the closure of the mines during a meeting with some leaders from Okpella at the Government House, Benin City on Monday, explained that the decision was based on a directive from the Federal Ministry of Mines and Steel Development, and the need to prevent the breakdown of law and order in the area.
There had been claims and counter-claims about the ownership of the mines by the Dangote Group and BUA Group.
The Executive Director, Dangote Group, Mr. Devakumar Edwin, had in a statement on Sunday accused the BUA Group of illegal mining limestone deposits in its (Dangote) Mining Lease No. 2541.
However, BUA, through its Group Head of Corporate Communications, Otega Ogra, not only denied the allegation, but also accused the Dangote Group of ignoring a judicial process on the matter, adding that the firm had mining rights to the sites with ML 18912 and ML 18913.
But Obaseki said that the state government was following the rule of law by ensuring that laid down procedures for addressing such a dispute were adhered to.
He explained, “What we understand as a government is that there is a dispute or claims between two parties over an existing mining right and the Mining Act of 2007; the Federal Ministry of Mines, through its cadastre office, decides on who to and how to issue leases.
“In this particular case, there are multiple claims and they have now gone to court. We have documents from the Federal Ministry of Mines instructing that the party currently mining that particular site should vacate pending the outcome of the decision in court.
“So, the position of the Edo State Government today is that the court orders must be obeyed. The Federal Government’s instructions must be obeyed. That mine should be shut until the determination of the suit in court. Whoever the court says owns it will now have claim to the mine.”
The governor also allayed the fear that a total shutdown of the site would affect revenue generation as the factory located therein would still be functional.
Obaseki added, “My understanding is that this is one of several mines available to investors and I am not sure that it will affect the revenue, because I am not sure it will lead to a shutdown of that particular factory.
“In any case, we have to understand that both companies are currently building factories. BUA is expanding, Dangote is building and there is enough limestone in the area to feed all the plants. So, I am sure it is going to be resolved.”
Meanwhile, the affected community maintained that Obu was located in Edo State and not in Kogi State as was allegedly described by the ministry.
The community in an open letter signed by its lawyer, Mr. Ayuba Giwa, added, “In the result, the Presidency is prayed to do justice to all parties in this matter, including and particularly Okpella, where the host community of Komunio belongs, and in accordance with the Mining Cadastre Office’s new template for processing of consent for the acquisition of mineral rights/titles in Nigeria.”
In its reaction to the latest development, BUA said in a statement on Monday, “We heard of the alleged closing down of the Obu mines in Okpella, Edo State by the Governor of Edo State. Whilst this remains in the territory of hearsay, our position on this matter remains very clear. Just as the Edo state Government said in its statement, this is an issue no state government has jurisdiction over as it is a federal Issue.
“It is, however, interesting to note that the mine under contention, ML2541, has been claimed repeatedly by the Ministry of Mines and Dangote to be in Okene, Kogi State. Thus, we are curious and are at a great loss as to why the governor of Edo State is closing down a mine in Edo State, which has been claimed by the other parties involved to be outside his state in Okene, Kogi State and which the purported ML2541 licence also states clearly.
“The Ministry has written us prior and our response was published in our open letter to the President of the Federal Republic of Nigeria on December 4, 2017. This case remains in a competent court of jurisdiction, which has ordered all parties – BUA, Dangote, the Ministry of Mines and others – to maintain the status quo and we will continue to abide by the dictates of the court as a responsible corporate citizen.
“We are, however, yet to receive some form of official communication asking us to close our mining sites ML18912 and ML18913 in Edo State, thus this alleged closing down report still remains in the territory of hearsay. We will respond accordingly when and if we get an official communication from the proper authorities.”
Nigeria’s Big Oil-Refining Revamp Gets Off To A Slow Start
A year after shutting down all of its dilapidated refineries to figure out how to fix them, Nigeria still can’t say how much it will cost to do the work or where the money will come from.
Nigerian National Petroleum Corp. said it has finished the appraisal of its largest facility, but hasn’t completed the process at two others. Refining experts said the extended halt means the plants are at risk of rotting away and unlikely to restart on time.
“Things haven’t been looking good lately,” with Nigeria’s plants probably “completely out of action for some 18 months,” said Elitsa Georgieva, Executive Director at Citac, a consultant that specializes in African refining.
The dysfunction of its domestic refineries has long put Africa’s biggest oil producer in an ironic situation. It exports large volumes of crude to plants overseas, then pays a premium to import the fuels its customers produce.
Pledges to fix the facilities have been made and broken again and again over the years. For at least a decade, NNPC’s 445,000 barrels a day of refining capacity barely processed 20% of that amount.
The latest effort to fix the refineries was supposed to be different to the failed attempts that came before. The company had totally shut all three plants down by January 2020 to do a comprehensive appraisal, and set the ambitious target of having them all back up and running at 90% of capacity by 2023.
“The refineries have been deliberately shut down to allow for a thorough diagnosis,” said Kennie Obateru, an Abuja-based NNPC spokesman. “They can be fixed based on what the diagnosis reveals.”
The appraisal of the 210,000-barrel-a day Port Harcourt refinery has been completed and NNPC has called for bids for the necessary repairs, Obateru said. The company hasn’t determined how much the work will cost.
“It is when we close the bids, everything is analyzed and presented that we will know how much we need,” he said.
The diagnosis is underway at the 125,000-barrel-a-day Warri facility and should be complete before the end of the year, he said. After that, the study of the 110,000-barrel-a-day Kaduna plant will commence.
One year into the process, refining analysts are skeptical that all this work can be done by 2023.
“I don’t think anyone has a good understanding technically of what’s wrong with those refineries,” said Alan Gelder, vice president of refining, chemicals and oil markets at Wood Mackenzie Ltd. “They’re probably corroding, which makes it a very difficult proposition.”
NNPC reaffirmed its deadline and said there’s no reason the refineries, which are at least 40 years old, can’t be restored to full operation.
“There are refineries that are over a hundred years old still running, so age is not necessarily an impediment,” Obateru said.
There are parallel efforts backed by private companies to add to Nigeria’s capacity. Aliko Dangote, Africa’s richest person, is building a state-of-the-art 650,000 barrel-a-day refinery, which Citac estimates will start production in 2023.
Bringing NNPC’s Port Harcourt refinery to the same clean-fuel standards as Dangote’s modern plant would cost about $1.3 billion for the equipment, on top of whatever other repairs are required to get the facility running, Georgieva said.
NNPC is talking to oil-trading firms about $1 billion of prepayment deals that could finance the repairs at Port Harcourt, Reuters reported last week. Obateru declined to comment on the report, but said “I don’t envisage that we will have a problem getting people to invest.”
Food Inflation Hits Record High of 19.56 Percent in December 2020
Food Index, which measures prices of food items, grew by 19.56 percent in the month of December 2020 amid herdsmen attacks and flooding.
In the latest report from the National Bureau of Statistics (NBS), increases were recorded on Bread and cereals, Potatoes, Yam and other
tubers, Meat, Fruits, Vegetable, Fish and Oils and fats.
On month on monthly basis, the food sub-index rose by 2.05 percent in December 2020, 0.01 percent from 2.04 percent recorded in November 2020.
“The average annual rate of change of the Food sub-index for the twelve-month period ending December 2020 over the previous twelve-month average was 16.17 percent, 0.42 percent points from the average annual rate of change recorded in November 2020 (15.75) percent” the report stated.
Headline inflation number increased by 15.75 percent in the month of December 2020, up from 14.89 percent.
The report noted that increases were recorded in all COICOP divisions that yielded the Headline index.
On a month-on-month basis, “the urban index rose by 1.65 percent in December 2020, same as the rate recorded in November 2020, while the rural index also rose by 1.58 percent in December 2020, up by 0.02 percent above the rate that was recorded in November 2020 (1.56 percent).”
Nigeria’s Inflation Rate Rises to 15.75 Percent in December
Inflation rate in Africa’s largest economy, Nigeria, rose at the fastest pace in several months in the last month of 2020, according to the latest report from the National Bureau of Statistics (NBS).
Consumer Price Index (CPI), which measures inflation rate, increased by 15.75 percent year-on-year in December 2020, representing a 0.86 percent increment from the 14.89 percent attained in November.
On a monthly basis, headline inflation rose by 1.61 percent in the month of December, representing 0.01 percent increase from the 1,60 percent posted in the month of November.
Food gauge that measures prices of items in Africa’s largest economy increased by 19.56 percent in December from 18.30 percent in November.
NBS attributed the increase to the surge in prices of Bread and cereals, Potatoes, Yam and other tubers, Meat, Fruits, Vegetable, Fish and Oils and fats.
On a monthly basis, the food sub-index grew by 2.05 percent in December 2020, an increase of 0.01 percent points from 2.04 percent recorded in November 2020.
The more stable annual rate showed Food sub-index over the last 12 months increased by 0.42 percent points from 15.75 percent in November to 16.17 percent in December.
Herdsmen attacks, the rising cost of fuel, flooding and the wide exchange rate are some of the key factors impacting the cost of food items in Nigeria, especially in December when demands were the highest.
Still lack of enough fiscal buffer to cushion the effect of COVID-19 and ease forex scarcity also drag on raw materials necessary for the production of some import-dependent items.
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