TheCable

The federal government has announced plans to auction bitumen blocks in the third quarter of this year.

Olamilekan Adegbite, minister of mines and steel development, made the announcement in a statement issued by Ayodeji Adeyemi, his media aide, on Tuesday.

The minister was responding to an enquiry made by John Donnelly, the Australian High Commissioner, during his visit to the mines ministry.

According to the statement, Adegbite said the ministry is still gathering data on some of the bitumen fields in the country.

He also said the ministry is working on raising the quality of locally produced barite to the American Petroleum Institute (API) standard.

“A lot of people are interested in bitumen which is coming from both local and foreign investors. However, we are still acquiring data in some of the fields and once the data is in we will go for auctioning in the third quarter,” he said.

“The ministry had contracted a consultant to help raise standard in the local production of barite to ensure that the oil industry players begin to use barite produced in Nigeria as against importing from other countries.

“There is ample opportunity for investors in the barite segment of the sector. We are also working on the local production of barite. Barite is a critical weighting material in drilling fluids used in the oil industry.

“We have a lot of barite but the issue is that it is not produced to API standards. However, we are putting a system in place which would be ready to launch in about July. We have got the millers who can produce barite to API standard. Hence we will be able to compete with foreign ones and it would save Nigeria a lot of foreign exchange in import substitution.”

Adegbite noted that Ajaokuta steel plant will improve operations in the mining sector when fully functional.

He said the plant will lead to the development of 13 other minerals required in the production of steel.

The minister said the development of the Ajaokuta steel plant was slowed down by the coronavirus pandemic.

In his remarks, Donnelly said his country is willing to exercise needed patience in helping Nigeria develop its mining sector.

“Mining is such a long term venture. It takes about 15 to 20 years for a particular deposit to be identified, worked out and scoped out before you arrange the finances and start to develop and go into production. So we are a very patient people in the mining sector,” he said.