The Federal Government (FG) says its bitumen reserve of 42.74 billion metric tonnes will soon undergo concession to solve over- reliance on imported bitumen for domestic road construction.
Minister of Mines and Steel Development, Olamilekan Adegbite, made this known while briefing newsmen on the concession of delineated bitumen blocks Monday in Abuja.
Adegbite said that the concession of the bitumen became imperative as Nigeria ranks sixth in the world in terms of reserve size, but still depends on importation for the construction of its roads among others.
According to him, Nigeria’s population is growing and this will increase the demand of road infrastructure and putting additional strain on the current road network, resulting in higher demand for asphalt for construction and maintenance.
“Bitumen is crucial component of asphalt that is used in road construction; Nigeria currently has 200,000 km of road networks with only 60,000km worth of road paved.
“We have a total bitumen reserve size of 42.74 billion metric tonnes, which has remained unexploited for years.
“Nigeria population is projected to reach 400 million in 2050, up from the present estimate of 203 million, given the population growth rate of 2.5 per cent.
“The World Bank projects that Nigeria’s current urbanization rate of 52 per cent will increase by four per cent annually.
” 90 per cent of goods , such as food and building materials are transported by road to meet demand of the rising population and it will put strain on the current road network,” he said.
He said to ensure that the bitumen are fully harnessed for industrial and infrastructural development, the ministry constituted a nine-member Ministerial Bitumen Development Committee on Jan. 31, 2021 to conduct inventory.
He said that the inventory compiled available geological information, re-established contact with previous interested companies and developed framework for transparent allocation of the bitumen resources.
“An important part of the committee’s recommendations was to finalize the process of engaging a “Transaction Advisor” to ensure the concession process is open, transparent and in accordance with global best practices.
“The ministry issued a letter of award on Nov.11, 2021 to PricewaterhouseCoopers (PwC) to act as its Transaction Advisor and Programme Manager for the concession of the bitumen block to potential investors.
”In continuation of our efforts to create awareness, the ministry in collaboration with the PwC will embark on a sensitization workshop and investor conference which will hold soon.
“The event will include a media launch and a technical working session and the event will help the Ministry to pitch the bitumen investment opportunity to potential local and foreign investors both in person and virtually,” he said.
The minister said that the concession would not fail like the previous bitumen concessions made in 2002 and the 2005 that were revoked due to failure of the concessionaires.
Speaking, Mr Cyril Azobu, the Partner/Mining Leader PwC and Member, Bitumen Steering Committee, said the PwC would support the Federal Government on the concession to the right investors.
According to Azobu, Nigeria is endowed with a good quality of untapped bitumen.
“Bitumen is a big demand all over the world, Nigeria can serve as a hub for local supply of bitumen or asphalt for export in sub-Sahara to other countries,” he said.
He said that programmes had been lined up for the successful take for the concession to the right investors, adding that hopefully it will be concluded before end of this year.
Dr Uchechukwu Ogah, the Minister of State, Mines and Steel Development, appreciated the committee for putting heads together for the concession process.
Ogah said that the process would create job opportunities for youths, save money spent on importation of the mineral and increase the Gross Domestic Products (GDP) of Nigeria among others.