The minister of mines and steel development says the federal government will soon allow the bitumen reserve of 42.74 billion metric tonnes to undergo concession.
He said this is to solve the problem of over-reliance on imported bitumen for domestic road construction.
The minister made this known while briefing the newsmen on the concession of delineated bitumen blocks on Monday in Abuja.
He said 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.
Mr Adegbite said Nigeria’s population is growing and this will increase the 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, Nigeria currently has 200,000 km of road networks with only 60,000km worth of road paved,” he said.
“We have a total bitumen reserve size of 42.74 billion metric tonnes, which has remained unexploited for years.
“Nigeria’s 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 urbanisation 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 the demand of the rising population and it will put a strain on the current road network,” he said.
According to him, the ministry constituted a nine-member Ministerial Bitumen Development Committee on Jan. 31, 2021 to conduct an inventory to ensure bitumen is fully harnessed for industrial and infrastructural development,
He added that the inventory 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.
“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 sensitisation 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 2005 that were revoked due to the 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.
“Nigeria is endowed with a good quality of untapped bitumen,” Mr Azobu said.
“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 programmes had been lined up for the successful take-off of the concession to the right investors, adding that hopefully it will be concluded before the end of this year
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