Dr. Innocent Ezuma is the Executive Chairman of Eta Zuma Group, an industrial organisation with interests in power, steel, production and mining. In this interview with FRANCIS KADIRI, he discusses the challenges of Nigeria’s industrial sector and why Jos Steel Rolling Mill, now Zuma Steel, remains unproductive, five years after it was acquired. Excerpts.
Why is Zuma Steel, formerly Jos Steel Rolling Mill, still unproductive even after Eta Zuma acquired it five years ago?
A steel rolling mill requires a lot of power, and that has been a major problem. We will so on restore it to production by setting up a power plant that uses coal. When we do this, we know the problem of power will be solved because with coal, the mill will be self-sustaining. We also need to expand and upgrade the facilities before we commence productivity.
Apart from power, what would you say are the challenges confronting the industrial sector?
There are challenges everywhere. In mining, finance is a major issue, and then comes the challenge of dealing with the interest of host communities; there is also the dearth of technology and human resources. But we are dealing with all of them.
One major challenge is the problem of illegal miners. Although government has planned to organise them into cooperatives, we are not sure illegal miners are willing to accept the offer.
It is sad when you see illegal miners take over a site you have legally
acquired.
Illegal mining has many consequences because the illegal miners do not conform to global best practices. Therefore, they challenge the environment; they challenge the economy because they pay no revenue; and they are not obliged to social requirements like community development as Corporate Social Responsibility.
Infrastructure deficit is another major challenge of the production sector because you need to evacuate raw materials like coal ore when you mine it. The cheaper way to evacuate coal is not by road, but by rail or waterways. In Nigeria, there are hardly rails for such purposes and the roads are bad.
The investment fund is from the private sector. There is a lot of risk and it is like groping in the dark because you are not sure of anything, yet it is a stage you must be courageous to embrace. Investors prefer a situation where critical data is available and returns are guaranteed as is the case with the oil and gas sector
Your company has been able to surmount challenges of exploration, one of the most critical stages in mining. Kindly share your experience.
It is easy for people to say that Nigeria is greatly endowed with solid minerals, but it is not as easy to get them out. First, you must have critical information about the availability of the mineral you wish to mine. It is only through exploration that you can do this, especially at the time Eta Zuma came into business. There was acute shortage of data needed to make reasonable projections.
We were determined and we were able to identify coal in commercial quantities and then we secured mining licences. Once we secured the licences, we started mining. We developed three mines at Okobo, Kogi State. We had challenges, but we surmounted all of them. Now, we are mining coal and there is great demand for it and we are selling to off-takers.
It is important to add that at the outset, we planned to mine coal that would be used in generating electricity, and this has started. We are now developing coal powered fire plant. We have passed through the regulatory requirement and we have made a lot of progress. We are now at the last stage.
Coal briquettes are one of the attempts to add value to coal. One thing about coal briquettes is that apart from being an attempt to add value to coal, briquettes will be used in cooking instead of firewood. Use of wood leads to deforestation, which is not friendly to the environment, because of the tendency to cut down trees.
Eta Zuma has a factory along Ankpa Anyigba road, which is already producing briquettes. We also have coal stoves, which we use alongside briquettes. The coal stoves are imported at the moment, but we have a plan to produce them locally.
We have a marble site and we are developing at EkirinAde. We also have iron ore sites, which we are still developing. Eta Zuma group provides solution to solid mineral exploration, mining and beneficiation. We support quite a number of client companies like Zuma 828, which has to do with coal mining. Another client company deals with limestone and marble, while Zuma Energy Limited deals with energy.
How readily do buyers get coal from you?
The country needs a lot of coal, so there is demand for it. What we produce now is not enough to meet the need of industries. We are hoping to expand production in order to meet demand. Cement factories now tend to use coal. Previously, they used to import coal, but they can now buy it locally because it is now locally available, and it is cheaper and delivered on time.
Exploration is capital intensive and the risk is high. How has your company been able to survive?
It’s all about determination and the conviction that the task must be executed. In this sector, you must explore in order to get critical data. It is capital intensive and has to be done. The investment fund is from the private sector. There is a lot of risk and it is like groping in the dark because you are not sure of anything, yet it is a stage you must be courageous to embrace.
Investors prefer a situation where critical data is available and returns are guaranteed as is the case with the oil and gas sector, which is not the case in mining.
Since exploration is critical to mining, yet can hardly be embarked upon as a result of funds, don’t you think this poses a serious challenge to the economic diversification agenda of the Federal Government?
The Minister of Mines and Steel Development recently assured us that government was doing a lot to address the problem. I would say a lot of things might have been done, but so much more needs to be done.
There is so much need to attract investors to the sector. Nigerian investors must understand that the mining sector is lucrative; however, returns do not come as quickly as they think. So they should remain focused and committed. A point of note is that the mineral resources are available, they are needed and the market is there.
How many state governments have keyed into your coal for power initiative?
I would not say there is any yet. We are doing our thing, bit by bit, and we are getting investors’ support from where we can, not the government. The state governments’ roles could be to grant us land in their states. Kogi State Government gave us land for our coal-powered plant at Itobe. May be some states will be inspired to participate as investors as we make further progress. In any case, the states, especially the people of the communities that host our industries, are the beneficiaries. We provide jobs. They also have access to power and enjoy the taxes
we pay.
What is your staff strength?
Our staff strength is currently about 550, but that is just about 10 per cent of what we expect it to be when we finally start operating the power plants.
