Energy

Nigeria considers banning barite importation

Minister of Mines and Steel Development, Olamilekan Adegbite, has stated that leakage has become one of the greatest obstacles to the development of Nigeria’s mining industry.

The Nigerian government says it is considering banning the importation of barite, a mineral used in the oil and gas industry, in an effort to boost local production and save the nation foreign exchange.

Such a ban would save at least $300 million annually, the government said but suggested it may raise import tariffs on the material in the alternative.

Olamilekan Adegbite, Minister of Mines and Steel Development, disclosed this while briefing journalists on Monday in Abuja. He said the government will be inaugurating “Made-in-Nigeria barite” on Thursday.

Mr Adegbite said that the inauguration, scheduled to hold in Port-Harcourt, would be a great achievement to the country and it would also save Forex for Nigeria.

“Barite is a mineral used in the oil and gas industry and Nigeria has the mineral all over the country, especially in Benue, Taraba, Adamawa, Nasarawa, Plateau, Gombe and Cross River states,” he said.

He said that 50 bags of barite milled would be showcased at the inauguration, adding that the mineral meant for the oil and gas industry was produced to meet American Petroleum Institute (API) standard set for oil industries.

“We have 50 bags as samples that have been produced and labelled proudly ‘Made-in-Nigeria’. What we have done as the ministry is to create linkages from the mines to the millers to the baggage and to the market.

“Nigeria has been spending US$ 300 million annually importing barite but this must stop; we will go to the Federal Executive Council (FEC) to protect barite local market.

“There are two ways to this, the council in its wisdom may ban the importation of barite out-rightly, that is one way or the council will choose tariff protection for the local barite.

“Now, Nigeria is ready to supply the local users with barite and also to export to other oil-producing countries such as Ghana, South Africa to earn foreign exchange through exportation,’’ he said.

Besides having applications in medical diagnostics, the oil and gas industry is the primary user of barite. It is used as a weighting agent in the drilling mud and the global demand for oil and natural gas has caused the price of barite to increase.

“The API standard says for barite to be used in the oil and gas industry, it must meet a minimum of 4.1 gravity, the barite we have in Nigeria is from 3.8 to 4.8 gravity, that means we have some that exceeded API standard.

“We will blend the 3.8 with the 4.8 gravity then we will get the average of 4.5 gravity and there about, that means we are above the 4.1 API minimum standard requirement,” the minister said.

“We have sensitised our miners on the API standard and the barite must be blended to acceptable powder of 0.3 macron, it must be a fine powder, if it is less than, it will hang on the drilling ring.

“We are also carrying various stakeholders along and with the local content body in the oil industry set up by the Government; the body will be in Port Harcourt for the inauguration.’’

He said that an online portal that would connect all these people and the users together has been set up to block the import of the product, as many of them would still prefer to import the mineral.

“We have set up the price per kilogramme, we set up our price well below as an offer to the market for a start.

“We don’t want it to be a government thing that is why the portal is set up to run on its own.

“With the portal set up, the miner gets its money from the portal once it supplies the barite, the millers get what is due to them and the person supplying the bags gets his money to enable them to pay royalty to the government.”

He said this achievement would encourage more miners to come into the industry and invest, adding that it would also create job opportunities for the youth.

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