21 September 2020 – When in Nigeria, ask for the South African in Abuja. Not many South Africans have travelled to Nigeria. Less than a handful have started up their own companies in this complex business and political quagmire. Riaan van der Westhuizen is one, and his story is fascinating.
Three years ago, I was invited to attend a conference in Abuja, Nigeria. The aim of the conference, organised by the government of Nigeria, was to promote its aggressive drive to diversify the Nigerian economy away from oil. The three day event was attended by top government officials and we met vice president Yemi Osinbajo, who threw his full weight behind the Nigerian Ministry of Mines and Steel Developments’ attempts to market the country’s mineral wealth and attract foreign investors into the hinterland of Nigeria.
At the networking sessions I bumped into a few Canadian and Australian mining executives, who could not stop talking about the spectacular Nigerian geology. A few South African’s were there too, testing the waters of what they would have regarded as a no-go area a few years before. For most of them (as it was for me) it was their first trip to a country often portrayed, and perceived, by South Africans as dangerous and corrupt. But we were all pleasantly surprised. The Nigerians welcomed us with open arms, invited us to all sort of celebrations, we ate and drank like kings, and never felt threatened. Most of all, however, we were, like the Australians and Canadians, astounded by what sounded like a hidden treasure of geological wealth yet to be discovered.
After three long days, we flew back to Lagos from Abuja for a last dose of hyper-energy before heading back home. Soon after we landed in Johannesburg, with my head still spinning, I attempted to track down South African exploration geologists in Nigeria, but after a few futile hours put the story on the backburner, and eventually Nigeria disappeared off my radar. However, three years later, just before Covid-19 threw the earth of its orbit in March, I started getting reports of several discoveries and a growing appetite amongst junior mining companies to dirty their boots in this large West African state.
The more I started digging, the more geologists came to the fore with stories about drilling expeditions in various parts of Nigeria. Surprisingly, many of them were South African expats. Most could not stop singing the praises of the Nigerian countryside, and the amenable Nigerian government. The biggest attraction, nevertheless, was Nigeria’s rich orebodies, mostly unexplored, they said.
I was told about a South African who lived in Abuja, Nigeria, and decided to phone Riaan van der Westhuizen, CEO of Minutor Mining and Exploration, to try and determine whether all the fuss about Nigeria was justified. I didn’t ask Van der Westhuizen whether he was at that conference in Abuja three years ago when I interviewed him telephonically during lockdown in April. What I knew before I spoke to him, was that he is an outstanding geologist that spearheaded the South African exploration drive into Nigeria, and that his company, Minutor Mining and Exploration Services, is one of the major players in the Nigerian mining and exploration space. I also heard that Van der Westhuizen has the ear of the Nigerian Ministry of Mines and Steel Development and the national government.
Van der Westhuizen arrived in Nigeria on a whim almost seven years ago and has not left the country since then. He has extensive experience of working in various roles across Africa, but Nigeria, was nothing he has ever experienced.
“When I arrived, there was absolutely no exploration or mining infrastructure in place. Everything in Nigeria was geared towards the oil industry, and nobody knew anything about mining. We could not even find sampling bags,” says Van der Westhuizen.
After arriving in Nigeria Van der Westhuizen met his future Nigerian partners and not too long after that started exploration work in a country that he was hesitant of entering initially. “Nigeria has a bad reputation in South Africa. If you told me ten years ago that I would establish a company in Nigeria, I would have laughed at you. As an exploration geologist one works in extremely risky environments, but Nigeria was never on my bucket list. However, despite the initial reservations, we undertook several field trips, and soon realised that the country has some massive deposits with huge potential,” he says.
Despite their early success, it was an uphill battle from the word go and Nigeria continued pitching curveballs, But the South Africans held firm and soon established a Joint Venture (JV) called the Allied African International Mining Company, that today holds 100% interest in the Lapai and Kakini Hills gold projects and 50% of the Eggon Lead-Zinc project.
But drilling in Nigeria six years ago was not for the faint hearted, notwithstanding the fantastic results the company is able to show today at all five their early stage exploration projects across Nigeria. “Getting samples analysed, for example, was a major challenge. The country did not even have geological hammers or sampling bags. Sourcing geophysical equipment in Nigeria was a nightmare. We eventually found a local company that could manufacture the sampling bags, but we still had to send our drilling samples to Ghana, South Africa or to Europe, as there were no registered laboratories in Nigeria. To be issued with a Chain of Custody the samples had to be sent with a recognised courier company and we ended up paying USD50 per export and then the samples were not even completely analysed yet. The process was extremely costly and time consuming, and it could take up to six months before we had the final results,” says Van der Westhuizen.
A few years later, however, Canadian company MS Analytical established the first mining laboratory in the Nigerian capital Abuja, where Allied had their head office, which hastened the process significantly, and Van der Westhuizen and his team thrived.
Meanwhile there was such an increase in demand for exploration services in Nigeria, that Van der Westhuizen established Minutor Nigeria Exploration Services, which started off with only a few staff members. today, almost six years later, it has a full geophysical department with all the exploration equipment, on-site laboratories and it does geological sampling, analysis and interpretation.
In three years, the small South African company has grown to become the biggest exploration services company in Nigeria. Once the company started expanding, it became a challenge finding the appropriate skills in Nigeria though. The country has been focused on the oil industry for so long that the people Van der Westhuizen initially employed had little or no knowledge of how do explore for, or how to analyse solid mineral samples. “We spent a substantial amount of time and money on educating our local staff members to bring us the results that are required. That, of course, is an ongoing process,” he says.
At the Lapai gold project, the Allied African International Mining Company JV’s flagship gold project in the Niger State, the team has collected more than 1800 soil samples and 1200 grab samples, in addition to 250km of ground magnetics and 200m of trenching. Drilling at Lapai continued even during the worst of lockdown earlier this year and an announcement about the project is imminent. “On the Lapai property we have about 10km of proven mineralisation on surface with quartz veins ranging from 1m to 32m in width and values of up to 200 grams per tonne over a metre that we’ve measured on surface through channel sampling. The average grade is anything between 5 to 8 grams per tonne,” says Van der Westhuizen. Van der Westhuizen says that Minutor has a continuous pipeline of projects and the outlook for both the Allied African International Mining Company and Minutor Nigeria Exploration Services is extremely good.
Minutor assists their clients from the day one, which makes it easy for new entrants trying to establish mining companies in Nigeria, unlike the pioneer days when Van der Westhuizen first set foot in the country. “We will go in and find the target, secure the licensing, take care of community relations and do the environmental and social impact assessments, and do the initial drilling. In other words, we de-risk the entire project for investors,” he explains.
With a better exploration and mining infrastructure in place than a few years ago, today there are a host of geologists and geophysicists actively working in Nigeria. A new international accredited laboratory opened in Abuja recently and global law firms like FRA Williams has an office in Abuja, which makes it a lot easier to navigate the legal minefield of Nigeria.
It is a much softer landing for anybody entering Nigeria today than what it was in the frontier days when Van der Westhuizen and his crew arrived in Lagos. “Exploration companies have tax holidays of up the three years and new mining companies pay low royalties. The mining law in Nigeria is extremely investor friendly if the company exports commodities,” says Van der Westhuizen. Although it is not a requirement to have a local partner Van der Westhuizen advises that it is always an advantage to team up with a local from Nigeria. “Now is the right time to do business in Nigeria,” says Van der Westhuizen. “We were first movers and it paid off. if entrepreneurs wait another year or two, it will be too late,” he says.
But there was an elephant in the room, and I could not wait to ask him about the security situation. When in Nigeria, you get told by everybody that you should hire a security guard to accompany you. At times I wondered if it was not a money-making scheme, until I got told by another South African that he was kidnapped a few years ago and kept out at sea until his company paid ransom. “Yes, Van der Westhuizen says, security is still the number one concern. “But people have to realise that the risks are much higher in specific regions. There are certain areas in Nigeria where, no matter how big the deposit might be, one stays away from. “We don’t go near the northern and north eastern part where Boko Haram is active, and we also keep out of Zamfara State for security reasons. Our drilling crews, nevertheless, are able to move around freely in 30 of the 37 Nigerian States, although security is high on our list of priorities and we have armed guards from the Nigerian Defense Force that accompany our teams. It is probably not necessary, but we try to mitigate all the risks. We gather intelligence and continuously keep track of the security situation. Moreover, most of our project are located outside the high-risk areas,” he says.
Infrastructure is an on-going project for the Nigerian government, and they understand the importance of a well-functioning road, rail, port and electricity network. Most of the main roads are in extremely good condition, and where they are not, they are being upgraded. Van der Westhuizen says that new roads are being developed across the country. Electricity is a concern though, but the government has solid plans and active projects which are in the early stages of development to address the electricity gap. The World Bank is assisting Nigeria with upgrading the electricity network. Although van der Westhuizen says that there are shortages, it is not only a Nigerian issue, but an African one. “Most countries in Africa do have serious electricity issues but I do think that Nigeria is slowly but surely taking care of the problem, he adds. There are airports in most of the Nigerian states and regular flight to different parts of the country. “We have access to all our sites 12 months of the year which is great,” says Van der Westhuizen.
So, as a South African pioneer in Nigeria, what advice would Van der Westhuizen have for new entrants into the country with similar plans? “First, I would strongly advise to choose the right partners when you enter Nigeria. It is difficult to operate in Nigeria without a local partner, even though it is not a requirement. The other key risk is security, but that counts for most African countries. In countries like the DRC and parts of West Africa, security is also one of the major risk factors, but it is not something that cannot be managed. Very important is community relations and communication with the local population in the areas where you work, and again, it is no different to any other country in the world where you will do exploration work. The bottom line is to be sensible about going about your business, and consider the needs of the local communities,” says Van der Westhuizen.
Despite a boom in exploration and mining activity in Nigeria, there are still a number of opportunities for suppliers. Mining equipment, for example, is still in short supply and there are not many equipment dealers in the country. Van der Westhuizen orders most of his equipment and drilling rigs from Thor, a South African equipment manufacturer, or from suppliers in Ghana. When van der Westhuizen was initially invited to Nigeria many years ago, he says that his first instinct was to run away as fast as he could. But, in true South African style, he persisted and his determination to make it work has paid off years later. He admits that after so many years in Nigeria, it would be extremely difficult to leave his adopted country. The South African from Pretoria has become a Nigerian.