Mining and Processing of Zinc Ore for Export in Nigeria.

There are tremendous opportunities in the solid minerals sector in Nigeria and government has invested heavily in the generation of vital information on minerals which is critical for success in the mining business. The national policy on mineral metals in Nigeria has it’s main objectives

• Achieve a substantial increase in GDP contribution by the minerals sector;
• Generate quality Geoscience data;
• Establish a transparent licensing regime;
• Formalise artisanal and small scale mining operators;
• Poverty eradication through ASM operations;
• Employment generation;
• Wealth creation through value addition;
• Increase capacity of mineral based industries;
• Attract private investment capital;

An estimated thirty-five {35} industrial mineral in commercial quantity have been discovered in the country and zinc ore is one of such minerals.

Zinc is usually found associated with lead and an estimated 10 million tonnes of lead/zinc veins are spread over eight States of Nigeria have been found. Some of the states where zinc can be found include Nassarawa, Ebonyi, Plateau, Bauchi, Gombe amongst others.

The major uses of Zinc are
Anti – Corrosion coating on steel {Galvanizing}
Precision Components {Die Casting}
Construction Material
Brass
Pharmaceuticals and cosmetics


The investor can penetrate the market as a miner, trader/exporter or a processor.

Zinc commands a good share of the mineral market and a detailed analysis of the cost and profit of Zinc ore is given below.

Cost of 1 ton at site = N30, 000/MT
Cost of 60 tons = N1, 800,000
Cost of 2% PB =N93, 600 {When price is $650 and Quantity 60 tons}
Cost of transportation to site of Crushing/loading = N10, 000/3 tons
Cost of 60 tons =N200, 000{Please do know that this cost can be eliminated if the site is accessible}
Cost of Crushing @ N40/Bag = N48, 000 {since 1 ton = 20 bags of 50 KG each}
Cost of packaging = N5000
Cost loading to the truck @ N20/ Bag = N24, 000
Cost of transportation to Warehouse/Port = N180, 000/30 tons
=N360, 000/60 tons
Cost of Testing =N100, 000
Cost of Freight = N78, 000/20 FT Container
{Since 20 tons= one 20 FT container, N78, 000 * 3 = N234, 000
Warehousing = N100, 000
Deposition Fee = N150, 000 {Returnable after shipment of goods}
Agent Fee = N80, 000
Miscellaneous = N100, 000


Total = N 3,294,600

The Exporter/ Seller can get a contract at $650/MT for Copper Ore 20% and Zinc Ore 50% .Given that the Pro-Rata is $10/1%, then the calculation would be


60 * $650/MT = $39,000 @ $1/N120
=N4, 680,000

Profit = N4, 680,000- N 3,294,600 = N 1,385,400

If the Zinc and Copper content is actually 52% and 22% respectively, then the calculation would be

2% * $10 = $20

$650+ $20 = $670

$670* 60 = $40,200 @ $1/N120
=N4, 824,000

Profit = N4, 824,000 - N 3,294,600

=N1, 529,400.


It is always advisable to weigh the goods at the point of purchase and preferably 51/52 KG should be used instead of 50 KG because after breaking of the material, some part would be lost to dust and debris.

{PLEASE DO NOTE THE PRICES QUOTATED ABOVED FLUCTUATES, AT SUCH THE ANALYSIS ABOVE SHOULD SERVE FOR ANALYSIS ONLY. THEY SHOULD NOT USED WHEN NEGOTIATING FOR POSSIBLE CONTRACT/SALES. TO GET THE CURRENT COST ANALYSIS, CONTACT THE WRITER FOR A FEASIBILITY STUDY}

In the export of the zinc ore, some of the cost to consider includes cost of the ore at the site, cost of 2% PB, cost of transportation to site of crushing/loading {in case the mining site is not accessible to trucks},cost of crushing ,cost of packaging ,cost loading to the truck ,cost of transportation to warehouse/port ,cost of analysis, cost of freight ,Warehouse cost, deposit Fee, agent fee, NESS Fee and miscellaneous

Should you require a market report/feasibility study, supply contract or sourcing of the product from miners in Nigeria, please do contact the writer.

Anaekwe Everistus Nnamdi is a Business Development Consultant by day and blogs on investment opportunities in Nigeria by Night. He is the administrator of www.nigeriabusinessplace.com ,a forum focused on business in Nigeria.

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