The World Bank Report No: ISR6577 Implementation Status & Results Nigeria Sustainable Management of Mineral Resources (P086716) Public Disclosure Copy Operation Name: Sustainable Management of Mineral Resources (P086716) Project Stage: Implementation Seq.No: 15 Status: ARCHIVED Archive Date: 10-Oct-2011 Country: Nigeria Approval FY: 2005 Product Line: IBRD/IDA Region: AFRICA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Sustainable Management of Mineral Resources Project (SMMRP) Key Dates Board Approval Date 14-Dec-2004 Original Closing Date 30-Jun-2010 Planned Mid Term Review Date 01-May-2008 Last Archived ISR Date 10-Oct-2011 Effectiveness Date 25-Apr-2005 Revised Closing Date 30-May-2012 Actual Mid Term Review Date 01-May-2008 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to assist the Borrower in the implementation of a strategy designed to: (i) improve governance and technical capacity in the solid minerals sector to enable the sustainable management of mineral resources; and (ii) establish a basis for poverty reduction and rural economic renewal in selected areas of the territory of the Borrower via the development of non-farm income-generating opportunities through artisanal and small-scale mining and via diversification away from oil sources of income Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Economic development and livelihood diversification in artisanal and small-scale mining areas 48.90 Strengthening governance and transparency in mining 33.28 Private sector development 26.81 Project coordination and management 6.91 Public Disclosure Copy Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status Overview The project was prepared in response to Nigeria Government's express intent to promote the mining sector as one of the industries which could help diversify the largely petroleum- dependent economy. This objective remains relevant today since the Vision 2020 document for development and diversification of the Nigerian economy identifies the mining sector Page 1 of 7 The World Bank Report No: ISR6577 as one of the strategic industries which are expected to contribute to diversifying the Nigerian economy and increasing job creation in rural areas. Accordingly, the project has remained highly relevant for economic development and diversification. Feedback from central and local decision-makers confirms that project activities and outcomes have had a high relevance in the federal and state-level development strategy. The project design is well-aligned with client needs as well as global best practice since the project activities combine direct support to local economic development with focus on training and education of the next generation of sector professionals. Capacity building of current sector Public Disclosure Copy professionals has proved its relevance in the reinvigoration of an industry which had been neglected for decades. SMMRP implementation has been successful; stakeholder reviews (2007 and 2011) and feedback from industry, academia and local communities on the project are overwhelmingly positive. The important project achievements include: (i) Airborne geophysical surveys of the entire country have been completed, and Nigeria now has arguably the best and most modern geophysical coverage of any country in Africa, including map interpretations, hosted by the National Geological Survey Agency (NGSA). This information is of inestimable value to companies wishing to explore for minerals; (ii) A modern Mining Cadastre Office (MCO) is now in place and operational. The cadastre procedures are transparent, publicly available, non-discretionary; (iii) Modern mining law is now in place, fiscal regime for mining is updated and competitive, mining regulations developed and adopted in 2011; (iv) The project has contributed to the training of the next generation of Nigeria leaders for the mining sector. This is exemplified in the Nigeria Institute of Mining and Geosciences (NIMG) which is now operational and which has gone well beyond what was originally envisaged in the Project (the first batch of 32 students graduated in late 2011). Additional courses on mining accounting, governance, taxation and finance have targeted lecturers at various universities in the country and the topics are now mainstreamed into regular curricular in several universities in Nigeria. All of these project results contribute to the achievement of the first part of the Project Development Objective, i.e. promotion of governance, capacity development and sustainable sector development. Additional project results include: (v) The small grants program for artisanal and community based miners has had good success in improving the productivity, safety and working conditions, and livelihoods of the beneficiaries; (vi) The project assisted in development of new mineral product lines such as gemstones and dimension stone. Significant progress has been made to put Nigeria on the map in respect of its gemstones and to develop local commercial and residential construction markets for the locally mined dimension stones. These results contribute the achievement of the second part of the Project Development Objective, i.e. rural economic development and diversification in order to generate income from non-oil activities. Efficiency in use of resources compared to achievement of outcomes has been good; all original components have been completed. The majority of PDO and results indicators have achieved and exceeded targets while a few indicators have see marginal shortfalls (i.e. appr. 95% achievement). The ratio of operational costs to total budget is relatively high at 18.7%, but this is largely explained by the inclusion of NIMG and MCO development costs under "operating costs" as opposed to "consultant's services". The project will be completed in May 2012 and project components are being wrapped-up. Locations Country First Administrative Division Location Planned Actual Nigeria Sokoto State Sokoto State ✔ Public Disclosure Copy Nigeria Plateau State Plateau State ✔ Nigeria Gombe State Nafada ✔ Nigeria Kano State Kano State ✔ Nigeria Kaduna State Kaduna State ✔ Nigeria Bauchi State Bauchi State ✔ Nigeria Abuja Federal Capital Territory Abuja Federal Capital Territory ✔ Page 2 of 7 The World Bank Report No: ISR6577 Country First Administrative Division Location Planned Actual Nigeria Nassarawa State Nassarawa State ✔ Public Disclosure Copy Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Adoption of new mining law, regulations Yes/No Value No Yes Yes including environmental regulation for the Date 01-Apr-2005 01-Dec-2011 30-May-2012 sector Comments Mining law and regulations Achieved adopted and gazetted. Number of artisanal and small-scale mining Text Value 0 associations/ enterprises 1030 200 ASM associations/ associations and enterprises established and enterprises fully operational under a legal license Date 24-Apr-2005 16-Apr-2012 30-Jun-2010 Comments of which 475 certified and Achieved and exceeded inspected Mining Cadastre and ASM field offices staffed, Text Value No MCO MCO operational. 17 ASM 12 offices fully equipped and operational offices operational Date 24-Apr-2005 16-Apr-2012 30-May-2012 Comments Completed Achieved and exceeded Backlog of mining title applications at the MCO Yes/No Value No Yes Yes cleared Date 01-Apr-2005 16-Apr-2012 30-May-2012 Comments Achieved 50% increase in per cap. income for selected Percentage Value 0.00 48.50 50.00 small-grants recipients Date 01-Jul-2010 26-Apr-2012 30-May-2012 Comments Baseline 2010: NGN 651,844 Baseline 2010: NGN 651,844 Mostly achieved, deviation per ASM coop per ASM coop from target is insignificant and is largely as a result of late Public Disclosure Copy Sample size: 15 cooperatives End 2011 figure: NGN start-up due to suspension of from Batch 1 and 2 of ASM 968,131 per ASM coop. the activity. The sample is grants also very small to draw any This is 48.5% increase firm conclusions. A socio-economic survey was Other achievements point to launched but abandoned due Sample size: 15 ASM successful rural development to over-complicated design cooperatives; on average 1.5 and diversification: (i) Number and implementation year worth of reporting. Pre- of registered ASM operators constraints. grant financial figures are was 5 times higher than the unreliable or non-existent, the end target. (ii) Total job Page 3 of 7 The World Bank Report No: ISR6577 data is also not adjusted for creation exceeded end target the overall economic situation by 20%. in the country. Revenue data for sample enterprises will continue to be Public Disclosure Copy Data source: project monitored going forward by supervision and support. the ASM department of MMSD. The results indicate a positive trend. But the survey data are inconclusive since sample size is small and data reliability is weak. An original socio-economic survey was launched but abandoned due to over- complicated design and implementation constraints. Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Direct project beneficiaries Number Value 0.00 15000.00 3000.00 Date 25-Apr-2005 26-Apr-2012 30-May-2012 Comments 12250 small grants Achieved beneficiaries (of which 25% women) and 3000 training participants (of which 40% women) Female beneficiaries Percentage Value 0.00 28.00 20.00 Sub Type Supplemental Number of jobs formalized including self- Text Value 0 formalized jobs 250,000 200,000 formalized jobs Public Disclosure Copy employment in number of communities using Date 24-Apr-2005 16-Apr-2012 31-May-2012 matching grants Comments 2,000 mining licenses * 100 Achieved and exceeded employees + 1000 ASM cooperatives * 50 jobs (Exploration and reconnaissance permits not included) Page 4 of 7 The World Bank Report No: ISR6577 Sustainable environmental practices in ASM Text Value None 100% 100% of pilot projects communities, as measured by EIA in pilot Date 01-Apr-2005 16-Apr-2012 30-May-2012 areas Comments Selected ASM grant Achieved Public Disclosure Copy beneficiaries have completed safeguards screening. Env audit carried out in 2010, all recommendations being followed. Number of mining operators benefiting from Number Value 0.00 245.00 250.00 financing and business development Date 01-Apr-2005 26-Aug-2011 30-May-2012 assistance, number of mining cooperatives or Comments Six batches of ASM grants 98% achieved. The activity communities receiving grants were completed. Total of 245 incurred significant delays grant recipients. 162 ASM because of political hesitancy. cooperatives and 83 Implementation rate, once community grants started, has been strong. New private investment in the mining industry Amount(USD) Value 1000.00 100000000.00 Date 26-Aug-2011 30-Jun-2010 Comments Over 6,300 active licenses. Data not available. Contrary 50-60 international companies to expectations at entry, engaged in exploration work. compilation of this data has not been feasible. As a proxy, the minerals production statistics (see below) indicate industry activities which exceed the target Annual solid minerals production Amount(USD) Value 35000000.00 229000000.00 100000000.00 Date 01-Jan-2005 31-Dec-2010 30-May-2012 Comments 2005: royalties collected -- royalties collected in 2011: Achieved and exceeded NGN 215 mln (royalties: 4%) NGN 1,377 mln (mines => 215*25= NGN 5,375 inspectorate data) mln/150 = US$ 35 mln Public Disclosure Copy % of country covered by geophysical survey Text Value 40% 100% 100% Date 25-Apr-2005 16-Apr-2012 30-May-2012 Comments Geo-physical survey Achieved completed in 2010. In 2012: production of geo-physical maps, including radio-metrics, gravity and magnetics. Geo- chemical maps produced for 49 substances Page 5 of 7 The World Bank Report No: ISR6577 Number of licenses issued by Mining Cadastre Text Value 0 10,056 5,000 Date 25-Apr-2005 16-Apr-2012 30-May-2012 Comments Total applications: 14,110 Achieved and exceeded Public Disclosure Copy Licenses granted: 10,056 Refusal: 2,747 Pending: 1,007 Current valid licenses: 6,300 Data on Financial Performance (as of 26-Apr-2012) Financial Agreement(s) Key Dates Project Loan No. Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P086716 IDA-40120 Effective 14-Dec-2004 24-Jan-2005 25-Apr-2005 30-Jun-2010 30-May-2012 Disbursements (in Millions) Project Loan No. Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P086716 IDA-40120 Effective XDR 80.10 80.10 0.00 79.09 1.01 99.00 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation The project is approaching completion and as such activities are being wrapped up. There is a need for the Government of Nigeria to complete the final steps of establishing a Page 6 of 7 The World Bank Report No: ISR6577 Mineral Development Fund, which is aimed at continuing the reform program in terms of expanding the successes of the small grants program and advisory services for industry development. Restructuring History Public Disclosure Copy Level two Approved on 08-May-2012 Related Projects P122828-Nigeria: Sustainable Mgmt of Mineral Resources-add'l financing Public Disclosure Copy Page 7 of 7