MINING

MINING


Petroleum dominates the Nigerian economy: Virtually 100 percent of
export earnings and about four-fifths of government revenues are derived
from petroleum. Fluctuations in world oil prices therefore have a
dramatic effect on the Nigerian economy. Discovered in 1956, petroleum was
produced at a rate of 774 million barrels in 2002 from more than 150 oil
fields, mostly in the Niger Delta. About one-fifth of the oil fields are
offshore. Although Nigeria’s petroleum is expensive to produce, it
commands a high price because of its low sulfur content. Half of all
exports go to the United States, and most of the other half to Europe
Nigeria has Africa’s largest reserves of natural gas, most of which are
associated with the oil fields. Despite efforts to develop markets for
natural gas—including investment in gas-fired electrical installations, a
liquefied natural gas (LNG) plant, and fertilizer and chemical
ventures—about three-quarters of gas production is burned off rather than
diverted for use.

Production of coal has declined to about 63,000 metric tons, far less
than the late 1950s production, largely because the Enugu coalfields are
almost exhausted. The government is attempting to boost production by
developing new fields at Lafia and Obi in Benue State. Also in sharp
decline are production of tin (2,000 metric tons per year) and columbite,
which have been mined from alluvial gravels on the Jos Plateau since
1905 but which now yield about 1 percent of their late-1960s levels.
Other major mining operations include iron ore, which is exploited for the
steel industry.