New mining licenses will be issued by the federal government solely to companies that propose a strategy for local mineral processing, as part of the new guidelines being established by the Ministry of Solid Minerals.
Segun Tomori, the spokesperson for the Minister of Solid Minerals, Dele Alake, announced the move, indicating a departure from Nigeria’s long-standing practice of exporting raw materials, aligning with the trend among African nations to gain more value from their mineral resources.
Recommended reading: FG revokes 1633 mining licences in Nigeria over unpaid fees
Tomori mentioned that the government aims to encourage investment by providing incentives such as tax breaks for importing mining machinery, facilitating the acquisition of electricity generation licenses, permitting the complete repatriation of profits, and enhancing security measures.
- He stated, “In exchange, we have to review their plans for setting up a plant and how they would add value to the Nigerian economy.”
Last week, Dele Alake, the Minister of Solid Minerals Development, declared that adding value locally would now be a prerequisite for acquiring mining licenses, with the aim of generating employment and supporting local communities.
Dele Alake, who chairs the African mining strategy group that includes mining ministers from Uganda, the Democratic Republic of Congo, Sierra Leone, Somalia, South Sudan, Botswana, Zambia, and Namibia, is advocating for a collective African initiative to ensure local communities gain substantial benefits from mineral exploration.
What you should know
Despite being Africa’s leading energy producer, Nigeria has struggled in leveraging its abundant mineral resources due to inadequate incentives and neglect.
The nation’s underdeveloped mining sector accounts for less than 1% of its gross domestic product.
The federal government is focusing on attracting more investment to the sector by increasing the issuance of licenses. It has established a state-owned corporation for solid minerals, granting investors a 75% ownership share, and has also created a special security unit dedicated to combating illegal mining activities.
