CEM REPORT, MINING | The Nigerian Federal Government in a bid to create opportunities for investors has withdrawn 1,633 mineral titles issued to mining firms.
The Ministry of Solid Minerals Development stated that the revocation of licences was prompted by the non-payment of mandatory fees for annual service of ₦1,500 per cadastral unit, aiming to create opportunities for investors.
Dele Alake, the Minister of Solid Minerals and Development, stressing that the sector needs to meet international competitiveness and standards noted that despite warnings, mining companies, profiting from licences, failed to meet financial obligations, prompting the government’s decisive action.
He noted that the amount the companies are being asked to pay is peanuts compared to their revenue projections.
“It is indeed very unconscionable for corporate bodies making huge profits from mining to refuse to give the government its due by failing to pay their annual service fee. It is indeed a reasonable conjecture that such a company will be willing to pay royalties and honour its tax obligations to the government.”
The oil and gas sector has long been the dominant force in Nigeria’s mining industry, resulting in a neglect of other valuable mineral resources. However, Nigeria is endowed with abundant mineral deposits including coal, limestone, tin, gold, and tantalite. Notably, artisanal and small-scale mining (ASM) operations have thrived in various regions of the country- particularly rural areas-bolstering the overall output of the sector.
To encourage investment in the sector, the government has revised its policies and implemented incentives for investors. These include tax holidays, duty-free importation of mining equipment, and a streamlined process for obtaining mining licenses through a one-stop-shop system.
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The mining industry in Nigeria has faced impediments concerning a multifaceted regulatory framework and legal concerns. The presence of incongruous policies, overlapping jurisdiction between the federal and state governments, as well as unclear land tenure systems, have discouraged potential investors and hampered the growth of this sector. Furthermore, inadequate infrastructure such as transportation, power supply, and access to water resources present significant challenges for operators leading to heightened operational costs which do not bode well for prospective investors.
