NIGERIA’S mining sector undergoes a paradigm shift as the government unveils plans to grant new mining licences exclusively to companies committed to processing minerals locally. This strategic move, revealed by a government spokesperson on Thursday, marks a departure from Nigeria’s longstanding policy of predominantly exporting raw materials, aiming to enhance the value derived from its vast solid mineral deposits.
Segun Tomori, spokesperson for Nigeria’s Minister of Solid Minerals Development, outlined incentives designed to spur investment in the mining sector. These incentives include tax waivers for importing mining equipment, streamlined processes for securing electricity generation licences, full repatriation of profits, and heightened security measures.
‘In exchange, we have to review their plans for setting up a plant and how they would add value to the Nigerian economy,’ Tomori stated, emphasising the government’s emphasis on value addition and economic contribution.
Last week, Minister of Solid Minerals Development, Dele Alake, affirmed the government’s commitment to prioritising value addition as a prerequisite for obtaining mining licences, with a focus on job creation and community development.
Alake, who chairs an African mining strategy group comprising mining ministers from several countries, advocates for a continent-wide effort to maximise local benefits from mineral exploration.
Nigeria, Africa’s leading energy producer, aims to revitalise its underdeveloped mining sector, which currently contributes less than 1 percent of the country’s gross domestic product (GDP). Last year, Nigeria primarily exported tin ore and concentrates, predominantly to China and Malaysia.
To attract more investment, the government plans to issue additional licences, offering investors a 75 percent stake through a state-owned solid minerals corporation. Additionally, a special security unit has been established to combat illegal mining activities.
Efforts to regulate artisanal miners, who dominate the sector, involve organising them into cooperatives to streamline operations and enhance oversight.
Notable foreign mining companies operating in Nigeria include Canada-based Thor Explorations, engaged in gold exploration, Chinese-owned Xiang Hui International Mining, collaborating with a local company for gold processing, and Indian-owned African Natural Resources and Mines, investing in a $600 million iron ore processing plant in northern Nigeria.