Nigeria’s solid mineral sector is set to undergo a significant transformation as the government plans to grant mining licenses to local companies only.
This move marks a departure from the country’s long-standing practice of exporting raw materials, as African nations increasingly seek to extract more value from their mineral deposits.
In order to attract investment, Nigeria will offer a range of incentives to investors, including tax waivers for importing mining equipment. Additionally, the government will streamline the process for securing electricity generation licenses and allow for the full repatriation of profits. Enhanced security measures will also be implemented to ensure the safety of mining operations.
However, the granting of mining licenses will be contingent upon companies presenting a detailed plan outlining how they intend to process minerals locally.
This requirement reflects the government’s commitment to creating jobs and benefiting local communities through value addition activities.
Segun Tomori, a spokesperson for Nigeria’s minister of solid minerals development, emphasized the importance of adding value to the Nigerian economy. He stated, “In exchange for these incentives, we must review each company’s plans for establishing a processing plant and determine how they will contribute to the growth and development of our nation.”
While an exact timeline for the implementation of these guidelines has not been provided, the minister of solid minerals development, Dele Alake, confirmed that value addition has become a central condition for obtaining mining licenses.
Dele Alake, who also chairs an African mining strategy group comprised of mining ministers from several countries, including Uganda, the Democratic Republic of the Congo, and Sierra Leone, is advocating for a concerted effort across the continent to maximize local benefits from mineral exploration.
Nigeria, as the leading energy producer in Africa, has struggled to fully capitalize on its abundant mineral resources due to lack of incentives and neglect.
This is evident in the underdeveloped mining sector, which currently contributes less than 1% to the country’s gross domestic product. However, the government is taking steps to address this issue and attract more investment into the sector.
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