Nigeria’s Mining Sector: Emphasizing Compliance and Restructuring

Title: Nigeria Implements Measures to Ensure Compliance in Mining Sector

The government of Nigeria has recently taken action to revoke the operating licenses of 1,663 mining operators due to their failure to pay annual service fees. Minister of Solid Minerals, Dele Alake, announced this decision, which highlights the government’s commitment to enforcing financial compliance and restructuring the mining industry.

The revocation of titles is a direct result of non-compliance with a 30-day notice of payment issued to defaulting titleholders in the country. Minister Alake has emphasized the government’s intent to maintain order, stating, “I, hereby, warn the previous holders of these titles to leave the relevant cadaster with immediate effect as security agencies shall work with the mines inspectorate of the ministry to apprehend any defaulter found on any of the areas where titles have been revoked.” This enforcement is supported by the Nigerian Minerals and Mining Act of 2007.

The affected licenses covered a wide range of minerals and locations across the country. Minister Alake stated that the decision to revoke these licenses followed a thorough review, which revealed a pattern of non-compliance with the mandatory annual service fees.

The annual service fees are an integral part of the regulatory framework, aimed at funding essential services related to mining activities in Nigeria. According to Minister Alake, the philosophy behind the Nigerian Minerals and Mining Act 2007 is to establish a transparent and comprehensive system for administering titles and enable a seamless transition from reconnaissance to exploration and mineral extraction. This system governs the conduct of participants in the sector, including entry and exit procedures, government obligations, and penalties for non-compliance.

In addition to revoking licenses, the government is considering an upward revision of the annual service fee. A roadmap for reinstating licenses has been outlined, which includes the prompt payment of outstanding service fees, adherence to environmental standards, and commitment to community development initiatives.

Minister Alake expressed his disapproval of corporate bodies neglecting to pay their annual service fees, calling it “unconscionable” for entities making substantial profits from mining.

The Nigerian government’s restructuring efforts seek to enforce compliance and promote a sustainable and socially responsible approach to mining in the long term.