Nigeria’s New Mining Policy: Encouraging Value Addition

Nigeria’s Minister of Mines, Dele Alake, has unveiled a new policy designed to incentivize foreign mining companies to increase their investments in the processing and refining of metals within the country. The primary objective is to promote value addition and generate employment opportunities.

Under the new licensing regulations, mining companies will be required to submit business plans for value addition as a prerequisite for obtaining licenses. This initiative forms part of Nigeria’s broader efforts to revitalize its mining sector and reduce its dependence on oil, with the overarching goal of economic diversification.

One noteworthy example of the kind of investment the government is seeking is exemplified by the involvement of Ganfeng Lithium Industry Ltd, a Chinese firm that is currently in the process of constructing a lithium processing facility in Nasarawa state. It is anticipated that this plant will process a substantial volume of lithium ore on a daily basis to facilitate the production of batteries for electric vehicles.

Nigeria, renowned for its rich reserves of resources including gold, limestone, and zinc, is resolute in its determination to attract investors to its underdeveloped mining industry. The country is intent on significantly enhancing the sector’s contribution to the gross domestic product.

In an effort to fortify the sector, the government has made substantial investments in data collection. The National Integrated Mineral Exploration Project (NIMEP) has received in excess of 15 billion naira ($19.6 million) in funding over a period of seven years for this specific purpose. The project has yielded noteworthy mineral discoveries, particularly in the lithium sector, which has captured international attention.

Moreover, Nigeria has recently announced intentions to establish a government-backed entity with the goal of drawing investments for the extraction of various minerals, comprising gold, coal, iron ore, baryte, lead, bitumen, and limestone.

These initiatives are of critical importance to the country as it endeavors to fortify its mining industry and lessen its reliance on oil. These measures represent a significant stride towards economic diversification and sustainable development in Nigeria.

In summary, Nigeria’s new mining policy underscores its determination to stimulate the mining sector and attract foreign investment. The government’s emphasis on value addition and industry modernization represents positive strides towards achieving economic diversification and sustainable development.

Source:
Camillus Eboh, Thomson Reuters