Despite Revenue Dip, Nigeria Revokes Thousands of Mining Licences and Earns Big Bucks

The Mining Cadastre Office in Nigeria recently announced that it has generated a significant sum of N14.59 billion from 2018 to 2022 through the issuance of mining licences. According to the Director General, Obadiah Nkom, a total of 3,402 licences were revoked during this period due to non-usage. It is the office’s responsibility to ensure that only deserving individuals or entities are granted licences. Additionally, there continues to be a high demand for Nigerian coal on the global market.

In terms of revenue generation, the agency collected N1.55 billion, N2.38 billion, and N2.57 billion in 2018, 2019, and 2020, respectively. However, there was a decline in revenue from N4.3 billion in 2021 to N3.79 billion in 2022. Nkom attributed this decrease to internal operational changes that temporarily impacted revenue. He also expressed confidence that the implementation of the Electronic Mining Cadastre would lead to a significant increase in revenue generation.

Nkom pointed out that 100% of the agency’s revenues go to the federal government’s Treasury Single Account. The majority of the revenue comes from application, processing, and annual service fees, representing 50% of the annual revenue generated by the Ministry of Mines and Steel Development. President Muhammadu Buhari has renewed Nkom’s appointment for a second and final term of four years, starting from January 12, 2023.

In terms of the allocation of mining licences, Nkom explained that the agency adheres to the principles of ‘first come first served’ and ‘Use it or lose it.’ This means that licences must be put to use, or else they will be revoked after a 30-day notice of default has been issued. The goal is to ensure that Nigeria’s mineral wealth is managed in a way that maximises economic value and diversification.

In relation to revenue generation, Nkom stressed the importance of increased revenue to contribute to the country’s development and the wellbeing of its citizens. He detailed the various components of revenue generation, such as application fees, processing fees, and annual service fees. The transparent nature of the process has led to an increase in the number of applications for mining permits, both domestically and from foreign investors.

Additionally, the agency has taken steps to open zonal offices, making the licencing process more accessible and reducing the number of illegal miners. Nkom added that the agency is also working towards addressing coal sector development and supporting coal-to-power projects to provide alternative energy sources for citizens.

Although Nkom was initially appointed in 2019 for a four-year term, the agency has faced criticism over poor revenue generation, with an increase in the activities of illegal miners. Nonetheless, the agency has moved to revoke thousands of titles, with plans to revoke more in 2023.

In conclusion, the Nigeria Mining Cadastre Office continues to play a crucial role in the mining sector. Despite the challenges faced, its efforts have led to significant revenue generation and positive developments in streamlining the licencing process.