Revocation of Mining Licences: An Insight into the Nigerian Government’s Position
The recent announcement by the Nigerian government regarding the revocation of licences of mining companies which have failed to enter into Community Development Agreements (CDAs) is a significant development in the mining sector. This decision, communicated by the Minister of Solid Minerals Development, Dele Alake, underscores the government’s stance on non-compliance and the failure of these companies to meet their obligations to the communities in which they operate.
The Ministry of Solid Minerals Development had previously revised guidelines for the production of the Community Development Agreement in November 2023. The CDA is a statutory provision that ensures the transfer of socio-economic benefits to mining host communities. It serves as a legal document that contains the obligations of the Mineral Title Holder (MTH) to host communities and vice versa.
During the BusinessDay Media Solid Minerals Conference in Abuja, Mr Alake emphasized the importance of these agreements and the consequences that mining companies will face if they do not adhere to the revised guidelines. He stressed that failure to sign the CDAs will result in the revocation of mining licences.
The Minister expressed his disappointment at the lack of compliance from mining companies, noting that only 18 companies signed CDAs with their communities last year. He also highlighted the stringent penalties that will be enforced on companies found to be in violation of the revised guidelines.
In addition to the revocation of licences, the Minister revealed that the Ministry of Solid Minerals Development had granted 499 licences to applicants involved in the business of purchasing and selling minerals in 2023. The licences primarily focused on minerals such as lithium, gold, tin, and coal, among others.
Mr Alake also underscored the need for an improved investment climate in Nigeria to attract foreign investors in the mining sector. He stated that Nigeria is rich in minerals, but it is essential to adopt international best practices and create a supportive environment for investors.
Furthermore, the Minister addressed the issue of illegal mining and the government’s efforts to formalize artisanal miners through the formation of co-operatives. He revealed that there are 2,329 registered artisanal miners co-operatives in the country, with 123 co-operatives registered in 2023. The ministry has provided extension services to these co-operatives to enhance their skills and techniques.
In an effort to support the operations of the artisanal mining sector, the Ministry of Solid Minerals Development has licensed 986 buying centres across the 36 states of the federation. This move aims to streamline the activities of artisanal miners and provide them with a legal basis to conduct their operations.
In conclusion, the Nigerian government’s decision to revoke mining licences over the failure to sign Community Development Agreements reflects its commitment to ensuring that mining host communities receive the socio-economic benefits they are entitled to. The efforts to streamline the mining sector and attract foreign investment demonstrate Nigeria’s dedication to creating a conducive environment for the mining industry to thrive.
