Nigeria’s New Mining Guidelines to Boost Local Processing Firms

Nigeria Announces Stringent Requirements for New Mining Licences

Nigeria has recently made significant changes to its mining licensing policy, with a new focus on local mineral processing. Going forward, the government will only grant new mining licences to companies with concrete plans for processing minerals within the country, departing from the previous practice of exporting raw materials. This shift aligns with a broader trend across African governments to maximize the value derived from solid mineral deposits.

Segun Tomori, a spokesperson for Nigeria’s Minister of Solid Minerals Development, has stated that the government will provide incentives to attract investment in the sector. These incentives include tax waivers for importing mining equipment, a simplified process for securing electricity generation licences, full repatriation of profits, and enhanced security measures.

In return for these incentives, companies seeking mining licences will be required to outline their plans for establishing processing plants and demonstrate how they will contribute to the Nigerian economy. Although no specific timeline has been given for the implementation of the new guidelines, it is evident that the Nigerian government is committed to prioritising local processing and economic impact.

Dele Alake, the Minister of Solid Minerals Development, emphasised that the government’s policy now places a strong emphasis on adding value as a prerequisite for obtaining licences. This strategic shift aims to generate employment opportunities and support local communities. Alake, who also chairs an African mining strategy group, advocates for a continent-wide effort to ensure that mineral exploration results in maximum local benefits.

Despite Nigeria’s abundant mineral resources, the country has struggled to extract significant value due to poor incentives and historical neglect. The underdeveloped mining industry currently contributes less than 1 percent to the country’s gross domestic product. In 2023, Nigeria’s main mineral exports were tin ore and concentrates, with a total value of approximately 137.59 billion naira ($108.34 million), primarily destined for China and Malaysia.

To attract more investment, Nigeria plans to issue more mining licences, with a state-owned solid minerals corporation offering a 75 percent stake to investors. Furthermore, a special security unit has been established to combat illegal mining activities. The government is also working on regulating the artisanal mining sector by organising miners into cooperatives.

Some of the foreign mining companies currently operating in Nigeria include Canada-based Thor Explorations, Chinese-owned Xiang Hui International Mining, and Indian-owned African Natural Resources and Mines. These companies are engaged in various mineral exploration and processing projects across the country.

With these new developments, Nigeria aims to revitalize its mining sector and create opportunities for local processing firms to thrive. The focus on adding value locally has the potential to transform the industry and contribute to economic growth in Nigeria.