Nigeria’s New Mining Policy Paves the Way for Local Beneficiation

Nigeria has recently achieved significant progress in its mining industry with the latest announcement from Thor Explorations. The company has successfully acquired interests in two licenses in southeast Senegal, advancing the Douta Gold Project to a preliminary feasibility stage.

One of the key milestones achieved by Thor Explorations is the acquisition of up to 85% interest in the strategically located Douta-West Licence, contiguous to the Douta Gold Project. Additionally, the company now holds up to 80% interest in the Sofita Licence, situated approximately 20 km south of the Douta Gold Project.

According to Segun Lawson, President and CEO of Thor Explorations, the company’s exploration strategy is focused on generating cash flow from its Segilola Gold Mine in Nigeria. The guidance for 2024 stands at 95,000 to 100,000 ounces, a significant accomplishment that will contribute to deleveraging the company’s balance sheet from its senior debt facility this year.

The Nigerian government recently announced a significant policy shift, deciding to only grant new mining licenses to companies that present plans for local mineral processing under new guidelines currently under development. This represents a departure from Nigeria’s longstanding policy of exporting raw materials and aligns with the resource nationalism movement in several African nations.

In the previous year, Nigeria exported predominantly tin ore and concentrates valued at approximately US$108.34 million, with China and Malaysia being the main destinations, as indicated by the country’s statistics bureau.

In an effort to reassure potential investors about this policy change, Nigeria plans to offer incentives such as tax waivers for importing mining equipment, streamlined processes for securing electricity generation licenses, full repatriation of profits, and enhanced security measures. These insights were shared by Segun Tomori, spokesperson for Nigeria’s Minister of Solid Minerals Development, Henry Dele Alake.

Henry Dele Alake, who also chairs an African mining strategy group comprising mining ministers from Uganda, the Democratic Republic of the Congo, Sierra Leone, Somalia, South Sudan, Botswana, Zambia, and Namibia, is advocating for a concerted continental effort to maximize local benefits from mineral exploration.

The government aims to attract more investment into the sector by increasing the issuance of licenses, establishing a state-owned solid minerals corporation offering investors a 75% stake, and setting up a special security unit to combat illegal mining activities.

Looking ahead, this policy revision holds immense significance for Nigeria. Despite being Africa’s leading energy producer, Nigeria has struggled to extract value from its vast mineral resources due to insufficient incentives and neglect. The underdeveloped mining sector currently contributes less than 1% to the country’s gross domestic product.

As the Nigeria Mining Week approaches, scheduled to take place between November 4-6 this year, there will be a comprehensive exploration of the latest developments and their implications. The conference aims to bring together stakeholders committed to positively influencing the industry’s trajectory, providing a platform to exchange insights and build a better future.

Nigeria Mining Week serves as a pivotal gathering where prominent mining entities convene to cultivate opportunities. It is a renowned business event, serving as a hub for industry leaders to share innovative ideas and forge alliances that drive innovation and new prospects.

The new development in Nigeria’s mining policy marks a significant milestone in the country’s efforts to ensure local beneficiation of its mineral resources. The shift towards promoting local processing of minerals signifies a departure from the country’s historical reliance on raw material exports and aligns with the broader movement towards resource nationalism across Africa.

As the industry prepares for the Nigeria Mining Week, there is palpable anticipation for the unveiling of further details and the opportunity to engage with the various stakeholders at the forefront of shaping the country’s mining landscape. The upcoming conference is poised to be a pivotal platform that will shed more light on the new direction of Nigeria’s mining sector and its potential impact on economic growth and sustainability.

For further information and to share your thoughts and comments on this new development, please reach out to Richard Jansen at [email protected]. Let your voice be heard as Nigeria charts a new course in its mining industry!