Revamping Nigeria’s Mining Sector: Proposed 5% Fund for Host Communities

The Committee on Solid Minerals of the House of Representatives has presented a proposal to allocate 5% of the revenue from all mined minerals to the host communities. This proposal was announced by the Chairman of the Committee, Hon. Jonathan Gaza, during a Public Policy Dialogue in Abuja.

The legislation, known as the “Nigerian Minerals and Mining Act (Amendment) Bill”, is being sponsored by Hon. Jonathan Gbefwi and Hon. Benjamin Kalu. Gaza stressed that the bill aims to foster collaboration between states and the federal government to maximize the benefits of the sector.

A key aspect of the bill is the establishment of a mines inspection and environmental agency, which will oversee mining activities comprehensively. Additionally, the bill aims to address the lack of coordination between the federal and state governments by empowering the Mineral Resources and Environmental Management Committee (MIREMCO) to ensure effective and joint oversight.

The bill places significant emphasis on community development and environmental protection. It proposes that 5% of the revenue generated from all mined minerals be allocated to the host communities. This is a response to the informal nature of the mining sector, with the belief that the allocation can be reviewed and improved through this program. The bill also includes policies to enforce the environmental remediation fund, ensuring that the host communities are not left with degraded sites and that the environment is adequately protected and restored after mining activities.

The Deputy Speaker of the House of Representatives, Kalu, highlighted the challenges that have hindered the growth of Nigeria’s mining sector, such as insecurity, inadequate infrastructure, and a shortage of skilled labour. He emphasized that the nation’s vast mineral resources have remained largely untapped, overshadowed by over-reliance on oil.

Kalu expressed that the bill he co-sponsored, along with eight other mining bills, represents a turning point for the nation’s mineral wealth management. He proposed that a private-sector-led approach should be the governing philosophy in Nigeria’s mining sector, as it holds the key to unlocking the true potential of the industry.

The Deputy Speaker also emphasized the need for a partnership between the government and businesses, stating that such collaboration is essential to realizing the promising prospects of Nigeria’s mining sector. He pointed out that there are signs of renewed vigour in the industry, driven by a collective effort to diversify the economy, create jobs, and harness the potential of the country’s mineral resources.

With projects like the Segilola Gold Project in Osun state, governed by a private-sector-led lens, injecting millions of dollars into the economy and attracting much-needed investment, the mining industry is already showing progress. This is aligned with the 2016-2025 mining industry development roadmap, which aims to increase the sector’s GDP contribution to 3% by 2025.

The proposed amendments and initiatives outlined in the bill signal a step in the right direction for Nigeria’s mining sector. The emphasis on collaboration, environmental protection, and community development will be instrumental in unlocking the industry’s potential and contributing to the country’s economic growth.