Nigeria’s New Mining Policy Targets Local Processing for Companies
Nigeria is currently in the process of implementing a new strategy to enhance the value derived from its mineral resources by prioritising local mineral processing. Instead of exporting unprocessed raw materials, the government has announced its intention to exclusively grant new mining licences to companies that present a plan for local mineral processing, as per a report by Reuters.
Despite being Africa’s leading energy producer, Nigeria has historically struggled to derive substantial value from its vast mineral resources. The mining sector’s contribution to the nation’s gross domestic product has consistently remained below 1%, primarily due to insufficient incentives and negligence.
To combat this issue and attract greater investment into the mining industry, the government is enacting policy changes. It aims to issue additional licences and has established a state-owned solid minerals corporation, offering investors a 75% stake. Additionally, a special security unit has been formed to combat illegal mining activities.
Efforts are also underway to regulate the artisanal miners who currently dominate the sector, by organizing them into cooperatives.
Segun Tomori, a spokesperson for Nigeria’s minister of solid minerals development, has revealed that the government intends to offer tax waivers on mining equipment imports to stimulate more investments in the country. It also aims to streamline the process for securing electricity generation licences and facilitate full repatriation of profits from mining activities.
Tomori elucidated the rationale behind these measures, stating, “In exchange, we have to review their plans for setting up a plant and how they would add value to the Nigerian economy.”
Although the exact timeframe for the implementation of these guidelines was not specified, it is evident that Nigeria is making concerted efforts to rejuvenate its mining sector and maximize the value derived from its mineral resources.
In a report last year, Reuters detailed Nigeria’s plans to establish a state-backed minerals corporation, known as the Nigerian Solid Minerals Corporation, with a primary focus on the extraction of gold, coal, iron ore, bitumen, lead, limestone and baryte.
The introduction of these new policies and initiatives underscores Nigeria’s dedication to prioritising local mineral processing and maximising the benefits of its abundant mineral resources. By concentrating on value addition within the country, Nigeria aims to stimulate economic growth, attract investment, and create employment opportunities within the mining industry.
