Nigeria Takes Action on Dormant Mining Licences to Attract New Investors – Business Reform in the Nigerian Mining Sector
The federal government of Nigeria has taken a significant step in revoking an additional 924 dormant mineral licences, effective immediately. This decision is part of the government’s strategy to attract new investors into the mining sector and resolve the issue of dormant licences. Dele Alake, the minister of solid minerals development, stated that the affected titles consist of 528 exploration licences, 20 mining leases, 101 quarry licences, and 273 small-scale mining licences.
This recent development follows the revocation of over 1,600 mining titles in November, which were rescinded due to non-payment of statutory fees. These actions are part of extensive reforms in the sector focused on curtailing dormant licences and addressing the high rate of licence racketeering.
During a briefing on Wednesday, Minister Alake expressed concern about the prevalence of dormant mineral licences and the widespread licence racketeering in the sector. He stressed the government’s dedication to addressing these issues and rectifying the deficiencies in the licensing system.
The notice of revocation provided all concerned parties with a 30-day window to regularise their licence status and provide explanations for the dormancy of their licences. Minister Alake pointed out that out of the 963 licensees who were notified of the impending revocation, 39 either resumed operations immediately or provided valid reasons for the inactivity of their licences.
Furthermore, the ministry has implemented a policy to allow the reinstatement of revoked licences for those who are interested. However, interested parties must make restitution to the Federal Government through the payment of fines. The fine for large-scale companies seeking reinstatement of their mining licences is set at N10m, while small-scale mining licences and exploration licences carry fines of N7.5m and N5m respectively.
Minister Alake has given interested parties a 30-day window to approach the ministry through the mining cadastral office to express their intent for licence reinstatement, failing which they risk losing their licences.
In a move to attract new investors, the minister also announced that the affected Cadastral Units are now open for applications on a “first-come, first-served” basis. This decision aims to cleanse the licensing system and penalize those who have exploited the sector as a commercial opportunity.
The government’s actions mark a positive stride towards reforming the mining sector and creating a more appealing environment for local and international investors. This move is expected to propel growth and development in the Nigerian mining industry, fostering greater transparency and efficiency in the licensing process.
