Federal Government Takes Action to Clean Up Mining Sector
In an endeavour to overhaul the mining sector, the Federal Government has rescinded a total of 924 dormant licences, following a previous revocation of 1,663 titles six months ago. The revocation encompasses 528 exploration licences, 20 mining licences, 101 quarry licences, and 273 small-scale mining licences (SSMLs). Dr. Dele Alake, the Minister of Solid Minerals Development, announced the revocation at a press briefing in Abuja, stating that affected parties were given ample notice through an official gazette published on December 27, 2023.
The licensees have been given 30 days to pay fines in order to qualify for consideration, with fines set at £25,000 for revoked Mining Licences, £18,750 for small-scale mining licences, and £12,500 for exploration licences. The notice allowed affected parties to regularise their status and provide explanations for the dormancy of their licences. While 963 licensees were notified, only 39 took immediate action or provided justifications for their operations.
This action is in line with the government’s commitment to implement the policy of “Use it or Lose it” as outlined in mining guidelines, ensuring that licences are actively utilised. Additionally, the Lagos Chamber of Commerce and Industry (LCCI) expressed concern over the poor performance of the solid mineral sector, citing its minimal contribution to the Gross Domestic Product (GDP) in the last two quarters.
According to the National Bureau of Statistics (NBS), the mining and quarrying sector contributed only 4.47 per cent to the GDP in the fourth quarter of 2023, a decline from previous quarters. Dr. Chinyere Almona, the Director-General of LCCI, highlighted various obstacles hampering the mining sector, including inadequate infrastructure, regulatory inconsistencies, limited access to financing, and security concerns. She emphasised the need for the government to review its strategy to attract mineral exploration investments and stimulate mining project development while abiding by sustainable growth principles.
The mining industry plays a critical role in the economic development of Nigeria, providing opportunities for growth and industrialisation. However, without addressing the challenges hindering its progress, the sector will continue to underperform and fail to reach its full potential. It is imperative for the government to take proactive measures to address these issues and create an enabling environment for the mining sector to thrive. By doing so, Nigeria can harness the wealth of its mineral resources and pave the way for sustainable economic growth and development.
