The government of Nigeria has recently taken resolute action by annulling 924 inactive mining titles, and encouraging potential investors to apply for these licences. In a bid to foster transparency and equity, the Minister of Mines and Steel, Dele Alake, has declared that the new licences will be allocated on a “first come, first served” basis. This decision forms part of a broader initiative aimed at revamping the mining sector in Nigeria.
According to Alake, the revocation affects a total of 528 exploration licences, 20 mining leases, 101 quarry licences, and 273 small-scale mining licences. This move is not unprecedented, as last year saw the nullification of over 1,600 mining titles due to non-payment of statutory fees. These reforms underscore the government’s commitment to establishing a more resilient and equitable environment for mining activities in the country.
One of the principal motivations behind these measures is the prevalence of “licence racketeering”, whereby individuals or companies acquire potentially lucrative titles only to sell them to the highest bidder. Alake stressed that this practice has given rise to a secondary, underground market for mineral licences, misleading investors and deterring legitimate investment in the sector. Through the revocation of dormant titles, the government aims to penalise those who have exploited opportunities in the sector, transforming it into what Alake described as a “bazaar”.
In an effort to attract new investors, Nigeria is offering tax exemptions and unimpeded access to profits in the mining sector. With these incentives, the government aspires to reinvigorate an industry that has historically been underdeveloped. Furthermore, Nigeria has strengthened its mining laws for foreign companies, stipulating that licences will only be granted to companies that process their minerals domestically.
This recent development represents a significant stride towards fostering a more transparent and investment-friendly environment in Nigeria’s mining sector. By penalising those who abuse the system and instituting incentives for new investors, the government is striving to attract responsible and productive investment in the country’s mineral resources. These actions are aligned with Nigeria’s broader endeavours to promote economic growth and development.