The mining industry stakeholders have expressed their dissatisfaction regarding the lack of proper consultation preceding the recent announcement of new mining rates by the federal government. Dr Dele Alake, the Minister of Solid Minerals Development, revealed an upward adjustment of rates and charges for all activities in the mining sector on July 5. This move was said to be aimed at enhancing the sector for economic consolidation, with the implementation of qualitative measures cited as the rationale behind the decision. The adjustments are intended to elevate the level of services, enhance transaction traffic, and develop infrastructure.
The updated rates encompass an increase in mining lease licenses and royalty rates for specific minerals, particularly lithium, kunzite, and gold. In response to the announcement, the National President of the Miners Association of Nigeria (MAN), Dele Ayanleke, criticized the rates, stating that stakeholders are dissatisfied with the adjustments. Ayanleke raised concerns regarding the processes leading to the announcement and the overall state of the sector, particularly the imposition of multiple taxes on operators by state governments.
Ayanleke described the new rates as unrealistic and expressed dismay over the government’s failure to assert its authority on the matter, in light of unconstitutional regulations and excessively high charges imposed by state governments. He urged the federal government to engage with state authorities to address the widespread illegality in the regulatory and governance framework of the sector, which is adversely affecting mining operators.
The President of the Nigerian Mining and Geosciences Society (NMGS), Prof Akinade Olatunji, echoed similar sentiments, emphasizing that the issue lies not in the rate review itself, but rather in the lack of consultation in determining the new rates. Olatunji suggested that the Ministry utilized current selling prices of minerals as the basis for setting the fixed rates unilaterally, without sufficient input from relevant stakeholders. He warned that the substantial costs imposed by the new rates during the current economic challenges may force many operators out of business.
Olatunji proposed that the government should strengthen the Mines Inspectorate Division with more qualified personnel, provide them with adequate resources, and empower them to carry out their duties effectively to prevent revenue leakage and increase government revenue. He further expressed concerns that the new rates for exploration and mining leases might lead to the appropriation of the entire landscape by those with substantial financial resources. It’s noteworthy that 268 items were reviewed in the new rates regime.
Under the updated rates, investors seeking a mining lease license will be required to pay N3 million, while applicants for Small Scale Mining Lease (SSML) will face a fee of N300,000 for the first two cadastral units. The cost to obtain an Exploration Licence (EL) has been set at N600,000 for the first 100 cadastral units, while Quarry lease and reconnaissance permit will attract a charge of N300,000.
Additionally, specific minerals such as lithium ore lepidolite, kunzite, and lithium ore spodumene will be subject to varying royalty rates based on their current market value per tonne. These adjustments have sparked concerns among industry stakeholders, who fear the potential negative impact on operators and the overall state of the mining sector.