Nigeria to Prioritize Local Mineral Processing in New Mining License Guidelines
Nigeria is set to implement new guidelines that will only grant mining licenses to companies with plans for local mineral processing, announced a government spokesperson on Thursday.
This marks a departure from Nigeria’s longstanding policy of exporting raw materials, as African nations seek to maximize value from their mineral resources.
To encourage investment, Nigeria will offer incentives to investors, including tax waivers for importing mining equipment, simplified procedures for securing electricity generation licenses, full repatriation of profits, and enhanced security measures, according to Segun Tomori, spokesperson for Nigeria’s Minister of Solid Minerals Development.
Under the new guidelines, companies will need to demonstrate their commitment to setting up processing plants and adding value to the Nigerian economy in exchange for these incentives. However, Tomori did not specify when the guidelines would be finalized or implemented.
Dele Alake, the Minister of Solid Minerals Development, emphasized the importance of value addition for job creation and community development.
Alake, who chairs an African mining strategy group, advocates for maximizing local benefits from mineral exploration across the continent.
Nigeria, as Africa’s leading energy producer, has historically struggled to extract value from its abundant mineral resources. The underdeveloped mining sector contributes less than 1% to the country’s GDP.
Last year, Nigeria primarily exported tin ore and concentrates worth approximately 137.59 billion naira ($108.34 million) to China and Malaysia.
To attract more investment, Nigeria plans to issue more mining licenses, establish a state-owned solid minerals corporation offering investors a 75% stake, and deploy a special security unit to combat illegal mining. Additionally, efforts are underway to regulate artisanal miners by organizing them into cooperatives.
Foreign mining companies operating in Nigeria include Canada-based Thor Explorations, engaged in gold exploration, Chinese-owned Xiang Hui International Mining, which partners with local companies for gold processing, and Indian-owned African Natural Resources and Mines, constructing a $600 million iron ore processing plant in northern Nigeria.
