HomeBase MetalsNigeria provides high rates of return on mining investment says Minister

Nigeria provides high rates of return on mining investment says Minister

Speaking at the 6th Annual Nigeria Mining Week held on 16 & 17 November the Honourable Minister, Ministry of Mines and Steel Development, Olamilekan Adegbite, stated the country still provides one of the highest rates of return on mining investment.

“This is because our minerals are closer to the surface, conferring the advantage of lower cost of production when compared to other mining jurisdictions,” he explained.

A compelling addition to this optimistic outlook is the fact that Nigeria has also commenced the process of retrieving Nigeria’s colonial geological data from the United Kingdom by engaging the British Geological Survey (BGS) to build a national electronic geo-data archiving management system to be called the Nigerian Geo-data Centre at the Nigerian Geological Survey Agency (NGSA).

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This will provide easy access to geo-science data for prospective investors on potential areas to target for exploration and mining within and outside Nigeria.

The BGS will also integrate historical geo-data of Nigeria into NGSA and the National Steel Raw Materials Exploration Agency (NSRMEA) into the system.

“The Mining Cadastre Office has been repositioned to promote transparency in mineral title administration. The processes have been streamlined to enable investors to apply online and obtain licenses and leases within and outside Nigeria,” explained Olamilekan Adegbite.

Nigeria is endowed with over 44 different mineral types occurring in commercial quantities in over 500 locations across the 36 states and the Federal Capital Territory. These mineral endowments broadly cut across the various mineral spectrums.

“We have industrial minerals such as barite, kaolin, gypsum, feldspar, and limestone. We are endowed with energy minerals such as bitumen, lignite, and uranium and we also have metallic ore minerals such as gold, cassiterite, columbite, iron ore, lead-zinc, and copper,” pointed out Adegbite.

“In addition, there are construction mineral types such as granite, gravel, laterite, and sand. We also have the precious stone variety such as sapphire, tourmaline, emerald, topaz, amethyst, and garnet, just to mention a few.”

“This clearly demonstrates the wide mineral spectrum we are endowed with, which offers limitless opportunities for exploitation, job creation, revenue growth, and economic development. Out of the 44-mineral endowment, seven were selected for immediate development. They are coal, iron ore, bitumen, gold, limestone, lead-zinc, and barite.”

The Nigerian government has operationalized an Artisanal and Small-Scale Mining (ASM) Remote Sensing Monitoring System to regulate and support ASM activities. Through the Nigeria Integrated Exploration Programme (NIMEP), the government is building a strong geoscience base to enhance its competitiveness as a world-class mineral exploration destination that foreign investors will find attractive. This geoscience information will help in de-risking the sector.

Target minerals under the first phase include gold, lead, zinc, iron ore, and rare metals, among others. Delineated areas will be partitioned into blocks and transparently concessioned to financially competent investors.

“We are also establishing MCO offices in six geo-political zones. They include Jos, Enugu, Ibadan, Kaduna, Maiduguri, and Benin. From the revenue drive perspective, MCO has demonstrated marked improvement despite the challenges of the pandemic,” explains Adegbite.

“This grew its revenue from N2.3 billion in 2020 to N3.88 billion in 2021 as of October 31st, with two months still remaining in this year to achieve higher revenue. The secret of the sudden jump can be attributed to the introduction of “First Come, First Served” and “Use it or Lose it” in the licensing administration.”

This has helped to re-organize, eliminate speculators, and has led to the revocation of about 1,566 mineral titles. This has activated many dormant licences and increased revenue inflow into the treasury. The government has also institutionalized business-friendly incentives to further make the Nigerian mining sector more attractive to foreign investors.

The incentives include:

a. Customs and import duties waiver for plant, machinery and equipment imported for mining operations

b. Tax holidays of between three to five years as applicable.

c. Free transferability of funds and permission to retain and use earned foreign exchange

d. Capital allowances of up to 95% of qualifying capital expenditure

e. Deductibility of Environmental Costs  

f. 100% ownership of mineral properties.

Nigeria has adopted a forward-thinking approach by developing the strategic minerals of the future. These include minor metals such as titanium and cobalt, which are vital to futuristic industries such as telecoms and electric vehicle manufacturing.

This has created a business-friendly environment in the mining sector through reforms that grew out of the roadmap for the growth and development of the Nigerian mining industry.

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