Fayemi was speaking at the annual Africa Down Under conference in Perth, Australia where he highlighted the role government is playing in seeing Nigeria shift away from relying on oil and gas and diversifying into mining.
He hopes to see a mining industry that contributes significantly to the economy within the next decade.
“Our mining code is also broadly modelled after Western Australia’s,” Fayemi highlights.
The minister has also introduced a number of incentives in Nigeria to encourage investment.
Corporate income tax for example will range between 20 and 30% – which is very competitive next to Australia (30%), Chile (20%), South Africa (28%) and the USA (40%).
Royalties for coal, gold, iron-ore and copper will also range at a small 3 – 5% which is definitely at the lower end of spectrum.
Nigeria is further offering a tax holiday for an initial period of three years from commencement of operations, with a possible two year extension, and is offering exemption from customs and import duties on mining equipment.
“Our lease duration is 25 years and even more importantly than this, the government of Nigeria does not require a stake in projects at any stage – companies can be wholly-owned by foreign investors.”
Thanks to a new road-map that outlines these incentives and financial aid and structures for potential mining investors, Fayemi is sure that Nigeria will successfully reposition and de-risk the country’s mining sector.
Nigeria will focus on rebuilding its minerals and mining; and related processing industry in three phases he presented to the conference audience:
- Phase 1: Win over domestic users of industrial minerals that currently import, to achieve import substitution.
- Phase 2: Focus on expanding domestic ore and mineral asset processing and beneficiation industry.
- Phase 3: Return to global ore and mineral markets at a market competitive price point.
In addition to investing in a range of initiatives including infrastructure investments, technical and engineering capacity, regulatory reform, re-organisation of the Ministry, and the expansion of access to financing to drive sector transformation; the ministry has also inaugurated a specialised team (the Mining Investment Strategy Team, MIST) to drive implementation of the road-map over the coming decade.
Financing solutions in place
The ministry has secured FG $100 million intervention fund for exploration, investments in infrastructure and the provision of low-interest finance .
To date, about $20 million has been deployed in conjunction with the Bank of Industry (BOI) as initial capital for a fund focused on supporting artisanal and small-scale miners.
A $150 million technical assistance fund from the World Bank has been secured to support sector development and the government is also actively working with NSIA, NSE and private sector to create a $600 million investment fund for mining sector.
Why Africa Down Under?
According to a statement by the Ministry, Nigeria’s participation at this year’s conference is expected to serve the following strategic objectives:
“Signal to the international mining community the country’s economic policy priorities which focus on the diversification of Nigeria’s revenue base by repositioning the mining sector for greater productivity.
“Showcase to potential investors, investment opportunities in the mining sector in Nigeria, existing incentives and on-going reforms.
“Take advantage of the attendance of key decision makers and influencers in the industry from all over the world to engage in high-level economic diplomacy, to address the misconceptions about Nigeria’s mining industry and business environment in general, that accounts for her low ranking on the global mining policy perception and ease-of-doing-business indices.
“Network with other government delegates (especially of African countries) and representatives of multilateral organisations, to explore potential areas of cooperation and to ensure Nigeria takes a lead and visible role in advancing the objectives of the African Mining Vision (AVM).
“Ensure robust tracking of the competitive activities of other mining countries towards identifying ways through which Nigeria can improve the marketability and competitiveness of our mining industry.
“Use the opportunity to learn best industry practices around the globe as well as new and improved technology adopted for mining operations and geological data gathering in other mining jurisdictions.”
Nigeria Mining Week key event for potential new investors and stakeholders
The second annual Nigeria Mining Week conference, hosted by the Ministry and Mines and Steel Development, takes place from 16 – 19 October in Abuja, Nigeria.
This is a key event for the country and essential for all those companies considering investment in the country.
For more information visit: www.nigeriaminingweek.com
Feature image credit: Laura Cornish / Mining Review Africa