Nigeria will only grant mining licenses to companies that process their production locally

(Ecofin Agency) – While the value of all solid minerals present in the Nigerian underground is estimated at $700 billion, the sector represents only 0.45% of the country’s GDP, whose economy remains highly dependent on crude oil prices on the international market.

Nigeria will issue new mining licenses only to companies that present a plan for local mineral processing, in line with new guidelines currently being developed, a spokesman for Nigeria’s Minister of Solid Minerals Development, Segun Tomori, announced on Thursday, March 28, 2024.

“Nigeria will offer incentives to investors, including tax exemption on importation of mining equipment, ease of obtaining permits for power generation, full repatriation of profits and enhanced security. In turn, we must consider their plans to set up the factory and how they will add value to the Nigerian economy,” he stated, without specifying the deadlines for the entry into force of the new measures.

According to official figures, Nigeria is home to 44 solid minerals including gold, iron ore, coal, tin, zinc, nickel and lithium. These minerals are distributed in more than 500 listed localities. Some of them exist in abundance underground. This especially applies to iron ore, whose reserves in the country are estimated at 2 billion tons. In addition, coal resources are estimated at several billion tons, while minerals such as gold and tin are also believed to be present in significant quantities.

The value of all solid mineral resources present underground in the continent’s most populous country is estimated at $700 billion, according to Nigerian officials. However, the sector contributed only 0.45% of GDP in 2020, according to calculations by the Extractive Industries Transparency Initiative (EITI).

As part of its strategy to increase the contribution of the mining sector to the economy, the Nigerian government plans to issue new mining licenses and offer investors at least a 75% stake in Nigerian Solid Minerals Corp, a solid minerals company whose mission will be to exploit the country’s vast mining potential. He also established a special security unit to combat illegal miners, while he began to regulate the activities of artisanal miners by grouping them into cooperatives.

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