How To Establish Successful Mining Business In Nigeria.

Mining Business In Nigeria is one of the lucrative sectors of the Nigeria economy, and because the power to commercialize it is vested in the government of Nigeria, every investor or company willing to engage in the mining sector requires a government approval or license to proceed with or without a mining lease.

Mining Business In Nigeria

Despite massive mineral wealth, the Nigerian mining  industry only accounts for 0.3% of the country’s GDP and this due to oil resources. The issue is resulting in Nigeria having to import processed minerals, even though it could be locally produced.

Nigeria has numerous natural resources like oil, coal, gold, and many more. Mining them and selling off as raw materials is a great business to establish.

We can assure you that you would sell the raw materials at a very good price. The major requirement to establishing a mining business in Nigeria  is obtaining a license and the necessary tools for the job.

Beginning  Of  Mining In Nigeria

The British colonial government created the Mineral Survey of the Northern Protectorates in 1903 with the Southern Protectorates following soon after.

Nigeria started major production of coal, tin and columbite by the 1940s. In 1956 when oil was discovered, the mineral industries suffered when the focus shifted to mining oil.

In the 1960s the Civil War led to expat mining experts leaving the country and mines being abandoned. Mining regulations drastically changed and productivity declined.

In the late 1990s the government started selling government-owned mining companies to private investors.

List Of Mining Opportunities In Nigeria:

1. Coal, Lignite and Coke Mining in Nigeria

Coal was first discovered in 1909 and the industry thrived for some years before the Civil War. Prior to the mining industry’s privatisation, the Nigerian Coal Corporation held the monopoly on mining, processing and selling coal, lignite and coke products.

Despite the war ending in the 1970s the coal industry did not recover. Attempts to mechanise the industry in the 1970s and 1980s failed and were ultimately abandoned

2. Gold Mining in Nigeria

Abundant gold deposits exist in Northern Nigeria in Anka, Maru, Malele, Tsohon, Osun, Birnin, Gwari-Kwaga, Bin Yauri, Gurmana and Iperindo.

Production started in 1913 and peaked in the 1930s before declining during the war. Mines were abandoned and like the coal industry, the gold mining industry also didn’t recover.

Although there are no large-scale gold mining operations in Nigeria currently, there is some small-scale gold mining done by artists. The leading gold miners in Nigeria are a family from Anka called Alye.

3. Iron Ore Mining in Nigeria

The purest deposits of iron ore in Nigeria is in Itakpe in the Kogi State. As one of the operational mining industries in Nigeria, the country is exploring exporting iron ore in excess of domestic requirements.

The government of Nigeria has also invested in iron ore operations in Guinea.

4. Uranium Mining in Nigeria

The British Geological Survey recently discovered several major uranium deposits in Adamawa State, Plateau State, Taraba State, Cross River State, Kano State and Bauchi State.

The existing uranium mining assets are being liquidated as in 2016. It is not known whether the recent discoveries will be further explored.

How To Establish Successful Mining Business In Nigeria:

There was a time when Nigeria’s mining sector was booming, particular coal mining. Up until the late 1960s, this sector contributed significantly to the country’s GDP (see sidebar).

Today, it is estimated that Nigeria is endowed with about 34 solid minerals identified in 450 locations in the country.

These include bitumen, located in the states of Ondo, Ogun, Lagos and Edo; gold located in Kogi, Niger and Kaduna; lithium located in Ekiti, Kaduna and Nasarawa; and uranium in Bauchi and Taraba states to name a few.

However, to start a successful mining business in Nigeria, applications for mineral titles and licenses are considered on a first step to starting mining business in Nigeria.

It is also requires mining business plan, documentations at the mining cadaster office, mining business proposal and mining related business ideas. The following are the step by step to starting a successful mining business in Nigeria.

1. Seek Permit From Nigeria Mining Cadastre

The Mining Cadastre Office within the Ministry of Mines and Steel Development (MMSD) is responsible for the issuance of mining licenses and permit.

The MMSD is responsible for identifying the nation’s solid minerals, advising government on the formulation and execution of laws and regulations guiding the various stages of prospecting, quarrying, and mining; and handling sale and consumption of solid minerals in the country, through the issuance of Permits, Licenses, Leases and Collection of rents, Fees and Royalties.

2. Understand the Nigerian Mining Policy

The Federal Government in a bid to develop the mining sector and its commitment to diversification of the economy through mining influenced the issuance of the Nigerian Mining Growth Roadmap.

This roadmap is a comprehensive policy which underscores the potential for an increase in the sector’s contribution to GDP.

The roadmap also articulates the federal government’s strategy to develop the mining sector as a key frontier of the Nigerian economy and supports the forecast that a concentrated exploration of Nigeria’s solid minerals wealth may in the short term exceed her oil wealth.

3. Obtain Mining licenses

All the mining licenses and permit can be classified under the Mineral Titles, they serve different purposes and their conditions for issuance come with different requirements. It is important to separately highlight the various licenses:

  1. Reconnaissance Permit
  2. Exploration Licence
  3. Small Scale Mining Lease
  4. Mining Lease
  5. Quarry Lease
  6. Water Use Permit
  7. Possess or Purchase License
  8. Mineral Buying Center License
  9. Export License

Requirements For Obtain Mining licenses In Nigeria

Before going into the steps involved in applying for a mining lease in Nigeria, it is important to identify the various requirements for each stage of the process. The requirements for a mining lease and a small scale mining lease are the same, they are:

1. Pre – grant conditions:

The following documents are to be submitted with the duly completed application forms

  • Pre-Feasibility Report with COMEG seal and signature
  • Prospecting plan / reserve estimatio
  • Extant Exploration licence
  • Evidence of financial capability
  • Evidence of technical competence
  • Irrevocable consent from land owners or occupiers.
  • Attestation of non-conviction of criminal offences under the Act
  • Evidence of payment of processing fee
  • Certified true copy of certificate of incorporation.
  • Minerals to be exploited
  • Survey plan of specified area to be submitted
  • Notice to land owners (private or state land) with a response on rate to be paid
2. Pre-Development conditions (post-grant)
  • Environmental Impact Assessment (EIA)
  • Community Development Agreement (CDA) copy to be Submitted to MCO and all relevant departments in the Ministry
  • Compensation -(section 107)
  • Mine Closure plan/Rehabilitation plan
  • Reports from state bodies/ MIREMCO

How To Apply For Mining Opportunities In Nigeria

The following are the steps involved in the application for Mining Opportunities In Nigeria:

Step 1:

The applicant is to obtain the application form depending on the category of lease he is applying for from Mining Cadastre Offices or download same from the website.

Step 2:

Applicant is to fill the Application form providing necessary information and submit same in 3 copies along with the required documents and make payment of the required processing fees to the MCO.

Every submitted application is usually assigned with an identifying code and registered with date, hour and minute in the priority register dully signed and an acknowledgment copy will be given to the applicant.

Step 3:

Upon submission and receipt of an application, the MCO shall notify land owner or occupiers in order to obtain an irrevocable consent to be submitted to MCO within 7 days.

The applicant shall be duly informed to effect necessary corrections where applicable within a period of 5 working days; and if no response within the specified period, the application shall be rejected without any refund.

Where all information have been verified, the MCO shall input spatial and non- spatial data of the application into its system after which the application is further evaluated and recommended.

Step 4:

Upon evaluation and recommendation, the applicant is granted a lease, license or permit. Having granted the lease, license or permit, the applicant is expected to pay the Annual Service Fee within two weeks, the fee is a one of the pre- requisite before collection of the license or permit or lease.

If the applicant fails to pay the Annual Service Fees within fourteen (14) days after collection of the notification of grant, the grant shall automatically be withdrawn.

Application Fees For Mining Lease In Nigeria

Services Mining Lease Small Scale Lease
Application Processing fee N50,000 N10,000
Annual Service Fee N25,000 N10,000
Renewal Fee N250,000 N30,000
Late Renewal N100,000 N100,000

Process Of Granting License or Permit

If a licence is granted, the applicant shall be informed and be given two weeks within which to pay the annual service fee for a mining licence before the licence can be collected. The lease lasts for a period of 25 years.

However, if the applicant fails to pay the annual service fees within fourteen days after collection of the notification of grant, the grant shall automatically be withdrawn. Generally, it takes the MCO 45 days to process a mining licence/lease after receiving the application.

Why Nigerian Mining Industry an Opportunities for Foreign Investors:

Nigeria is endowed with numerous mineral resources such as talc, iron ore, bitumen, gold, rock salt, gypsum, lead/zinc, coal, gemstones, kaolin, tantalite, bentonite and baryte located in different parts of the country in commercial quantity.

In order to encourage foreign investment in the mining industry the government has put in place incentives such as grant of a three-year tax holiday to new mining companies which may be extended for one further period of two years.

Mining operators are granted exemption from payment of customs and import duties in respect of plant, machinery, equipment and accessories imported specifically and exclusively for mining operations.

The Nigeria  government also grants mineral titles to allow suitable investors to explore for, mine and market mineral resources. Thus the role of the government has transformed from that of ‘owner-operator’ to ‘administrator-regulator’.

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