By Yange Ikyaa
Nigerian government has resolved to give the best of incentives that have never been found anywhere in the world to any interested and serious investors in the country’s mining sector.
The country’s Minister of Mines and Steel Development, Olamilekan Adegbite, has been wooing investors abroad with geological data on huge deposits of gold, iron-ore, barite, and the associated lead-zinc formations in Nigeria.
In mid-May at the ‘2022 Prospectors & Developers Association of Canada (PDAC) International Convention, Trade Show and Investors Exchange’ in Toronto, Canada, Adegbite revealed in his paper titled ‘The Mechanisms of Transparency and Commitment in Mining Governance as a Tool for Attracting Foreign Direct Investment to Nigeria’ that Nigeria’s solid minerals are ranked among the best in quality and quantity.
These minerals are also known to be rated highest in return on investment because they are closer to surface and are associated with low cost of production. The Nigerian Government has been focusing seriously on the solid minerals sector, which investors and investments being top on its priority list.
As far as policies are concerned, the mining sector is being made very business friendly in order to promote ease of doing business, as this has been built on strong policy and regulatory structures over the years.
Speaking at the summit, Adegbite said “we are here to collaborate and network with global leaders, professionals, investors, chief executives of junior, mid-tier and major mining companies.
“It is also on this premise that the Ministry of Mines and Steel Development, in collaboration with industry stakeholders, vowed to pull resources and consolidate on the 2016 Roadmap for the Growth and Development of the Nigerian Mining Industry.
“In pursuit of the goals set forth in the roadmap, the government initiated an ambitious reform regime in the sector, the flagship of which was the National Integrated Mineral Exploration Programme (NIMEP), designed to rapidly generate bankable geoscientific data with the aim of de-risking the sector and attracting high caliber investments.
“Target minerals under the first phase include Gold, Lead-Zinc, Iron Ore, and the Battery Minerals, among others. The contractors have executed and completed the exploration works on Gold, Platinum Group of Elements (PGEs), Lead-Zinc, Iron Ore and Barites.”
At the moment, there is an ongoing review of the Nigerian Minerals and Mining Act (2007), with the aim of bringing legislation into conformity with global best practices, limiting the role of government to that of regulation, and creating the space for the private sector to maintain a more expansive presence in the sector.
According to the Minister, “the early evidence that our framework is on the right track is the inflow of notable investments.
“These include Thor Exploration Limited’s Segilola Gold Mine Project in Osun State, which has an initial production capacity of 80,000 ounces of gold annually, representing the first large-scale gold mine in Nigeria. In June last year, we commissioned the Dukia Gold & Precious Metals Refinery (DGPMR) Project.”
The company set out to be a foremost indigenous refiner and trader of gold and other precious metals, and its potential impact on the gold sector is nothing short of revolutionary.
By providing offtake opportunities through the establishment of Precious Metals Buying Centres, it serves as a spur for more small and medium scale mining investments, while its refinery symbolizes its focus on value addition in the gold and precious metals industry in Nigeria and West Africa.
A similarly remarkable investment is the integrated Iron Ore Mining and Processing Plant set up by the African Natural Resources and Mines Limited (ANRML) in Kaduna, which has an initial production capacity of 4.704 million tons of iron per annum and will scale up to 5.88 million tons per annum by 2025.
Furthermore, in line with the economic diversification plan of the government, the Ministry of Mines and Steel Development has issued a Request for Qualifications for any bidders with interest in receiving concessions to begin the production of bitumen in Nigeria. The country possesses about 42 billion tons of proven reserves of bitumen, estimated to be the sixth largest in the world.
These blocks are located close to key ports for export purposes and the import of mining equipment, with railways cutting across areas with bitumen deposits.
“Therefore, we seek for suitably qualified investors with pre-requisite experience, technological expertise and financial capacity for the development of bitumen resources in Nigeria,” Adegbite demanded.
He also made it known that, results on green fields and brown fields are in the process to be declared for investment opportunities.
His words: “We have 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 Center at the Nigerian Geological Survey Agency (NGSA).
“This would provide easy access to geoscience data for prospective investors on potential areas to target for exploration and mining within and outside Nigeria.”
Meanwhile, Adegeite has made it known that there are a lot of incentives enshrined in the Nigeria Minerals and Mining Act (2007), which include customs and import duties waiver for plants, machinery and equipment imported for mining operations; tax holidays of between three to five years as applicable; Free transferability of funds and permission to retain and use earned foreign exchange.
Others are capital allowances of up to 95% of qualifying capital expenditure; deductibility of environmental costs (money meant for environmental remediation will be tax free); and 100% ownership of mineral properties.
Similarly, part of the Ministry’s modest efforts towards achieving the desired aim of attracting investments is to reposition the Mining Cadastre Office to promote transparency in mineral title administration.
These processes have been streamlined to enable investors to apply online and obtain licenses and leases within and outside Nigeria. From the revenue drive perspective, the Nigerian Mining Sector has demonstrated a marked improvement despite the challenges of the pandemic.
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 procedures.
This, the Minister said, has helped to re-organize the mining sector, eliminate speculators, while leading to the revocation of about 1,566 mineral titles, as well as the activation of many dormant licenses, resulting in increased revenue inflow into the national treasury.