Nigeria has announced that it will only grant new mining licenses to companies that present detailed plans for processing minerals locally. This move marks a departure from the country’s long-standing practice of exporting raw materials, as African governments increasingly seek to extract more value from their solid mineral deposits.
According to a government spokesperson, Segun Tomori, the new guidelines will incentivize investors by offering tax waivers for importing mining equipment, facilitating the acquisition of electricity generation licenses, allowing full repatriation of profits, and enhancing security measures. In return, companies will be required to submit comprehensive proposals outlining their plans for setting up processing plants and adding value to the Nigerian economy.
Dele Alake, Nigeria’s Minister of Solid Minerals Development, emphasized the importance of value addition as a condition for obtaining licenses, highlighting its potential to create jobs and support local communities. Alake, who chairs an African mining strategy group comprising mining ministers from several countries, is advocating for a continent-wide effort to maximize local benefits from mineral exploration.
Nigeria, known as Africa’s top energy producer, has historically struggled to extract value from its abundant mineral resources due to inadequate incentives and neglect. The underdeveloped mining sector currently contributes less than 1% to the country’s gross domestic product.
Last year, Nigeria primarily exported tin ore and concentrates valued at approximately 137.59 billion naira ($108.34 million), mainly to China and Malaysia. To stimulate investment, the government plans to issue more licenses and has established a state-owned solid minerals corporation offering investors a 75% stake. Additionally, a special security unit has been tasked with combating illegal miners, while efforts are underway to regulate artisanal miners by organizing them into cooperatives.
Foreign mining companies operating in Nigeria include Canada-based Thor Explorations, engaged in gold exploration; Chinese-owned Xiang Hui International Mining, which partnered with a local company for gold processing; and Indian-owned African Natural Resources and Mines, currently constructing a $600 million iron ore processing plant in northern Nigeria.
While the finalization and implementation timeline for the new guidelines remain undisclosed, the government’s commitment to promoting local mineral processing signifies a proactive step towards unlocking the full economic potential of Nigeria’s mineral wealth.
