The Mining Industry in Nigeria, though not operating optimally due to the over-dependence on Crude oil, is definitely a haven of immense benefits to Investors and the country alike by serving as a huge source of foreign exchange as well as immense job creation for Nigeria’s manpower pool.
This article will be focusing on the Regulatory Framework governing the Mining Industry in Nigeria with a focus on :-
– The legislations and regulations guiding the Mining Industry in Nigeria.
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– Which level of government has actual Regulatory jurisdiction over Mineral rights and Mining in Nigeria.
– The Business licenses and permits available in Nigeria’s Mining Industry
What are the major laws and regulations governing Nigeria’s Mining Industry?
The Mining Industry in Nigeria is governed by the following laws :-
– The Constitution of the Federal Republic of Nigeria 1999(as amended).
– The Nigerian Minerals and Mining Act(NMMA) 2007 and the Nigerian Mineral and Mining Regulations 2011.
– The National Environmental Standards & Regulations Enforcement (Establishment) Act 2007.
– The Environmental Impact Assessment Act.
– The Mines and Quarries Act.
– The Explosives Act.
– The Foreign Exchange (Monitoring & Miscellaneous Provisions) Act .
Under the NMMA,the unauthorized exploration of minerals is prohibited.
Does the NMMA provide incentives for investors in Nigeria’s Mining Industry?
Yes it does. Some of these incentives include :-
– Tax relief periods of up to 5 years.
– The free access to the use of foreign exchange & the unhindered mobility of foreign exchange (meaning that Foreign exchange invested/earned by Mining Industry investors can be transferred easily).
– A Customs duty exemption.
Which tier of government/agency actually has apex regulatory control over the mining industry in Nigeria?
The Federal Government of Nigeria through the Ministry of Mines and Steel Development has apex jurisdiction and ownership rights(on behalf of the state) on all rights and resources in Nigeria by virtue of the Constitution which places mining under Item 39 of the exclusive legislative list. The rights of the Federal Government are transferrable.
This applies even though state governors have primary ownership of all lands in a state by virtue of the Land Use Act 1978.
What are the available Business licenses in the Nigerian Mining Industry by virtue of the NMMA?
Some of the business licenses granted in Nigeria’s Mining Industry include :-
- Exploration Licenses :- This is a license for the exploration of all minerals in a land area not exceeding 200sqkms for a 3-year duration and which is biannually renewable. This license also allows for bulk sampling, the exporting if samples and the selling of resources within stated limits.
- Reconnaissance Permits :- These are annually renewable non-exclusive permits for the purpose of entering any land in Nigeria in order to procure and remove surface samples in search of mineral resources.
- Small Scale Mining Leases :- These are mining leases for small scale mines covering areas not exceeding 3 sqkm and which are valid for 5 years (and renewable for another 5 years).
- Mining Leases :- These are exclusive permits lasting 25 years (& renewable for another 24 years) for areas under a 50sqkm limit.
- Mineral Buying Centre License (MBCL) :- This is a license for the trading & storage of mineral resources.
- Quarrying Leases :- These are 5-year permits for minerals like slate, china clay, gypsum, mica, sand, stone, gravel, and limestone regarding an area of land not exceeding 5 hectares.
- Export Permits :- These are permits for the export of mineral resources.
- Possess or Purchase Licenses :- These are licenses for the right to directly engage in the trade & export of mineral resources.
- Water Use Permits :- These are rights to procure & use water for licensed mining operation purposes and permits of this nature have validity period that last as long as the primary mining license they are attached to.