Finance & EconomyNews

FG Revokes 1,633 Mining Licenses

A report from a national newspaper says the Federal Government has revoked the operating license of 1,633 mining title holders, for failure to pay annual service due to the government. The Minister of solid minerals Dele Alake noted that the move was aimed at sanitising the sector and freeing up space for new investors who can meet their obligations. According to him, holders of exploration titles are expected to pay N1,500 per cadastral unit not exceeding 200 units, while those holding titles covering more than 200 units pay N2,000 per unit. In accordance with the Nigerian Minerals and Mining Act 2007, the mining cadastre office published notices of revocation for defaulting on 10 October 2023 but only 580 titleholders of the 2,213 notified, paid up their debts after the 30 days mandatory period, which ended on 10 November 2023. 

Despite the abundance of mineral resources in Nigeria, the solid minerals sector has significantly underperformed with a meagre contribution of less than 1% to the GDP over the years (0.82% in 2022 vs 0.67% in 2021 vs 0.59% in 2020). However, the figure is solely from formal channels as the artisanal and small-scale mining activities that constitute over 80% of the current mining activities in the country are unaccounted for. Also, illegal mining activities have continued unabated, with huge monies lost. The government launched the Presidential Artisanal Gold Mining Development Initiative (PAGMI) in 2019 to integrate artisanal and small-scale gold mining activities in the country and boost accretion to foreign reserves. However, the current reality seems far from the intended plans. 

Amidst the growing clamour for diversification of the country’s revenue away from oil, several issues affecting the entire value chain remain the bane of the sector. These include, but are not limited to, large funding requirements; insecurity in major regions known to have abundance of mineral resources; decrepit infrastructure; limited technical know-how; and unreliable information on the quantity & quality of mineral deposits in the country due to limited geoscience data and information. These factors have led to low investments in the sector as many investors remain concerned about its bankability. 

Nigeria has a large iron ore reserve. Reserves of some minerals, such as lead, baryte, coal and bitumen, are specific to only Nigeria in Sub-Saharan Africa (SSA). These reserves represent an untapped opportunity for the nation to enrich its mining portfolio and effectively diversify its earnings away from crude oil. While Nigeria has more gold reserves than Burkina Faso and the DRC, gold production in the country has been the lowest in SSA, underscoring the dearth of large-scale production facilities in the country. Nevertheless, the grade quality of gold found in Nigeria is one of the highest in SSA presenting a substantial growth opportunity, as it continues to remain in demand from the jewelry sector and commands the highest price worldwide.

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