Nigeria as a country is blessed with abundance of many resources which include stones, precious metals and minerals. Following the history of the Nigerian mining, In the early 70s, Nigeria was a major importer of coal, tin, and columbite, as such, Nigeria made a lot or revenue from the exportation process. However, this exportation process and other activities in the mining sector suffered premature death when crude oil was discovered.
Many Nigerians have argued and made a lot of presentations on the need for the country to come up with more sectors and multiply the revenue streams of the country. When democracy gained prominence in 1999, President Obasanjo worked tirelessly in putting in place a mechanism for diversification of the country’s revenue and as far as the mining sector is concerned, the Nigerian Minerals and Mining Act was inaugurated in 2007 to revive the mining sector in Nigeria.
It should be noted that though over 40 different minerals are scattered across Nigeria, some of them are not available in commercial quantities. The Ministry of Mines and Steel Development in its mining sector reformation strategy identified seven (7) minerals for strategic and priority development. The identified minerals are Iron ore, Coal, Lead/Zinc, Bitumen, Gold, Limestone and Barite.
Mining Sector’s Legal and Regulatory Framework.
The Nigerian Mineral and mining Act regulates the mining sector in Nigeria by vesting the regulation and control of ownership of Nigeria’s mineral resources. Also, the provision of Nigeria’s National Minerals and Metals Policy coupled with Minerals and Mining Regulations control the activities of the sector.
In terms of administration of the mining industry, Ministry of Mines and Steel Development oversees the industry’s administrative activities. The administration is carried out by Mines Inspectorate Department, Artisanal and Small Scale Mining Department, Mines, Environment and Compliance and Mining Cadastre office.
Mining Titles and Licenses.
Mining titles are granted to individuals, companies and co-operatives. Mining leases and exploration licenses can be granted through competitive bidding or individual request. Under competitive bidding, mineral locations are consolidated into blocks by the government and such blocks are offered for sale to both local and foreign investors who have financial and technical muscle to consummate mining activities. The bidding process under the competitive bidding include advertisement in media, due process of diligence by data room, receipt of Expression of Interest (EOI), preferred investor selection, communication of investors that are selected to National Assembly Committee on Solid Minerals and offer of mineral titles to selected investors.
As far as licensing and leasing is concerned, the types of licenses and leases that can be given include Renaissance Permits (RP), Exploration license, Quarry Lease, Small-Scale Mining lease, Mining lease and water use permit.
Mining business in Nigeria.
In Nigerian mining, Nigerians can start and carry on the business of mining through partnership, limited liability companies, unlimited liability companies and unincorporated joint venture while foreigners are only authorized to start and carry on mining business through limited liability companies as section 54 of Companies and Allied Matters Act (CAMA) states that foreign company cannot carry on any business in Nigeria. As such, the documents required for company’s incorporation in Nigeria are Memorandum of Association, Articles of Association, Share Capital statement, compliance with Companies and Allied Matters Act (CAMA) declaration, notice of situation of the company’s registered office and return of allotment of shares and particulars of First Directors of the company.
Challenges in the industry.
The challenges confronted by investors are much and as such, can not be over emphasized.
However, the major challenges that mining industry’s investors are facing are low project funding due to slow reform implementation by the government, appalling level of infrastructural development, inadequate security, illegal mining and community issues.