Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Nigeria has revoked 924 dormant mining titles immediately and invites investors to freely apply for the affected licences which will be offered on a “first come, first served” basis, its minister of mines said on Wednesday.
The affected titles include 528 exploration licences, 20 mining leases, 101 quarry licences, and 273 small-scale mining licences, Mines Minister Dele Alake said in a statement.
In November, more than 1,600 mining titles were revoked for non-payment of statutory fees as part of sweeping reforms in the sector.
Alake said the action was taken to curb “licence racketeering” where companies or individuals secure titles that hold minerals of commercial value and then offer the licences to the highest bidder.
“By creating a secondary, black market to pawn mineral licences, the unsuspecting and unwary investor is misled into believing that he can only obtain licence by patronizing the black market. This discourages investment,” Alake said.
“It is our belief that this decision will sanitize the licensing system by penalizing those who have commercialized the opportunities offered by the sector into a bazaar, he added.
Nigeria is seeking to woo investors to a mining industry that has long been underdeveloped, offering incentives such as tax waivers and full repatriation of profits to investors.
In the past, Nigeria has struggled to extract value from its vast mineral resources due to neglect and lack of investments.
Africa’s top oil producer, which is also rich in lithium, gold and limestone, will grant mining licences to only companies that process their minerals locally after toughening licensing rules for foreign companies last year.
(By Camillus Eboh; Editing by Elisha Bala-Gbogbo and Jonathan Oatis)
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