Nigeria Mandates In-Country Mineral Processing for New Mining Licenses

In a significant policy pivot aimed at bolstering domestic value addition and attracting investment, the Nigerian government has declared a new directive that mandates mining companies to commit to local processing of minerals to be eligible for mining licenses. This approach marks a departure from the nation’s traditional strategy of exporting unprocessed raw materials. According to Segun Tomori, a spokesperson for the Nigerian Ministry of Solid Minerals Development, the forthcoming regulations necessitate applicants to demonstrate a comprehensive plan for the local processing of extracted minerals. This move positions Nigeria alongside other African nations, such as Burkina Faso, Mali and Ghana, that have initiated similar strategies to leverage more substantial economic benefits from their natural resources. To entice investments into the mineral processing industry, Nigeria is set to introduce incentives such as tax waivers for mining equipment imports and provisions for the full repatriation of profits, alongside measures to enhance security within the sector. The policy unfolds within a broader context where Nigeria, despite being Africa’s premier energy producer, has faced challenges in maximizing the value derived from its extensive mineral wealth. This scenario is attributed to insufficient incentives and historical oversight. A notable aspect of the new policy framework includes the regulation of artisanal mining, a dominant activity within Nigeria’s mining landscape, by organizing these miners into cooperatives. Dele Alake, Nigeria’s Minister of Solid Minerals Development, is at the forefront of advocating for a pan-African strategy to optimize local benefits from mineral resources. Alake, who also presides over the African Mining Strategy Group—comprising mining ministers from several African countries—aims to galvanize a continent-wide effort toward enhanced local processing of minerals. In 2023, Nigeria’s export portfolio predominantly featured tin ore and concentrates, with a significant proportion destined for China and Malaysia, bringing in revenues of approximately $109 million. This initiative by the Nigerian government underscores a strategic shift towards enhancing local industry, fostering economic diversification, and securing greater returns from the country’s mineral assets. In 2022, Nigerian and Swiss firms signed a pact to develop precious metals and artisanal gold mining value chain. Underscoring Nigeria’s in-country mineral processing direction is a quote from an Accra Mining Network OP-ED by Raymond Kudzawu-D’Pherdd, “Nigeria may be a new entrant in the mining and mineral resource space, but her determination and innovation are deliciously promising“… and “if Nigeria continues with her excellent efforts in her mineral resource management carefully, perhaps Ghana and South Africa, could learn a few things from her, or she will overtake them“.

Sources: The North Africa Post,  AMN News,  AMHOF Blog