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FOR INVESTMENT IN THE SOLID MINERALS SECTOR
is endowed with numerous mineral resources. Recent policy reforms have brought
the solid minerals sector to the fore. The emphasis is on encouraging massive
foreign investors’ participation in this sector.
PROFILE OF SOLID
MINERALS DEPOSITS IN NIGERIA
An estimated reserve of over 100 million
tones of talc has been obtained in Niger, Osun, Kogi, Kwara, Ogun, Taraba and
Kaduna States. There are only two medium size talc processing plants currently
operating in Nigeria and both in Niger State. The color of the Nigeria talc
varies from white through milky-white to gray. The talc industry represents one
of the most versatile sectors of the industrial minerals of the world. The
exploitation of the vast talc deposits in Nigeria would therefore satisfy not
only local demands but also that of the international markets as well.
There are over 3 billion tones of iron
ore found in Kogi, Enugu, Niger, Zamfara and Kaduna States. Iron is currently
being mined at Itakpe (Kogi State), which is more or less at the center of the
region of crystalline iron deposits. The large deposit of oolitic iron ores pf
Kogi and Enugu States are yet to be fully explored. Itakpe iron ore is being
beneficiated to 67% Fe. To feed Aladja and Ajaokuta Steel companies. Besides
there are three in-land rolling mills at Oshogbo, Jos and Katsina in addition to
some privately rolling mills in Lagos and Kano.
There are proven reserves of both
alluvial and primary deposits of gold with proven reserves in the shiest belt
covering the western half of Nigeria. At present exploitation of alluvial
deposits is being carried out mostly by artisan miners in a few places in the
country. A number of primary deposits, which are sufficiently big of large scale
mechanized mining, have been identified in the northwest and southwest parts of
the country. Private investors are invited to stake concessions on these primary
deposits. It is interesting to note that the primary deposits are of relatively
Production costs will easily be as low as about $50 per ounce.
The occurrence of Bitumen deposits in
Nigeria is indicated at about 42 billion tonnes almost as twice the amount of
existing reserves of crude petroleum. When fully developed, the industry will no
doubt meet local requirements for road construction and also become a foreign
exchange earner for the country.
The national demand for table salt,
caustic soda, chlorine, sodium bicarbonate, sodium hypochloric acid and hydrogen
peroxide exceeds one million tones. A colossal amount of money is experienced
annually to import these chemicals by various companies including tanneries,
food beverages, paper and pulp, bottling and other industries including the oil
companies. There are salt springs at Awe (Plateau State), Abakaliki (Enugu
State) and Uburu (Imo State), while rock salt is available in Benue State. A
total reserve of 1.5 billion tones has been indicated and further investigations
are now being carried out by government to ascertain the quantum of reserves.
Gypsum is an important input for the
production of cement. It is used for the production of Plaster of Paris (P.O.P)
and classroom chalk etc. a strategy for large-scale mining of gypsum used in the
cement industries is urgently required to sustain existing plants and meet
future expansion. Current cement production is put at 8 million tones per annum
while the national requirement is 9.6 million tones. About one billion tones of
gypsum deposits are spread over many states in Nigeria.
An estimated 10 million tones of
lead/zinc veins are spread over eight States in Nigeria. Joint venture partners
are encouraged to develop and exploit the various lead/zinc deposits all over
BENTONITE AND BARYTE
These are the main constituents of the
mud used in the drilling of all types of oil wells. The Nigeria baryte had
specific gravity of about 4.3. Over 7.5 million tonnes of baryte have been
identified in Taraba and Bauchi States. Large bentonite reserves of 700 million
tonnes are available in many states of the Federation ready for massive
development and exploitation.
Nigeria Coal is one of the most
bituminous in the world owing to its low sulphur and ash content and therefore
the most environment friendly. There are nearly 3.00 billion tonnes of indicated
reserves in 17 identified coalfields and over 600 million tonnes of proven
Gemstone mining has boomed in various
parts of Plateau, Kaduna and Bauchi States for years. Some of these gemstones
include Sapphire, Ruby, Aquamarine, Emerald, Tourmaline, Topaz, Garnet,
Amethyst, Zircon and Flourspar which are among the world’s best. Good
prospects exist in this area for viable investments.
An estimated reserve of 3 million tones
of good kaolinitic clays has been identified.
Large deposits of Tantalite are known to
occur in Nasarawa, Gombe and Kogi States as well as the Federal Capital
Territory. The deposits are both alluvial and primary in the numerous pegmatite
bodies that infest these areas. Grades of well over 50% Ta205 are found. Private
investors are invited to stake concessions for the development and exploitation
of tantalite in these areas.
Coal for Domestic Use:
Given the large deposits of brown coal in
the tertiary sediments east and west of River Niger; Nigeria can cash in on
foreign investors’ technology to produce coal pellets for industrial use, coal
briquettes for domestic use; that is, to replace firewood.
Strategies for Investment
to 5 years Tax Holiday.
capitalization of expenditure on exploration and surveys
of infrastructure such as roads and electricity to mining sites, and provision
of 100% foreign ownership of mining concerns.
HOW TO OBTAIN A MINING LEASE IN NIGERIA
are two options available to a company or an individual to enter into mining
industry in Nigeria.
the acquisition of an existing mining property from the original owner. Approval
must be obtained from the Ministry of Solid Minerals Development for such a
obtaining an application, either a Prospecting Right (PR), an Exclusive
Prospecting Licence (EPL), or a Special Exclusive Prospecting Licence (SEPL),
the application should state financial and technical capability qualifying the
applicant for entry into the mining sector.
Entry permit into
the mining sector:
of financial capability
of technical capability
of statutory existence of company Life
Right/Licence –Certificate of entry into mining
Licence 1 year renewals
prospecting Renewals exceeding 20.72) –Same as above Duration
(For areas up)
Depending on Reserves
Lease (Gives right to mine specified and area of 80 hectares) –Possession of a
Prospecting Right, Exclusive Prospecting Licence or Special Exclusive
of a plan of the prospecting done, a schedule of the mineral value found and a
statement of ore reserves.
of an environmental impact assessment and production plan. Not exceeding 21
years Renewal depending on remaining reserves.
mining lease for an area larger than 80 hectares - Same as above. Metallic
than 21 years.
than 21 years.
exceeding 70 years. Renewals at minister’s discretion, for not more than 21
into the mining industry - Statement of financial capability
Statement of technical competence
Proof of statutory existence of company.
of tax clearance
Payment of prescribed fee Life
Right (P.R.) – Certificate of entry into the mining industry.
Payment of prescribed fee 1 year (Renewable annually)
Exclusive Prospecting (E.P.L.) (For areas up to, but not exceeding 20.72km2) –
Certificate of entry into the mining industry
Prospecting Right (P.R.)
Payment of prescribed fee 1 year renewable for:
Deposits – maximum of 2 renewals: Bassalt:-
of 4 renewals Max. of 5 renewals
Exclusive Prospecting Licence (S.E.P.L.)
areas greater than 20. 72km2 & of difficult terrain Mining Lease (M.L)
Certificate of entry into Mining industry
Extant Prospecting Right (P.R.)
Payment of prescribed fee
Certificate of entry into mining industry
Prospecting Right (P.R.)
EPL or SEPL
plant of the area showing Ore reserve estimates.
Payment of prescribed fee. 1-5 Years
to 21 years, renewable depending on remaining on reserve
Mining Lease (SML)
areas greater than that of ML. With difficult terrain and large capital
of entry into mining industry.
Extant Prospecting Right (PR)
EPL or SEPL
Prospecting plan of the area showing on reserve estimates
Payment of prescribed fee. Up to 21 years renewable depending on the remaining
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