Introduction
Mining refers to the process of extracting mineral resources from the earth’s crust for economic use. It involves all activities undertaken to locate, explore, develop, and exploit solid minerals, whether metallic, industrial, or energy minerals. Nigeria is richly endowed with mineral resources that, if properly harnessed, could significantly contribute to economic diversification and development. Despite decades of underperformance in the solid minerals sector due to the over-reliance on oil, the Nigerian government has continued to reform mining regulations to attract local and foreign investments while ensuring sustainable use of mineral resources. This article examines the regulatory landscape for mining in Nigeria, covering key concepts, processes, and challenges.
Overview of Mining in Nigeria
Mining in Nigeria is governed primarily by the Nigerian Minerals and Mining Act, 2007 (NMMA) and its accompanying Regulations of 2011. The Act vests ownership and control of all minerals in the Federal Government of Nigeria, which holds them in trust for the people. Mining is regulated at the federal level through designated agencies, and operators must obtain appropriate licenses before exploring or exploiting mineral resources.
Nigeria is abundantly endowed with diverse mineral deposits scattered across its 36 states and the Federal Capital Territory. These include both metallic and industrial minerals, precious and semi-precious stones, and energy resources.
Classification of Mineral Resources
Some of the notable minerals found in Nigeria include:
a) Metallic minerals: Gold, tin, lead, zinc, iron ore, copper.
b) Industrial minerals: Limestone, gypsum, kaolin, barite, feldspar, bentonite.
c) Energy minerals: Coal, bitumen, lignite, uranium.
d) Gemstones: Sapphire, tourmaline, topaz, aquamarine.
These resources are geographically distributed, with certain states renowned for specific minerals for example, gold in Zamfara, limestone in Ogun and Edo, and coal in Enugu.
Regulatory Bodies and Their Functions
Several government agencies oversee mining activities in Nigeria:
- Ministry of Solid Minerals Development (MSMD): Responsible for policy formulation, regulation, and overall sector development.
- Mining Cadastre Office (MCO): Manages the administration of mining titles, ensuring transparency and compliance with cadastral procedures.
- Nigerian Geological Survey Agency (NGSA): Provides geoscientific data and surveys to guide exploration and exploitation.
- Environmental Protection Agencies (federal and state): Monitor environmental compliance and sustainable mining practices.
Types of Mining Licenses and Scope of Rights
Mining operations in Nigeria require operators to obtain one or more of the following mining titles, depending on the activity:
a) Reconnaissance Permit: Allows general geological mapping and surface exploration.
b) Exploration License: Permits systematic exploration and evaluation of mineral resources in a defined area.
c) Small Scale Mining Lease: Grants rights to carry out mining on a smaller, less capital-intensive scale, reserved for Nigerian citizens or companies incorporated in Nigeria.
d) Mining Lease: Allows large-scale, commercial mining operations.
e) Quarry Lease: Specifically for quarrying building materials like stone, sand, gravel.
f) Water Use Permit: Grants the holder of a mining title the right to use water for mining purposes within the licensed area. It is not a stand-alone title and can only be issued to an existing mining title holder
Each license or lease is granted for a fixed term and can be renewed subject to compliance with the law.
Transferability of Mineral Titles
Regulation 91 of the Nigerian Minerals and Mining Regulations, 2011 governs the procedure for transferring or assigning mineral titles. It applies to all mineral titles except reconnaissance permits, which are expressly non-transferable.
An application for transfer or assignment must be submitted to the Mining Cadastre Office in triplicate using Form 4 of Schedule 3 of the Regulations, accompanied by the proposed instrument of transfer and the terms of the assignment. The applicant is also required to pay the prescribed, non-refundable processing fee specified in Schedule 1. Upon submission and payment, the Mining Cadastre Office issues a receipt and records the application in the mineral title register.
The Minister of Mines and Steel Development may approve the application if satisfied that the transferee is qualified to hold the relevant mineral title, has submitted an attestation of acceptance, completed the required information, and paid the applicable transfer fee. Where the Minister denies the application, the applicant must be notified in writing within 15 days of the decision, and no later than 30 days from the date of application.
A party aggrieved by the Minister’s decision may appeal to the Federal High Court within 60 days of being notified. If the court rules in favour of the applicant, the Minister is required to grant the transfer within 14 days of being served with the judgment. Once approved, the transfer or assignment is recorded in the mineral title register, reflecting the date of the transaction. Any transfer or assignment undertaken in contravention of these provisions is void and of no effect.
Regulation 92 of the Nigerian Minerals and Mining Regulations, 2011 governs the transfer of mineral titles where the individual titleholder dies or is found to be mentally incapacitated.
In such circumstances, the holder’s exploration licence, mining lease, small-scale mining lease, quarry lease, or water use permit may, subject to this Regulation, be transferred or assigned by the Minister to a qualified heir or assignee. However, a reconnaissance permit is revoked upon the death or mental incapacity of the holder and cannot be transferred.
An application for the transfer must be submitted in triplicate to the Mining Cadastre Office, detailing the terms and conditions of the transfer and accompanied by the draft instrument of transfer. The heir or assignee must:
a) Be qualified to hold the type of mineral title.
b) Submit an application and acceptance of transfer to the Minister.
c) Provide a death certificate and testamentary or other succession documents (or a document evidencing mental incapacity).
d) Pay the prescribed mineral title transfer fee.
Where there is more than one heir and the mineral title cannot be divided, the heirs are required to form a corporation or association and apply for the transfer of the title to that entity within 90 days.
If the application is denied, the Minister must notify the applicant in writing within 30 days, and the aggrieved party may appeal to the Federal High Court within 60 days. Failure to comply with the procedural requirements within six months of death or incapacity may result in revocation of the mineral title.
Once the Minister approves the transfer, and the applicant accepts the terms and pays the applicable fee, the transfer is recorded in the mineral title register. Any transfer in violation of these provisions is invalid.
Conversion of Mineral Titles
The procedure for converting one type of mineral title to another is governed by Regulation 90 of the Nigerian Minerals and Mining Regulations, 2011. This provision allows a holder of a small-scale mining lease or a quarry lease to apply to the Mining Cadastre Office for conversion of the lease into a mining lease. To qualify, the applicant must satisfy all statutory and regulatory requirements applicable to a mining lease, including technical and financial capacity, and must follow the application procedure prescribed in the Regulations.
The term of the newly granted mining lease is determined as either the term requested in the application or the maximum term permitted by law for a mining lease, whichever is shorter, and is measured from the date of issuance by the Mining Cadastre Office.
Limitations on the Use of Mining Titles
Holders of mining titles are restricted in several ways:
a) Mining activities must not contravene zoning and land-use plans.
b) Operations must comply with environmental and safety standards.
c) Holders cannot mine outside the boundaries of the licensed area.
d) Certain areas are reserved for the federal government or strategic purposes and cannot be mined without special approval.
Failure to adhere to these limitations may result in suspension or revocation of licenses.
Small-Scale and Artisanal Mining
Small-scale and artisanal mining play a significant role in Nigeria’s mining sector, contributing to local employment and the supply of industrial minerals. It is a mining carried out by Nigerian citizens on a limited scale, using low-level technology or manual methods.
Importantly, small-scale mining leases are reserved exclusively for Nigerian citizens as provided for under section 49 of the Act, reflecting the government’s policy to promote indigenous participation in the sector.
Artisanal mining are often informal and subsistence-based and the government encourages the formalization of such activities into registered cooperatives to improve regulation, safety, and environmental compliance.
Foreign Participation in Mining
Foreign investors may participate in mining activities in Nigeria through companies incorporated under Nigerian law, and such companies are eligible to apply for all classes of mineral titles including Exploration Licences, Mining Leases, Quarry Leases, and Small-Scale Mining Leases (SSMLs).
Although the law does not restrict SSMLs to Nigerian-controlled companies, these leases are designed to promote local participation, and may be subject to increased regulatory scrutiny. It is therefore important for investors to align with localisation expectations, especially in the context of SSMLs.
Revocation of Mineral Titles
The power to revoke a mineral title is provided under Regulation 97 of the Nigerian Minerals and Mining Regulations, 2011, which prescribes the procedure to be followed when a mineral title is revoked in accordance with the Act.
The Minister of Mines and Steel Development may revoke a mineral title where grounds for revocation exist under the Act. Except where the revocation is based on a voluntary surrender under Regulation 96, the Mining Cadastre Office is required to give prior written notice to the titleholder, detailing the grounds for revocation and granting the holder an opportunity to remedy the breach or remove the grounds within 30 days.
If the holder fails to do so within the stipulated period, the Mining Cadastre Office may request the Minister’s permission to revoke the title. Upon receipt of the Minister’s written approval, the Mining Cadastre Office must revoke the title within seven days, record the revocation in the appropriate register and cadastral maps, and notify the former holder in writing within a further seven days.
A party aggrieved by the Minister’s decision may appeal to the Federal High Court within 30 days of receiving notification of the revocation. Following revocation, the Mining Cadastre Office is also empowered to require the former titleholder to deliver, within 30 days, all records, plans, maps, and any other documents relating to the mineral title as specified in a written notice.
Challenges Facing the Mining Sector
Despite its potential, the mining sector in Nigeria faces significant challenges:
a) Inadequate infrastructure (roads, power) to support operations.
b) Insecurity in mineral-rich regions.
c) Poor funding and limited access to credit for indigenous miners.
d) Illegal mining and smuggling of minerals.
e) Bureaucratic bottlenecks and slow licensing processes.
f) Environmental degradation and community conflicts.
Conclusion
Mining regulations in Nigeria have evolved to create an enabling environment for responsible exploration and exploitation of the country’s rich mineral resources. By understanding the regulatory framework, operators both local and foreign can navigate the sector effectively while contributing to Nigeria’s economic growth. As reforms continue, stakeholders must work collaboratively to address existing challenges and unlock the full potential of the mining industry.