Market News

By Damilola Aina

The Federal Government through the Ministry of Solid Minerals Development has revoked 924 dormant mineral licences to enhance the mining sector’s transparency and efficiency.

This action was taken as the government identified licence racketeering as one of the main obstacles hindering the development of the sector.

The Minister of Solid Development Minerals, Dele Alake, disclosed this information at a press conference on Wednesday in Abuja.

The revoked licences include 528 exploration licences, 20 mining leases, 101 quarry licences and 273 small-scale mining licences.

Last November, the ministry revoked 1,633 mineral titles previously given to non-complying mining companies for failure to pay statutory charges, fees, and dues to the government.

The minister also promised to clean up the solid minerals sector for international competitiveness and urged all stakeholders who have acted wrongly in this sector to turn a new leaf.

But speaking at the briefing, Alake stated that the ministry opted to sanction the defaulters following their investigation into cases where individuals obtained licenses but instead of investing in site development, they participated in speculation and auctioned the licenses to the highest bidder.

He said, “I have explained that one of the obstacles to the development of the sector was licence racketeering. This is carried out by persons who obtain licences from cadastral units that they know have minerals of commercial value. Rather than mobilise men, money and materials to the site, they pollute the market by engaging in speculation and offering the licences to the highest bidder.

“There are many negative consequences. First, serious businessmen ready to move to the site are barred from making use of such sites because the concept of first come, first serve means that the place has been acquired. The country loses a lot of foreign direct investment because of this sabotage. Second, by creating a secondary, black market to pawn mineral licences, the unsuspecting and unwary investor is misled into believing that he can only obtain the licence by patronising the black market. This gives our country a bad image abroad and discourages investment.

“Thirdly, from feedback, the amount at which these licences are sold is so huge compared to their cost such that the funds which they could have used to initiate serious exploration or mining are spent on speculators.”

Dr. Alake underscored that the revocation followed due process, with adequate notice given to all concerned parties as stipulated in the official Gazette of the Federal Republic of Nigeria, No. 227, published on December 27, 2023.

He noted that of the 963 licensees notified of the impending revocation, only 39 took immediate action or provided convincing reasons for the dormancy of their licenses.

Dr Alake emphasised that the revocation aligns with the government’s commitment to enforcing the “Use it or Lose it” policy entrenched in mining guidelines.

He said, “In line with constitutional provisions, we ensured that adequate notice was given to the concerned parties through the official gazette of the Federal Republic of Nigeria no 227 which was published on December 27, 2023. This notice gave all concerned parties 30 days to regularise their status including clarifications on what caused the licence to be dormant.

“In view of the above, which shows our adherence with due process and fair consideration and in line with the standard policy of use it or lose it, I hereby revoke the 924 dormant licences with immediate effect. These include 528 exploration licences, 20 mining leases, 101 quarry licences and 273 small-scale mining licences.”

Speaking further, the minister announced an opportunity for affected licensees to make restitution, imposing fines for different categories of revoked licenses, stressing that this also applies to the 1,633 titles revoked last year for default in payment of annual service fees.

“For revoked Mining Licenses, a fine of N10m applies;  N7.5m for Small Scale Mining License while N5m for Exploration License. They will be required to make the payments within 30 days to qualify for consideration.”

“Investors across the globe are now free to apply for any of the affected Cadastral Units on the basis of “first come, first served. It is our belief that this decision will sanitise the licensing system by penalising those who have commercialised the opportunities offered by the sector into a bazaar. “

“A good lesson from this exercise is for investors to do their homework and be ready to flag off their projects as soon as they obtain licenses. Nigeria is open for business, and we shall encourage smart, serious, and adventurous investors to set up and provide jobs to our teeming youths, “Alake added.