Mining is a significant sector in Nigeria's economy, contributing to GDP growth, job creation, and industrialization. However, you have to obtain a mining license in Nigeria to be able to carry out operations unhindered. In the 1960s to early 1970s, Nigeria was a major exporter of natural resources like tin, columbite and coal. However, activities in this sector nose-dived considerably by the mid-1970s due to several political and economic factors, especially following the discovery of crude oil in Oloibiri, Bayelsa State.
In the first quarter of 2024, crude oil and natural gas had the largest contribution to the mining and quarrying sector, covering about 6% of the GDP. it's no surprise given the country's reliance on crude as a major export commodity. However, there are many other natural resources that are getting mined in Nigeria daily.
This guide provides a complete overview of the types of mining licenses, key steps for application, required documentation, and key insights into obtaining a mining license in Nigeria.
Types of Mining Licenses
1. Exploration License (EL)
- Purpose: Allows the holder to explore for minerals over a specified area.
- Area Limit: Maximum of 22 square kilometers.
- Validity: Renewable every one or two years.
- Processing Fee: Approximately N600,000.
2. Mining Lease (ML)
- Purpose: Grants exclusive rights to extract minerals within a specified area.
- Area Limit: Up to 50 square kilometers.
- Validity: 25 years, subject to renewal.
- Processing Fee: N3,000,000.
3. Small Scale Mining Lease (SSML)
- Purpose: Designed for small-scale mining operations.
- Area Limit: Maximum of 3 square kilometers.
- Validity: 5 years, renewable for an additional 5 years.
- Processing Fee: N300,000.
4. Quarry Lease (QL)
- Purpose: Specifically for quarrying activities.
- Processing Fee: N600,000.
5. Reconnaissance Permit
- Purpose: Allows initial exploration without detailed studies.
- Processing Fee: N300,000.
6. Water Use Permit (WUP)
- Required for using water resources in mining operations.
- Processing Fee: N300,000.
7. Possess or Purchase License
- For trading in mineral resources without extraction.
8. Mineral Buying Centre License
- For establishments purchasing minerals from miners.
9. Mineral Export Permit
- Required for exporting mined minerals.
Authorities Responsible for Issung Mining Licenses in Nigeria
In Nigeria, the authorities responsible for issuing mining licenses are primarily the Nigeria Mining Cadastre Office (NMCO) and the Federal Ministry of Mines and Steel Development (MMSD).
Key Authorities
1. Nigeria Mining Cadastre Office (NMCO)
- The NMCO is the main regulatory body overseeing the issuance of mineral titles and licenses. It manages applications for various mining licenses, including exploration licenses and mining leases, ensuring compliance with relevant laws and regulations. The NMCO operates under a "first come, first served" principle and emphasizes transparency in its processes.
2. Federal Ministry of Mines and Steel Development (MMSD)
- The MMSD plays a crucial role in the overall governance of the mining sector. It coordinates the activities of the NMCO and is involved in policy formulation, regulation, and oversight of mining operations in Nigeria. The MMSD also handles applications for mining leases and ensures that they comply with national laws, such as the Nigerian Minerals and Mining Act of 2007.
Additional Regulatory Framework
- The Nigerian Minerals and Mining Act 2007 and associated regulations provide the legal foundation for mining activities in Nigeria. These laws outline the procedures for obtaining licenses and the responsibilities of both the government and mining operators
Requirements for Obtaining Licenses
General Requirements
- Completed application forms.
- Attestation of non-conviction of criminal offenses.
- Certificate of incorporation (for corporate entities) or National ID/Driver's License (for individuals).
- Evidence of financial capability and technical competence.
- Consent letter from landowners/occupiers.
- Current tax clearance certificate.
- Specific documents based on license type (e.g., pre-feasibility study for leases).
Specific Requirements
- For an Exploration License:
- Minimum work program detailing exploration activities.
- For a Mining Lease:
- Proof of economic reserves and feasibility studies demonstrating viability.
Application Process
- Submit an application to the NMCO through its electronic Mining Cadastre System (eMC+).
- Pay the applicable processing fees based on the license type.
- Await processing, which typically takes 30 working days for permits and licenses, and up to 45 days for leases.
P.S. You should work with a reputable law firm to accelerate the delivery of your mining license; and also to proffer valuable legal mining advice.
Conclusion
To engage in mining activities legally, individuals or companies must pass through these authorities to obtain the necessary licenses while adhering to established regulations.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
