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For decades, Nigeria's economy has been reliant almost exclusively on proceeds from it crude oil production. Yet it is geologically endowed with over 44 mineral types spread across over 500 locations within its federation. These include critical minerals such as lithium, cobalt, nickel, and rare earth elements, the very building blocks of the global energy transition1 . Against this backdrop, the Federal Government has introduced the Nigerian Solid Minerals Company (NSMC)2 , a sovereign investment vehicle designed to catalyse private capital and reposition mining as a pillar of Nigeria's economic diversification.
The introduction of the NSMC raises the question as to whether it is the long-awaited gateway into Nigeria's mining renaissance or simply another state-owned experiment destined for stagnation?
THE PROMISE OF NSMC
The Nigerian Solid Minerals Corporation (NSMC) is being positioned as a hybrid sovereign–private venture designed to transform Nigeria's mining sector into a globally competitive one. Its proposed shareholding structure allocates 50% to private investors, 25% to the Federal Government, and 25% to Nigerian citizens through a public offer. The goal is to boost Nigeria's credit and investment rating in the solid minerals sector, diversify government revenue, and reduce dependence on oil. 3
Unlike past approaches, NSMC will be run mainly by private operators to ensure operational independence and shield it from political interference. Its leadership is anchored by Chief Executive Officer, reflecting a deliberate tilt towards professional, non-political management. The company is not designed as a one-off Special Purpose Vehicle but as a national mining vehicle similar to how the NNPC Limited operates in oil sector able to enter into joint ventures on behalf of the country, negotiate with international partners, and directly participate in the value chain. By combining sovereign backing, privatesector efficiency, and citizen participation, NSMC aims to position Nigeria as a serious contender in the global critical minerals economy.4
THE PROBLEM WITH THE 50:25:25 SHARING FORMULA
The current NSMC ownership structure is as follows5 :
- 50% Private Sector – Majority control given to investors, possibly foreign.
- 25% Federal Government – Limited oversight power in strategic decisions
- 25% Nigerian Public – No clear mechanism for distribution; could favour elites.
This ownership structure has attracted significant criticism. By granting majority control to private investors, Nigeria risks surrendering substantial influence over strategic decision-making, revenue distribution, and national development objectives. Critics have made reference to Debswana Diamond Company Limited (Debswana), a joint venture between the Government of Botswana and De Beers Group, one of the most successful public–private mining partnerships in the world, where the government and De Beers each hold a 50% stake, an arrangement that allows equal profit-sharing and ensures mineral revenues are reinvested in infrastructure, education, and healthcare. Although, the Debswana model is often celebrated for its transparency and equitable revenue allocation, it also illustrates certain vulnerabilities. The same structure closely links government finances to the company's performance, making Botswana highly susceptible to fluctuations in global diamond prices and exposes the inherent risk of fiscal dependence on a single corporate partnership6 .
A private-majority model risks creating a profitdriven NSMC in which revenues could be repatriated abroad rather than reinvested locally. While the federal government's 25% stake does not limit its statutory ability to enforce environmental standards through regulatory agencies, it does restrict its influence over the company's internal policies, investment priorities, and long-term developmental goals. Likewise, the mechanism for the subscription by the Nigerian public to 25% of NSMC's shares remains unclear: will it truly be through broadbased public offerings accessible to everyday citizens, or will it be limited?
THE COUNTERPOINT: WHY PRIVATE PARTICIPATION MAY BE WHAT NSMC NEEDS
Private participation, whether foreign or Nigerian, may provide the very expertise and commercial discipline that NSMC requires to succeed. A government-dominated model risks inefficiency, bureaucracy, and politicization, as Nigeria's past experience with state-owned enterprises has shown. By contrast, privatemajority involvement could ensure that NSMC is run as a business, with performance targets, financial accountability, and global best practice in mine development and operations. Similar hybrid or private-majority models have proven effective elsewhere; for instance, AngloGold Ashanti, a publicly listed company with minority state participation through Ghana's retained interest, has sustained large-scale gold production while contributing to public revenue and community development7 .
Importantly, "private" does not mean "foreign only." Nigerian entrepreneurs, institutional investors, and citizens (through the 25% public offering) all have the opportunity to hold significant stakes. In fact, when the Federal Government's 25% is combined with the public offering of 25%, domestic ownership could potentially exceed 50%, depending on how the private offering is made. This creates a pathway for Nigerians to retain majority influence while still attracting foreign capital, technology, and know-how.
In this light, the 50:25:25 formula, while imperfect, could serve as a pragmatic compromise: foreign investors bring in capital and global standards, while Nigerian stakeholders collectively maintain the ability to shape strategic direction and ensure that national interests are not subordinated to purely commercial ones.
INVESTOR CONSIDERATIONS: VIABILITY OR MIRAGE?
NSMC's promise is undeniable, but investors will weigh its structure against Nigeria's history of underperforming state ventures. The key question remains one of governance: governance: will the NSMC operate as a disciplined commercial entity or will it succumb to the inefficiencies and political interferences that have plagued similar ventures in the past?
The ownership structure lies at the heart of this debate. The proposed ownership structure lies at the heart of this debate. While some argue that ceding 50% control to private investors may weaken state oversight, others contend that such private-sector dominance could inject the professionalism, expertise, and efficiency long missing from Nigeria's mining landscape. Ultimately, the outcome will depend on how transparently the shares are allocated, how robust the governance framework is, and whether Nigerian investors are genuinely empowered to participate, ensuring that public and federal stakes together safeguard national interests.
Beyond governance, the NSMC's success will also hinge on regulatory stability and infrastructure readiness. Although mining is constitutionally under federal control, persistent tensions over resource ownership between the federal and state governments continues to be a recurring issue which makes clarity essential to prevent a fragmented operating environment. Nigeria's weak infrastructure particularly its rail networks, power supply, and port systems remain a significant bottleneck. However, increased private-sector participation through the NSMC could accelerate commercially driven solutions.
Comparative models such as Botswana's Debswana and Chile's Codelco demonstrate that state-backed mining enterprises can succeed when investor confidence and the reinvestment of resource revenues are central priorities. Botswana's 50:50 joint venture with De Beers has become a benchmark for balanced resource governance as government participation ensures that mining proceeds are channeled into infrastructure and social programmes while private-sector involvement drives efficiency and profitability8 . Similarly, Chile's National Copper Corporation (Codelco) illustrates that full state ownership can achieve outstanding results when the company is shielded from political interference and operates on sound commercial principles. Entirely owned by the Chilean government, Codelco stands among the world's largest copper producers and is governed by a professional, independent management structure that reinvests profits into national development and public welfare initiative. 9
For Nigeria, NSMC's success will depend less on the precise equity split and more on the strength of institutional safeguards such as transparent contracts, professional management, and the credible enforcement of both investor rights and national obligations. NSMC's tilt toward private leadership could either fuel unchecked profit repatriation or, if managed well, forge a hybrid model combining private efficiency with collective national influence
OPPORTUNITIES FOR THE BOLD
For investors willing to look beyond Nigeria's structural challenges, the NSMC presents a rare first-mover opportunity in a market poised for transformation. Rising global demand for lithium, nickel, and rare earth minerals positions Nigeria as a potential supplier to fast-growing battery and energy storage markets. NSMC's three planned investment windows spanning exploration, development, and processing, offer structured entry points across the mining lifecycle, reducing exposure and enabling investors to participate according to their risk appetite.
Equally important, the ownership structure mix could blend private-sector efficiency with national oversight. This balance dovetails with Nigeria's broader "Decade of Gas" and critical minerals strategy, embedding mining into the global transition economy. For the bold, NSMC is not just a mining play but a chance to ride Nigeria's pivot toward low-carbon growth.
RISKS AND RED FLAGS
While the promise of NSMC is real, the risks are equally stark. The proposed 50:25:25 ownership structure has drawn criticism over the possibility that majority private control may marginalize national priorities, particularly if the process of share allocation is opaque. Such an arrangement could heighten the risks of elite capture, capital outflow, and limited reinvestment in Nigeria's domestic development.
More so, Nigeria continues to lose billions annually to illegal mining activities, undermining formal sector competitiveness and government revenues. NSMC's success will hinge on whether it can curb this parallel market through effective enforcement and community engagement. The country has never lacked ambitious frameworks, what has been lacking is consistent institutional discipline and delivery. For investors, real confidence will come only from transparent revenue-sharing models, transparent dispute resolution mechanisms, and enforceable contracts that ensure promises translate into performance.
A CAUTIOUS CONCLUSION
NSMC carries within it the seeds of transformation. If executed with discipline, it could become the long-awaited catalyst to reposition Nigeria's mining sector, unlock sustainable revenues, and deliver competitive returns for investors. But without ironclad governance, enforceable investor protections, and transparent accountability, it risks joining Nigeria's long catalogue of underperforming state-backed experiments.
For investors, the path forward is one of cautious optimism: engage early, but only through structures that guarantee enforceable rights, equitable returns, and a clear alignment of interests between the state, citizens, and private capital. Nigeria's mineral wealth is vast, and the opportunity is undeniably real.
The decisive question remains: will NSMC emerge as a genuine partner in unlocking this value or prove to be yet another mirage by the government in the shifting sands of Nigeria's policy landscape?
Footnotes
1 Critical Minerals, https://www.icmm.com/en-gb/miningmetals/critical-minerals
2 NSMC, https://nsmc.com.ng/
3 Nigeria establishes solid minerals company to attract foreign direct investment, https://tribuneonlineng.com/nigeriaestablishes-solid-minerals-company-to-attract-foreign-directinvestment/
4 About NSMC, https://nsmc.com.ng/about/
5 ibid
6 Botswana's Debswana curbs diamond production as weak demand persists, https://www.reuters.com/world/africa/botswanas-debswanacurbs-diamond-production-weak-demand-persists 2025-06-06/ THE COUNTERPOINT: WHY PRIVATE PARTICIPATION MAY BE WHAT NSMC NEEDS Private participation, whether foreign or Nigerian, may provide the very expertise and commercial discipline that NSMC requires to succeed. A government-dominated model risks inefficiency, bureaucracy, and politicization, as Nigeria's past experience with state-owned enterprises has shown. By contrast, privatemajority involvement could ensure that NSMC is run as a business, with performance targets, financial accountability, and global best practice in mine development and operations. Similar hybrid or private-majority models have proven effective elsewhere; for instance, AngloGold Ashanti, a publicly listed company with minority state participation through Ghana's retained interest, has sustained large-scale gold production while contributing to public revenue and community development
7. Importantly, "private" does not mean "foreign only." Nigerian entrepreneurs, institutional investors, and citizens (through the 25% public offering) all have the opportunity to hold significant stakes. In fact, when the Federal Government's 25% is combined with the public offering of 25%, domestic ownership could potentially exceed 50%, depending on how the private offering is made. This creates a pathway for Nigerians to retain majority influence while still attracting foreign capital, technology, and know-how. In this light, the 50:25:25 formula, while imperfect, could serve as a pragmatic compromise: foreign investors bring in capital and global standards, while Nigerian stakeholders collectively maintain the ability to shape strategic 7 Stakeholders Participation and Sustainability of Corporate Social Responsibility Programmes in Ghana: A Study of AngloGold Ashanti Mine in Obuasi, https://www.researchgate.net/publication/295242032
8 ibid
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