HomeNewsNigeria Revokes 924 Dormant Licenses to Revitalize Mining Sector

Nigeria Revokes 924 Dormant Licenses to Revitalize Mining Sector

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The Nigerian government has taken a decisive step in revitalizing its mining sector by revoking 924 dormant licenses across various categories, such as exploration, mining, small-scale mining, and quarrying. This follows a similar move made six months ago, where 1,663 licenses were revoked due to non-compliance with statutory financial obligations. This series of revocations highlights a broader effort by the federal government to improve operations within the sector by cleaning up and streamlining the process.

The recent announcement was made by Dr. Dele Alake, the Minister of Solid Minerals Development, during a press briefing in Abuja. He elaborated that the revoked licenses comprised 528 exploration licenses, 20 mining licenses, 101 quarry licenses, and 273 Small Scale Mining Licenses (SSML). Dr. Alake emphasized that the decision was rooted in the government’s commitment to enforcing the “Use it or Lose it” policy, as dictated by national mining guidelines, aiming to deter speculative holding of mining rights and encourage genuine investment and development.

To ensure procedural fairness, the mining Cadastral Office had previously notified the holders of these licenses through the official Gazette of the Federal Republic of Nigeria, published on December 27, 2023. This notification provided license holders a 30-day window to regularize their status, which included clarifying the reasons behind the dormancy of their licenses and settling outstanding fines. Despite this opportunity, a substantial number still failed to comply, prompting the government’s firm response.

Dr. Alake detailed the financial penalties associated with the revocations: mining licenses now carry a fine of ₦10 million, small-scale mining licenses ₦7.5 million, and exploration licenses ₦5 million. These fines must be paid within 30 days for the affected parties to be reconsidered for future licensing. This structure not only penalizes non-compliance but also opens up avenues for redemption and re-engagement with the sector under clearer and stricter operational expectations.

In his address, Dr. Alake also highlighted the broader implications of license hoarding, which has stymied the sector’s growth and deterred serious investors. By monopolizing promising sites without developing them, dormant license holders have created a bottleneck that has both limited access for genuine investors and fostered a shadow market where licenses are traded at inflated prices. This black market for mining licenses not only diverts potential investment from legitimate exploration and mining activities but also tarnishes Nigeria’s reputation as a viable destination for foreign direct investment in the mining sector.

The minister pointed out that these practices had led to significant losses in potential foreign direct investments and obstructed the inflow of capital that is crucial for mining exploration and development. The revocation of these licenses is therefore seen as a corrective measure to restore integrity and transparency to the licensing process. It is expected to re-attract serious investors who are ready to contribute positively to the sector.

Moving forward, the Cadastral Office will make the affected cadastral units available on a “first come, first served” basis, aiming to quickly reallocate the resources to capable and interested parties. This approach is intended to maximize the productive use of these resources and minimize the opportunity for speculative holding.

The ongoing clean-up of the mining sector by the Nigerian government represents a significant shift towards more stringent regulatory enforcement and is part of a broader strategy to harness the full potential of Nigeria’s rich mineral resources. By eliminating inefficiencies and unethical practices, the government aims to foster a more competitive and productive mining sector that can contribute more significantly to the national economy.

This policy shift also aligns with broader economic reforms aimed at diversifying Nigeria’s economy away from its traditional reliance on oil. The mining sector, with its vast untapped potential, is seen as a critical component of this diversification strategy. The government’s actions to sanitize and stimulate this sector are thus a key element of Nigeria’s broader economic strategy to secure sustainable growth and development.

While the revocation of nearly a thousand mining licenses may seem stringent, it underscores a resolute commitment by the Nigerian government to reinvigorate the mining sector by enforcing regulations, encouraging real investment, and penalizing non-compliance. This is expected to lead to a more robust, dynamic, and transparent mining industry in Nigeria.

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