In a significant move to revitalize Nigeria’s mining sector, the Federal Government, under the Ministry of Solid Mineral Development, has unveiled a comprehensive strategy aimed at attracting substantial investment. One of the key components of this initiative is the provision of tax waivers on imported mining equipment. The announcement was made by the Minister of Solid Mineral Development, Dele Alake, during a crucial meeting with his Saudi Arabian counterpart, Bandar AlKhorayef, at the Future Minerals Forum held in Riyadh, Saudi Arabia.
The strategic importance of forging partnerships was underscored by Alake during the discussion. He emphasized Nigeria’s pivotal role in the global energy transition, owing to its abundant critical minerals. Alake stressed the necessity of investments in local value addition through solid mineral processing, advocating for the establishment of factories within Nigeria to boost economic growth and employment. Alake highlighted the need for comprehensive investments in various stages of the mining process, from exploration and exploitation to extraction, processing, and local value addition.
Government offered mineral investors tax break.
Recognizing the importance of international collaboration, he stated, “We realize that we must look at regions outside of Africa to collaborate, further consolidate, and enhance our capacity to explore and exploit the natural resources that we have.” Expressing a commitment to fostering partnerships with nations like Saudi Arabia, Alake articulated the importance of maximizing the utilization of Nigeria’s natural resources for economic and infrastructural development. The Nigerian delegation expressed their readiness to collaborate with their Saudi Arabian counterparts in refining and strategizing initiatives within a specified timeframe. Alake also disclosed plans for an enhanced security framework to safeguard mining areas effectively, ensuring a conducive environment for investors.
Meanwhile, in September 2023, the federal government had already made promises of enticing incentives to potential investors in Nigeria’s solid mineral sector. These incentives include 95 percent capital allowances of qualifying capital expenditure, tax holidays ranging from 3 to 5 years, and possible capitalization of expenditure on exploration and survey, among others. Minister Dele Alake announced these incentives at the sidelines of the United Nations General Assembly in New York. Despite lagging behind some African countries in mining activities, Nigeria boasts mineral deposits valued at over $700 billion, with the potential for further discovery. Alake asserted, “Our new president, President Bola Ahmed Tinubu, has made the solid mineral development sector vital in his administration, and we are committed to making it a key contributor to our national GDP.”
Minister highlights the mineral resources Nigeria is blessed with.
Addressing the global significance of minerals, Alake noted, “Nigeria is well positioned to play an important role in our new world. Our solid mineral sector is valued at over $700 billion, and we know there is more to be discovered.” He assured investors of the free transferability of foreign currency through the Central Bank of Nigeria for servicing foreign loans and remittances of foreign capital. Alake emphasized Nigeria’s unique position in the global energy discourse, having been a key oil exporter during the era of hydrocarbons. As the world transitions to alternative energy sources, Nigeria emerges as a crucial supplier of gas, a vital component in the energy transition.
Delving into specific mineral resources, Alake highlighted the presence of Lithium hosted pegmatite rocks in states such as Nasarawa, Kwara, Oyo, Abuja, and Kebbi, as well as Graphite in Kaduna. Platinum group minerals were identified in the middle belt, particularly in Benue and other regions. Nickel deposits are found in Kaduna and other locations, while Zinc, essential for offshore and onshore wind power generation, is abundant in states like Ebonyi, Nasarawa, and Plateau. The minister acknowledged that while Nigeria may not have a strong historic mining history compared to some neighboring countries, significant changes are underway. “Things are about to change,” Alake declared, hinting at a promising future for Nigeria as a mining destination on the African continent.
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Nigeria’s strategic approach to attract investment in the mining sector, coupled with promising incentives, underscores the nation’s commitment to harnessing its vast mineral potential. The collaborative efforts with international partners, particularly Saudi Arabia, signify a broader vision for the development of the solid mineral sector, contributing not only to economic growth but also to the global energy transition. As Nigeria positions itself as a key player in the evolving landscape of mineral resources, the future holds promising prospects for the nation’s economic and infrastructural development.
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