The tremendous potential and massive Mineral deposits in Nigeria are still undermined by a number of hurdles, which has a negative impact on the solid minerals industry. As such, the industry’s GDP contribution 0.63 percent is well below the sector’s capacity to contribute between 10 and 35 percent, just as seen in other Mining nations. Even with all 744 local government areas having mining operations and an abundance of rich minerals, the industry is still mainly unregulated. A substantial fraction of about 500,000 individuals directly involved in artisanal and small-scale mining (ASM) are involved in illegal operations, which is the major challenge.
Abiodun Baiyewu, Executive Director of Global Rights, stressed that despite the fact that Nigeria possesses over 40 minerals in commercial quantities, the industry still contributes less than 1% of the country’s GDP. According to reports, illicit mining operations cost Nigeria over $9 billion per year. Over 80 percent of mining operations within the country in 2020 were conducted illegally, depriving the government of important Tax and royalty income. Within societies, illegal operations threaten communities’ security, frequently sparks disputes over territory and resources and engage minors in dangerous settings.
Unregulated exploitation is depleting valuable resources.
Environmentally, it is responsible for more than 75% of Deforestation in mining areas, and over 30% of Nigeria’s land is affected by chemical contamination, which seriously degrades the ecosystem. Unregulated mineral exploitation is causing the depletion of valuable resources and eroding the potential of the industry. This practice is frequently encouraged by prominent individuals as well as political officials. Such operations result in tragedies like the 2010 Zamfara State tragedy, which killed over 400 children from lead poisoning, and the recent collapse of gold mines in Niger State, which buried over 50 people.
Cases of child labor are witnessed in the sector with over 2,000 children reportedly employed in Illegal Mining sites, especially in areas like Zamfara and Niger. The state governments’ efforts to safeguard the country’s natural riches were complicated by the federal government’s exclusive control over the issuance and Regulation of mining licenses. This contradiction makes it difficult to effectively regulate and take advantage of the industry. States do profit from a 13% derivative and other related taxes, but the difficulties facing the industry are made worse by a lack of robust local regulation.
924 dormant licenses were revoked to curb illegal activities.
Major challenges in the sector are corruption, poor infrastructure, lax enforcement of regulations and policies, and political influence. Proactive steps taken by the government to formalize the industry include recent initiative proposed to stimulate illegal miners to become members of artisanal cooperatives, with 152 cooperatives formed so far; 924 dormant mining licenses were revoked in an effort to curb illegal activities and promote proper utilization of licenses; and hundreds of pieces of equipment, including processing machinery, excavators and trucks seized by law enforcement in recent years.
Moreover, over 500 illegal miners were reportedly arrested and equipment valued at millions of Naira were seized between 2018 and 2022. In 2023 alone, more than 100 illicit miners were apprehended as a result of recent crackdowns in states including Osun, Zamfara, and Ekiti. In an effort to legitimize the industry and place illicit miners within the law, the government has granted over 1,000 permits to ASM. Following these actions, the industry has experienced a 20% rise in royalties and taxes collected. Government remains optimistic that continuous successful crackdowns and formalization of the industry could result in up to $2 billion Revenue annually.
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In spite of these endeavours, the Ministry of Mines and Steel Development is unable to effectively control the industry due to a lack of adequate resources. As per reports, a large number of state mining offices lack the staff and resources necessary to address the wide range of mining-related concerns. Thus, collaboration between all levels of government, increased funding for state offices, and holding companies responsible for ensuring sustainable operation methods are all necessary to address these issues. Also, improving regulatory structures and implementing efficient enforcement strategies are essential for realizing the industry’s full potential and reducing its negative effects on the environment and people.