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FG increases rates, charges for all activities in the mining sector

The Federal Government has raised the rates and charges for all activities in the mining sector.

This comes as it expressed concerns about non-remittance by some operators, stating that while mining operators are generating substantial profits, they have failed to remit these earnings to the Federal Government.

Dr. Dele Alake, the Minister of Solid Minerals Development, disclosed this during a press briefing on Thursday in Abuja.

The minister stated that this development is due to the introduction of qualitative measures recently implemented. He added that it would enhance service levels, increase transaction traffic, and improve infrastructure development.

He said, “Today, we are taking a major step in the efforts to implement the seven-point agenda.”

“This is to position the sector for economic consolidation by announcing a new regime of rates and charges for various services of the department and agencies of the ministry.”

“For instance, we supervised the successful implementation and conclusion of the mineral sector support for economic diversification mind diver project.”

Alake stated that the new system would encourage greater interest and boost participation in the sector, thereby giving stakeholders confidence to invest. He mentioned that the Nigerian Geological Survey Agency (NGSA) had acquired integrated base data that is accessible to the public.

New rates for licencing

Alake noted that there are approximately 268 items in the rates regime, making it difficult to mention each one individually.

He said, “The stakeholders have been enjoying the mining sector; it is, therefore, equitable that those who invest in the mining sector and make profits from it should be on the front lines of the government’s efforts to recoup rather than pass it to poor Nigerians.”

“The cost to obtain an Exploration Licence (EL) is N600,000 for the first 100 cadastral units.’’

“The aim is to discourage speculation and address the paucity of funds, limiting the Federal Government’s capacity to improve ease of doing business in the sector.”

The new rate, which affects 268 items in the industry, includes an annual service fee of N31,500 for the first time.

“Also, N260,000 for a Small Scale Mining License (SSML), N500,000 for a Quarry Lease, and N1,250,000 for firms operating with a Mining Lease. Following the renewal of licenses, the rates for the respective categories will be N42,000,”

New rates for royalties

  • Alake stated that the new regulations aim to maximise royalties from critical minerals such as lithium and gold to boost the nation’s revenue and contribute significantly to economic development.
  • He mentioned that under the new rates regime, lithium ore lepidolite, with a current market value of N600,000 per tonne, attracts a royalty of N18,000 per tonne.
  • Kunzite, valued at N3 million per tonne, attracts a royalty of N90,000 per tonne, while lithium ore spodumene, valued at N316,667 per tonne, attracts a royalty of N9,500 per tonne.
  • He also noted that the rates review affects services provided by the Mining Cadastre Office (MCO) and the Nigerian Geological Survey Agency (NGSA). According to Alake, the new rates regime takes immediate effect.

Aghogho Udi

Aghogho Udi

My name is Aghogho Udi, a writer, journalist, and researcher, deeply intrigued by the political economy of Nigeria and the broader African context. My focus lies in shedding light on the intricate connections between macroeconomics and politics, offering valuable insights that foster comprehension of Africa’s prevailing economic landscape and the world in general.

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