The grant of Mining Lease is coordinated by the Federal Ministry of Mines and Steel Development(MMSD) under the Mining Cadastre Office approving same. It is also very instructive to note that applications for a mining lease in Nigeria must strictly comply and conform with requirements and procedures under the laws that regulate the sector, which include the Nigerian Minerals and Mining Act, 2007 and the Minerals and Mining Regulation 2011.
Under the Act, Section 56 stipulates that any qualified person may submit an application if same proceeds from an exploration License. Section 57 of the Act went on to provide for the requirements and procedure for a grant of mining lease which is summed up that a grant of a Mining License to a prospective company is subject to proof of economic reserve of the mineral commodity for which a concession is sought. The procedure involves;
- The company first applying to the Honourable Minister in charge of the Ministry of Mines and Steel Development for Certificate of Entry into Mining Industry. The requirements for this include (i) Payment of the prescribed fees (ii) Submission of the company’s Certificate of Registration, (iii) Evidence of technical competence and (iv) Evidence of financial capability.
- The next step is for the company to apply and obtain a Prospecting Right (PR) to enable it to carry out general and scientific prospecting for the categories of minerals within the prospecting right. If properly conducted, work on this right will guide the company towards zeroing into a particular mineral within a specific land area.
- The company will then put up an application for an exclusive prospecting license (EPL) in the State Mines Office where the mineral is located. This is an exploration licence for a particular mineral(s) over a particular land area which, by law, should not exceed 22 square kilometres. Once granted, the area is held exclusively to the company, which will now confidently invest in mineral exploration work on the area without hindrance. This licence is renewable every one or two years depending on the nature of the terrain. It is only after the company has satisfied itself of the availability of the mineral in commercial quantity on the EPL that it will apply for a grant of a Mining lease over the whole or part of the area covered by the EPL.
Requirements for grant of mining lease in Nigeria are as follows:
- Exploration License
- Certified true copy of company certificate and other incorporation documents
- Completed application forms
- Pre-Feasibility Report
- Prospecting plan
- Payment of processing fee
- Evidence of financial capability
- Evidence of technical competence or COMEG accredited geologist
- Irrevocable consent from the landowner(s) and/or occupier(s) to the applicant
- Attestation of non-conviction of criminal offences under the Act by a Lawyer
Section 60 of the Act stipulates that the duration of a Mining Lease is 25 years, which is subject to renewal, provided that the holder has complied with minimum work programme and all other legal and regulatory requirements for mining in Nigeria. The mining lease area shall be determined in relation to the ore body as defined in the feasibility study, in addition to an area reasonably required for the working of the deposit, not exceeding 50Km2 i.e. 250 CUs.’’
However, the mining lease must not be confused with various mining licenses applicable in the mining sector in Nigeria. Any investor or individual who intends to trade in Nigerian’s mining sector by merely purchasing mineral resources for the purpose of exportation or industrial use will only be required to obtain mining licenses such as Possess or Purchase License or Mineral Buying Centre License or Mineral Export Permit.
Finally, the mining sector has continued to emerge in the Nigerian economy in recent times, especially where the government is making enabling policies and efforts to diversify the economy. The requirements for obtaining mining lease in Nigeria and other requisite licenses may be cumbersome, but engaging a professional, such as legal any practitioner that has the knowledge of the enabling Act with experience in processing mining leases or licenses could be of a great assistance in expediting and simplifying the process.
Written by Energy, Power & Mining Law Department at Resolution Law Firm, Nigeria
Email: [email protected]