Mining sector is one of the lucrative sectors of the Nigeria economy. Nigeria is endowed with several types s of mineral resources.
Every investor or company willing to engage in the Nigerian mining sector requires a government approval or license to proceed. Mining license in Nigeria is usually relevant for companies seeking to engage in the mining sector, with or without a mining lease.
There are two major types of mining licenses in Nigeria that are relevant and important for every company engaging in mining sector, depending on their type of activities in the sector. These licenses are Possess or Purchase License and Mineral Buying Centre license. Also important for companies that choose to export the mineral resources is the Mineral Export Permit. The Mining Cadastre Office within the Ministry of Mines and Steel Development (MMSD) are responsible for the issuance of mining licenses and permit.
All the mining licenses and permit serve different purposes and their conditions for issuance come with different requirements. It is important to separately highlight and discuss the various licenses.
POSSESS OR PURCHASE LICENSE
The Possess or Purchase license is required from company seeking to deal in mineral resources. The Nigerian Mineral Resources Act 2007 stipulates a strict punishment for any individual or company who engage in any mineral resources handling without this particular license.
The requirements to obtain a Possess or Purchase License are as follows:
- Certificate of Incorporation of the Company and other incorporation documents
- Application letter stating the type of minerals to be possessed or purchased
- Evidence of technically competent person such as Geologist with COMEG accreditation.
- Tax clearance certificate of the company
- Attestation of non-conviction for a criminal offence by a Legal Practitioner
- Banker’s Reference Letter
- Letter of consent from a Mineral title holder to be possessed or purchased
- Payment of prescribed fee
When a Possess or Purchase License is issued, the duration is 1 year subject to renewal.
MINERAL BUYING CENTRE LICENSE
The Mineral Buying Centre License is required for companies or industries willing to process mineral resources in Nigeria. It is also relevant for any companies that choose to warehouse mineral resources, either temporarily or permanently.
The purpose of the license is to regulate and authorize any warehouse where mineral resources will be kept. Any company that wish to engage in warehousing of different quantities of materials for purpose of storing or trading same can obtain this license.
The requirements for obtaining Mineral Buying Centre License are similar to that of Possess and purchase License. However, every applicant for the license must have acquired a warehouse to be used for the purpose prior to the application, as such facility would be duly inspected before the issuance of the license.
MINERAL EXPORT PERMIT
Mineral Export Permit is the license or permit that enables any individual or company to export mineral resources out of Nigeria. Export Permit must be obtained each time any resources are to be exported out of Nigeria.
The important requirements for obtainment of Export Permit are as follows:
- License to Possess or Purchase mineral resources
- Application letter stating the quantity, type and destination of the mineral resources to be exported
- Export Certificate from the Nigeria Export Promotion Council
- Evidence of payment of royalties to the Federal Government.
- Payment of prescribed fees.
COST OF MINING LICENSE
The cost of mining license that can be charged by any professional handling such process depends on the nature of work to be done in the course of it. The official cost for the Possess or Purchase License is fixed at just about N30, 000. The processing fee a professional handling such process will be charged can be expected to be far higher than the quoted official fee. However, it is advisable that individual or company applying for any mining license in Nigeria should negotiate the final cost for processing any license with a professional consulted to handle it.
In conclusion, Nigerian mining sector is thriving and it continues to attract an increased attention and focus from government and investors, both foreign and domestic. However, it is an offense to deal in mineral resources without the requisite license in Nigeria.
Written by Energy, Power & Mining Department at Resolution Law Firm, Nigeria
Email: [email protected]