Nigeria’s mining cadastre system as gateway for $60b investments
Nigeria’s solid minerals industry is believed to have the capacity to generate yearly revenue of $60 billion if properly harnessed. To achieve this, investors need to have an idea of how the cadastre system works, considering the country’s reputation as it relates to regulation. To operators, a well-implemented mining cadastre could make a difference in challenging environments. FEMI ADEKOYA writes on the updated system and implications for attracting needed investments.
An excerpt from the report of the Institute of Race Relations, titled ‘Steering Mining into the Future: Can the mining industry prepare itself for a reinvigorated tomorrow?’, argues that the recovery of the mining industry is possible, but will require “significant” reforms.
The reforms, indeed, bordered on the need to develop a system that is devoid of bureaucracy and offers a “one-stop-shop” approach to granting mining permits or licences.
According to Geological expert, Bill Feast, “A poorly implemented mining cadastre system could complicate an already complex regulatory environment,” adding that this was currently the case in South Africa, where the mining cadastre system impacted negatively on investment into the country’s mining sector.
He noted that for a mining cadastre to be successful, it had to achieve a balance between protecting and guaranteeing the rights of the State and the titleholders.
This apparently informed the establishment of a Mining Cadastre Office (MCO) and subsequent reforms to ensure that the mining sector is able to attract needed investments.
The Minister of Mines and Steel Development, Olamilekan Adegbite while speaking on investment opportunities in the Nigerian mining sector at the 2020 Mining in Indaba, South Africa, stated that Nigeria has made headway in de-risking the mining sector by improving geoscientific data and by developing a coherent downstream mineral policy.
“With our favourable geological formations which consist principally of three major lithological components – the Basement Complex, Younger Granites, and Sedimentary Basins – Nigeria is best suited today for big players in the global mining sector.
“We are endowed with 44 different mineral types that occur in commercial quantities in more than 500 locations across the 36 States and the Federal Capital Territory of the country. Seven of these minerals have been tagged as strategic for immediate development. These are Coal, Iron Ore, Bitumen, Gold, Limestone, Lead/ Zinc, and Barite.
“The designation of these minerals as strategic stems from their potential to make significant contributions to Nigeria’s economic development. These strategic mineral assets are available across the federation as proven reserves.
“We are also adopting a forward-thinking approach, by developing the strategic minerals of the future. These include minor metals such as titanium and cobalt, which are vital to futuristic industries such as telecoms and electric vehicle manufacturing”, Adegbite told investors.
Reforms and future of Nigeria’s mining industry
Though Feast had argued that there were various challenges with regard to the implementation of a mining cadastre system that had to be considered to ensure that the system functioned optimally, Adegbite explained that the Ministry embarked upon major reforms on the principle that government serves as a business-friendly regulator, providing the enabling environment for businesses to thrive.
According to the Minister, under the reforms, the private sector is seen as the catalyst of growth that will drive the sector forward.
“Underlining the vision itself is a strict promotion of transparency regime that empowers patrons to build trust and ensure accountability. For example, the “first-come-first-serve” and non-discretionary granting of mineral titles policy of the Mining Cadastral Office, now ensure the issuance of 6 types of licenses and permits to cover all activities from exploration to mineral production as well as granting of licenses between 30 – 45 days using transparent rules and regulations.
“The recent establishment of the Investment Promotion and Mineral Trade Department is indicative of our zeal and preparedness to welcome global investment partners. We will strengthen the Investment Promotion and Mineral Trade Department to provide all the necessary assistance investors will demand. I urge you to take advantage of the incredible incentives put in place to support all visionary investors in the sector”, Adegbite added.
Encouraging investors through incentives
With the dynamics of global trade changing as a result of many sovereign entities reviewing their alliances, the need to sell the country’s mining industry becomes important than ever.
Adegbite said the country has learned its lessons from neglecting the development of the nation’s solid minerals sector.
According to him, the Federal Government is determined to protect any direct foreign investments as indicated in the Nigerian Mineral and Mining Act 2007.
The Minister allayed investors’ fears and assured them that the mining sector was very friendly and that the government had put in place incentives that would favour investors in the sector.
“Our focus is now on de-risking the sector, by the provision of more up-to-date and comprehensive data on mineral occurrences in Nigeria and enabling a more investor-friendly environment through favourable incentives.
“The upsurge of mineral exports from the informal and small-scale miners has encouraged the country to confidently promote activities that will trigger the emergence of a new vista and its sustainability”, he added.
Some of the innovations embarked upon by the Ministry, according to Adegbite, is the upgrade and expansion of the nation’s database to de-risk the Nigeria Mining jurisdiction in order to make potentials more palatable to investors.
“The ongoing National Exploration Project (NIMEP), is the government’s rapid response to the dearth of investible geoscience data. NIMEP Contracts have been awarded to five JORC certified exploration companies for further investigation into gold, lead, zinc, iron ore and rare earth metals which we consider priority minerals along the identified mineral corridors.
“At the end of the exercise, the viable areas will be delineated into concession blocks for interested investors to bid.
“The upgrading and automation of the Nigeria Mining Cadastre Office for full online operations will be completed this year. The major objective of this project is to make online applications for titles seamless. This will cut down the time for processing licenses from 45 days to 15 days”, he said.
On his part, the Director-General/ Chief Executive Officer of the National Steel Raw Materials Exploration Agency (NSRMEA), Umar Hassan, explained that the trip to Mining Indaba, Cape Town, South Africa, presented an opportunity for the Ministry to expose to the international community the mineral endowments of the country, including the latest developments in the minerals sector in terms of the efforts of the government to generate credible geoscience data and de-risk the sector.
On investors’ perception about the industry, Hassan said: “Responses from investors were positive in that majority of them indicated their interest in visiting Nigeria to explore investment opportunities in the mining sector.
“Outcome of the NIMEP project is keenly being awaited by investors with investors already lining up for copies of the reports. Presentations made, especially by the Honourable Minister were warmly received. Experiences shared by existing investors in Nigeria also helped to convince other investors to take interest in Nigeria’s Mining Sector”.
In his presentation, the Director-General of the Nigeria Mining Cadastre Office, Obadiah Nkom, stated that the development and implementation of a computerized online Mineral Title administration system, that is, the establishment of a web-based administration and management of Mineral Title system, is expected to be completed next month.
For customers, he explained that the new cadastre administration system will aid better services for customers, reduced application processing time, enhance online applications; following the currently amended law, increased transparency and better access for customers to follow-up their applications and licenses, as well as notifications for license holders.
Though the availability and quality of historical data and the lack of infrastructure continue to pose a challenge in many African countries, a mining cadastre system in Nigeria and in the continent is expected to attract investments, but would also be faced with the challenge of managing the interests of large-scale and artisanal miners, as well as that of local and foreign investors.