MINING OPPORTUNITIES IN NIGERIA

Introduction/Overview

Nigeria like most African countries via a country blessed with a vast no of mineral resources
which have proven beneficial to its economy and has been a major source of its income.

Mineral resources according to Wikipedia is a concentration of materials of economic

importance, interest or value in/on the earth's crust in forms, quality and quantity that are of
reasonable prospect for economic extraction. Nigeria as a country is blessed with vast no if
these resources in commercial quantities. These mineral resources can be classified into 3 main
groups.

Mineral Resources

Energy Non Metallic Metallic

Energy: These are solid minerals whose major uses are in the production of energy and power.
They are hydrocarbons and are used majorly for combustion purposes to generate heat and
consequently, power generation. These include crude oil, coal, natural gas etc.

Non metallic Mineral Resources: These includes mineral resources that are non metallic in
nature. They include minerals such as mica, kaolinite, gypsum, etc and gem stones such as ruby,
sapphire, aquamarine, emerald, zircon etc.

Metallic Mineral Resources: These include ferrous, non ferrous as well as precious metals such
as gold, silver, iron, tin, nickel, copper etc.

ENERGY

The energy mineral resources are basically crude oil, natural gas and coal. However, these have
been dealt with by various articles, explored and exploited for so long and such, we will not be
a subject of interest in this write-up

NON METALLIC MINERAL RESOURCES

These are majorly divided into 3 groups namely

i. Gemstones

Nigeria is blessed with so much of these resources ranging from clay/sand products(kaolinite,
feldspars, sandstone, limestone, marbles,talc, dolomite etc) majorly used in production,
sculpture, cosmetics etc to gemstones such as tanzananite, opal, emerald, zircon, ruby etc
which are of great importance and of high value in the international market as luxury products
and jewelry production.

GEMSTONES

SAPPHIRE.

Sapphire is the most precious, valuable and costly blue Gemstone. Nigeria’s Sapphires are of
top grade quality, colors and can fetch up to $10,000 per gram in the International market.
(Un-polished).

Sources: Mambila Plateau in Taraba State, Kaduna State (Antah, Nisama, Gidan waya) Bogoro in
Bauchi State, Bokkos in Plateau State, and Gunda in Yobe State. The quality ranges from rich
indigo blue, fine pencil-shaped crystals with rich blue color to pale green and colorless varieties.

TOURMALINE

Tourmaline is the most popular, most colorful and most available gemstone in Nigeria.
Nigerian’s Tourmaline is of wide variety of colors: red, pink, green, blue, white, bi-color, tri-
color, watermelon, and Paraiba Tourmaline etc.

Sources: Nasarawa State (Keffi, Saura, Anngwan Mayo, Garaku, Gidan Kadiri, Anngwan Tudu,
Anngwan Doka, Kokona, Jaammar, Anngwan Lele, Nike, etc.) Oyo State (Idoko, Komu, Itasa,
Budo Are etc.), Kaduna Satate (Kagarko, Gidan Waya etc.), Kwara State (Lemo Ndeji, Ora, Oro
etc). Kogi, Taraba, Bauchi and Osun States.

EMERALD
Emerald, the bright green Gem of the beryl mineral family is another Gem found in large
quantity in Nigeria.

Sources: Gwantu in Kaduna State and Nasarawa Egon in Nasarawa State.

GARNET

Garnet of different varieties has been found in different part of Nigeria. Rhodolite Garnet is
minded extensively around Jos-Bauchi axis. A recent find of Sperssatite Garnet in the Komu area
of Oyo State has produced very good gems with colors varying from deep red through orange-
brown to orange colors. There has been a report of green tsavorite Garnet in the mix, which
was thought to be Tourmaline.

ZIRCON

Zircon is another Gem material commonly found in the tin fields of the Jos Plateau. The stones
come in colorless, brown, red, pink, yellow, and white colors, and are usually very clean. It is
available in commercial quantities in Antah and Nisama in Kaduna State. Beautiful crystals of
Kunzite Zircons have been found in Komu mines in Oyo State. Nigeria’s Zircons respond to heat
treatment producing very attractive colors. It can be used in place of Diamond because of its
hardness and color.

TOPAZ

Topaz is a well-known Gemstone sold in a wide variety of attractive colors, but the most
available colors in Nigeria are the white and blue colors. Nigeria is one of the major sources of
white Topaz to the International Gem Market. White Topaz is so abundant in Nigeria that it can
be sourced in tons. There are large deposits of Topaz in Jenta and Akwanga in Nasarawa State,
Jos in Plateau State, Koi in the Nok area and in many parts of Bauchi and Oyo States

AMETHYST

Amethyst is the most popular purple Gem. Nigeria’s Amethyst is of very high quality and occurs
in large quantities. Amethyst is being mined in Bauchi, Kaduna, Kano, Oyo, Nasawara etc.

Other gemstones such as ruby, arget, opal, heliodort etc have also been found at various parts
of the northern Nigeria. However, efforts are being made to finger their location and reserve.
In Nigeria, the petroleum sector has been playing major role in the economy since 1960s when
oil was discovered. This has given the oil sector the a prominent role acting as the pillar of the
economy contributing over 50% GDP and over 80% foreign exchange as at
2008(https://africacheck.org/reports/nigerias-economy-services-drive-gdp-but-oil-still-
dominates-exports/). The instability in the world oil prices, continual fall in prices, availability of
cheaper alternatives and it's environmental impacts has continually been the bane of the oil
and gas industry ,hence government, investors and private individuals are constantly looking at
alternatives in the mining industry hence the need for this report.

In Nigeria, the ministry of petroleum resources oversees all the activities involved in the
petroleum industry from the upstream to the downstream sectors using its different parastatal
while the ministry of Mines and steel development oversees the activities of all other mineral
resources in Nigeria.

Kogi state.

Kogi state was created in 1991 from parts of modern day Kwara and Venue states. Covering a
landmass of about 30,000km², the state hosts a population of about 3.3 million people. The
state is strategically located such that it shares a boundary with 10 other states from 5 of the 6
geopolitical zones in the country. With several hills dotting the landscape, the land is mostly
arable. The state also hosts the confluence of both rivers Niger and Benue hence agriculture has
become the major occupation of the people of the state.

The state is equally blessed with several mineral resources some of which bare available in
commercial quantities and are of great economic value if properly utilized. Some of these
mineral resources are
i. Coal. This is mostly found in ogboyoga and okaba areas of the state with a reported combined
reserve of over 200million tonnes. Coal is an important mineral resources that serves as a
source of energy for various domestic and commercial uses including in cement production

ii. Iron ore. This can be found in Itakpe, Okene and Agbaja areas of the state. Kogi state has 2
major steel complex (Aladja and Ajaokuta steel). They produce billets (which can be rolled into
bars) used majorly by the downstream sectors most especially used in construction and
manufacturing of heavy machinery. Itakpe deposit alone has about 310million tonnes of
reserve.

iii. Limestone. This is an industrial mineral resources with a large deposit in kogi state. With a
combined estimated reserve of about 568million tonnes, it is a strategic mineral which 8s
combined with crushed shale to produce glass and cement, used to produce fillers in cement,
plastic, rubber, paper etc. It is however majorly used in cement production. As at 2015, the
combined cement production capacity of Nigeria was between 26 - 28 million tonnes per year
while demand is about 18-20 million tonnes per year. It should however be noted that not all
the cement production plants were function at optimal capacity and also the growing demand
for the product due to increased infrastructural development and could make investing in this
solid mineral a profitable venture.

iv. Kaolinite. This is a type of mineral clay. Like limestone, it is an industrial mineral resources
that has a wide variety of uses in different sectors of the economy most especially agriculture,
medicine and cosmetic production. It is also added to feldspars to produce tiles, procelain
cooking wares, by fertilizer producing firms, etc.

Kaolinite deposit are abundant in Ahako village near lokoja.and this indeed has attracted the
attention of some investors such as Royal tiles into kogi state.

v. Feldspars. Quite similar to kaolinite, feldspars has almost the same uses as kaolinite as it is
also an industrial mineral resources and can be used in glass, cement, paper, plastic production,
tiles, etc. Feldspars is majorly found in Odobola, Ogodo areas of Kogi state in large commercial
quantities.

Marbles are also found in abundance in various parts of Kogi state. These are majorly used in
sculpture and building construction in Nigeria.

The above mineral resources have been found in large commercial quantities in Kogi state and
each are of great economic importance if exploited. Almost all of the above raw materials have
a ready market and player. However, with a well defined plan and proper execution, the sky is
wide enough for several birds to fly without touching wings.

OBTAINING A MINING LEASE

According to the Nigerian Minerals and Mining act,2007 and the Minerals and Mining
Regulation 2011,the granting of a mining lease is coordinated by the Federal ministry of mines
and steel development (MMSD) under the Mining Cadastral Office empowered to licence it. The
law also guides the process and requirements for the granting of a licence as well as the
categories they could fall under.

Under the Act, the granting of a mining licence to a prospective company is subject to prove of
economic reserve of the mineral commodity for which a concession is being sought. This
involves the following.

1. The company first applies to the minister in charge of the Ministry of Mines and Steel
Development for certificate of entry into the mining industry. The requirements for these
includes

I. Payment of prescribed fees

ii. Submission of Company's Certificate of Registration.

iii. Evidence of Technical Competence

iv. Evidence of Financial Capability.

2. The company proceeds to apply and obtain a Prospecting Right to enable it 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.

3. 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.
(https://www.resolutionlawng.com/procedure-for-obtaining-a-mining-lease-in-nigeria/)
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’’

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.

Keywords used.