| Guide on How to Acquire a Mining
License in Nigeria
The mining industry in Nigeria is a significant contributor to
the country’s GDP, with various players operating in this space.
To engage in any mineral resource activities, companies or
individuals must obtain the proper licenses and permits from the
government.
Meaning of Mining License
A mining license is an official document or certificate granted
by a government agency that allows a company or individual to
engage in mining activities such as extracting, processing, and
trading mineral resources.
The mining license specifies the minerals, geographic area, and
duration for which the holder is permitted to perform mining
operations.
The primary legislation regulating mining in Nigeria include the
Nigerian Minerals and Mining Act 2007, National Minerals and
Metals Policy 2008, and Nigerian Minerals and Mining Regulations
2011.
Other legislations that are important in the regulation of the
mineral mining industry include the Nigerian Investment
Promotion Commission (NIPC) Act1, the Companies and Allied
Matters Act, 2020, the Foreign Exchange (Monitoring and
Miscellaneous Provisions) Act, and tax laws.
Types of mining licenses
There are various types of mining licenses, such as Exploration
License, Mining Lease, Small Scale Mining Lease, Possess or
Purchase License, Mineral Buying Center License, and Mineral
Export Permit, each with their own set of requirements.
Exploration License
The Exploration License is the first step in the process of
obtaining mining rights in Nigeria. It grants the holder the
right to explore and assess the viability of mineral deposits
within a specified area. It is valid for an initial period and
can be renewed based on performance.
Once the exploration phase is successful and the presence of
commercially viable mineral deposits is established, the holder
of the Exploration License can then apply for an Exclusive
Prospecting License (EPL) and eventually a Mining Lease.
The key requirements for obtaining an Exploration License in
Nigeria are:
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
Mining Lease
A mining lease is awarded for a surface area without a prior
exploration license or small-scale mining lease, unless the
applicant already has one over the same region. The lease is for
a maximum of 50km². The mining lease grants the holder the
exclusive right to use and extract minerals within the lease
area. The mining lease holder has the right to market, sell,
export, and dispose of mineral products produced during mining
activities. Mining leases are awarded for 25 years and renewed
every 24 years, provided certain conditions are met.
The key requirements for obtaining a Mining Lease in Nigeria:
The applicant must be a holder of a valid Exploration License,
which allows them to explore and assess the viability of mineral
deposits within a stated area.
The following documents must be submitted by the applicant:
Certified true copy of company 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)
Attestation of non-conviction of criminal offences under the Act
by a Lawyer
The applicant must show that a commercial quantity of mineral
resources exists in the region for which the lease is requested.
The applicant must have met all of the conditions of the
Exploration License for the area in question.
The applicant must give proof of sufficient operating capital
for the proposed mining operations and demonstrate technical
competence in carrying out the proposed mining activities.
Small Scale Mining Lease
The small-scale mining lease has a smaller geographic area and
is intended for artisanal, alluvial, and other small-scale
mining operations. The license is valid for 5 years and can be
renewed for up to 5 more years.
The key requirements for obtaining a Small-Scale Mining Lease
(SSML) in Nigeria are:
The applicant must be a Nigerian citizen or a company
incorporated in Nigeria.
The proposed mining area must not exceed 3 km2 (15 cadastral
units).
The applicant must submit the following documents:
Completed application forms
Certificate of incorporation and other company documents
Evidence of technical competence, such as a COMEG accredited
geologist
Evidence of financial capability to carry out the proposed
mining operations
Irrevocable consent from the landowner(s) and/or occupier(s)
Attestation of non-conviction for criminal offenses under the
Act
The applicant must demonstrate that the proposed mining
operations will be conducted using low-level technology and
methods that do not require substantial capital expenditure.
The applicant must pay the prescribed application and processing
fees.
Possess or Purchase License
The Possess or Purchase License is required for companies
seeking to deal in mineral resources. This license enables an
entity that does not own or possess a mining lease to operate
directly in mineral trading or exporting. The license is valid
for one year and can be renewed.
The key requirements for obtaining Possess or Purchase License
include:
Certificate of incorporation and other company documents
Application letter stating the minerals to be possessed or
purchased
Evidence of a technically competent person like a geologist with
COMEG accreditation
Tax clearance certificate
Attestation of non-conviction for a criminal offense by a Legal
Practitioner
Banker’s reference letter
Letter of consent from a mineral title holder
Payment of the prescribed fees
Mineral Buying Centre License
The Mineral Buying Centre License is specifically authorises the
holder to operate a facility for processing, warehousing, and
trading of mineral resources.
The key requirements for obtaining a Mineral Buying Centre
License (MBC) in Nigeria are:
The applicant must be a company incorporated in Nigeria. Foreign
companies must incorporate a local Nigerian subsidiary to be
eligible.
The applicant must have an established warehouse facility that
will be used to process, store, or trade mineral resources. This
warehouse facility will be inspected as part of the application
process.
The applicant must submit similar documents as required for the
Possess or Purchase License, including:
Certificate of incorporation and other company documents
Application letter stating the minerals to be traded
Tax clearance certificate
Attestation of non-conviction for a criminal offense
Banker’s reference letter
Letter of consent from a mineral title holder
The applicant must demonstrate technical competence, such as
having a geologist with COMEG accreditation on staff.
The applicant must pay the prescribed application fees for the
Mineral Buying Centre License.
Mineral Export Permit
The applicant must already hold a valid Possess or Purchase
License, which allows them to deal in the specific mineral
resources they want to export.
Export Certificate:
The applicant must obtain an Export Certificate from the
Ministry of Mines and Steel Development, which certifies the
mineral resources are legally sourced and ready for export.
Evidence of Royalty Payment:
The applicant must provide proof that the required royalties
have been paid to the government for the mineral resources being
exported.
Prescribed Fees:
The applicant must pay the prescribed fees set by the government
for the Mineral Export Permit.
Incentives available for participants in the Nigerian Mining
Industry
The incentives provided by the Nigerian government to support
the mining industry include:
Allow for a 75% depreciation or capital allowance on verified
true capital expenditure in the first year of investment and 50%
in subsequent years.
There is a 5% investment allowance and the ability to capitalize
any prospecting expenses.
Approved plant, machinery, equipment, and accessories imported
for mining activities are exempt from customs and import
charges.
Approved expatriate
personnel of the operation are exempt from expat quotas and
residency permits.
Expatriate personnel have a personal remittance quota and are
not subject to any taxation for transferring foreign currency
out of Nigeria.
Tax exemption for the first three years of operation. The
minister might extend the period for another two years if the
operator meets certain conditions.
Foreign investors are protected from nationalization and
expropriation of their mining titles, unless the acquisition was
conducted in the national interest or for public purpose and
under a legislation that includes compensation and access to
court.
Fill our application form:
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