Laws & Guidelines Regulating Solid Mineral Industry in Nigeria

Laws & Guidelines Regulating Solid Mineral Industry in Nigeria

Laws & Guidelines Regulating Solid Mineral Industry in Nigeria - You need to know about Nigerian minerals and mining regulations 2011, mining regulations in Nigeria, Nigerian minerals and mining act 2007, national minerals and metals policy 2008 Nigeria, mines and minerals act 2014, history of mining in Nigeria, problems of mining in Nigeria. Others are - Mining Cadastre office duties, Federal ministry of mines and steel development website and ministry of mines and solid minerals Nigeria.

What is the general conception about solid mineral in Nigeria?

Solid mineral is an element  of the  extractive  industry. In Nigeria, extractive  industry is majorly seen as comprising oil and gas, and Solid mineral. We need to know that agriculture is part of this industry.

In the present Nigeria where oil and gas is failing, attention is now being drawn to this other two sectors.

In this write-up attention is only paid to solid mineral sector of the extractive industry with emphasis only on the laws (legislation) and other forms of regulatory procedures.


Laws & Guidelines Regulating Solid Mineral Industry in Nigeria


Laws & Guidelines Regulating Solid Mineral Industry in Nigeria

Nigeria is endowed with over 120 important solid minerals of various categories some of which are yet to be exploited.

What are the Laws and guidelines regulating this industry in Nigeria?

Below are some of the relevant laws, policies, regulations and guidelines which regulate mining of solid minerals in Nigeria.:

1.The Minerals and Mining Act No. 20 of 2007.

The Minerals and Mining Act (MMA) is the principal legislation that regulates

this sector. It regulates all aspects of the exploration and exploitation of solid minerals in Nigeria. 
It replaces the Minerals and Mining Act, No. 34 of 1999 Act.
The MMA vests the control, regulation and ownership of all mineral resources in the
Federal Government of Nigeria. Some of the key features of the MMA are:

a. The eligibility requirements for granting of mineral titles: specifying the various titles – Reconnaissance permit, Exploration license, Small Scale mining Lease, Mining Lease, Quarry lease, and water use permit.

b. The establishment of the Mining Cadastre Office (MCO): saddled with the responsibility for the administration of mineral titles and the maintenance of the cadastral registers;

c. The granting  of title on a ‘first come, first served’ basis: Section 8 provides that where
several applications are received at the same time or for priority overlapping areas
from two or more persons on the same day, the application which is first
received in the proper form shall be deemed to have priority over the others;

d. Environmental Considerations: Section 11(1) provides that the holder of mineral title
shall, in exercise of his rights under the mineral title have regard, to the effects of the
mining operations on the environment and take such steps as may be necessary to
prevent pollution of the environment resulting from the mining operation; 

e. Mandates operators to make reservations for environmental protection, mine rehabilitation, reclamation and mine closure costs.

f. Dispute resolution provisions: which must first be settled on an amicable basis

g Tax incentives – including fees, royalties, and income tax which is based on Company Income Tax Act., exemptions from certain import duties, expatriate quota and residence permit etc.

h. Protection of existing communities, and

I Pre-conditions for commencement of mining.

j. Conditions for Transfer, renewal, and revocation, surrender of mineral titles.


2. The National Minerals and Metals Policy (2008)

The National Minerals & Metals Policy 2008  is a tool, developed by the

MMA, for establishing the new direction of development of the sector by the Nigerian Minerals and Mining Act, 2007, ss. 47-52.

The National Minerals and Metals Policy, 2008 is a policy thrust for the restructuring of the Ministry of Mines and Steel Development to enhance performance and regulate the sector
adequately by establishing four (4) new technical units namely the Mining Cadastre
Office, Mines Inspectorate Department, Artisanal and Small-Scale Mining Department
and the Mines Environmental Compliance Department.

The Policy is also designed to take active cognizance of the three tier governance
structure in force in Nigeria to be used for administrative convenience.  Section

6.0 of the Policy  emphasis on the need to develop a private sector-led mining industry that promotes private participation and recognises the private sector as the key to the development of the metal industry with the government restricting its role to that of a regulator.

Laws & Guidelines Regulating Solid Mineral Industry in Nigeria


The Policy has the following core objectives:

a. The Policy thrust as introduced by section 5.0 of the Policy aims at achieving a

substantial increase in employment opportunities, poverty reduction and thereby sustained growth in GDP.

b. Section 5.0 also provides for the implementation of the policy thrust which is aimed
at addressing the neglect of the past and respond to new and global developments
in the mining sector and consider possible areas of future action, which include:

Ensuring compliance with environmental best practices, ensuring an efficient and
effective management of the Nations Mineral Resources and promote technological
growth in the metals sub-sector, stimulate foreign investment, and encourage a
transparent mining titles and permit regime (which is a joint responsibility of the
Mining Cadastre Office, Mines Inspectorate Department, and Artisanal and Small scale Mining department)

c. The Policy, through Section 8.1, aims to promote linkage with the National economy
through the enforcement of the use of domestic metal products for the development
of the nation’s infrastructure.

d. Furthermore, in boosting the economy, through Section 8.2 of the Policy, the Federal
Government hopes to accelerate the export of metals and metal related mineral
products so as to substantially improve the non-oil foreign exchange earnings of the
country by promoting competitiveness of value added products so as to stimulate
domestic and export demand of metal.

Laws & Guidelines Regulating Solid Mineral Industry in Nigeria

3. Nigerian Minerals and Mining Regulations 2011

The Nigerian Minerals and Mining Regulations was issued by the Ministry. The objective of the Regulations is to establish a more coordinated and accountable solid minerals sector in the country and to stamp out the discretionary grant of mineral titles.


The Regulations set out the rules, procedures and processes for the acquisition of
mineral title thereby streamlining the procedures for granting licenses to investors (both
local and foreign).

4. Guidelines on Mineral Titles Application 2014

The Guidelines on Mineral Titles Application was issued by Nigeria

Mining Cadastre Office. The Cadastre Office was established in 2007 with the responsibility of administration and management of mineral titles in Nigeria in accordance with the provisions of the Minerals and Mining Act No. 20 of 2007.

5.The Constitution of the Federal Republic of Nigeria:

The 1999 Constitution of the Federal Republic of Nigeria as amended places Mines and Minerals activities under the Exclusive Legislative List. This means that the federal government has exclusive powers and jurisdiction on all matters relating to it.

Also, all taxes and royalties derived from mining activities go to the federation account
Instead of the various States from whose territory such mining activities occurred.
The land use Act: The Land Use Decree (now Land Use Act) was promulgated on 29th of March 1978. Certain provisions of this act are: 

1. Subject to the provisions of this Act, all land comprised in the territory of each State in the Federation are hereby vested in the Governor of that State and such land shall be held in trust and administered for the use and common benefit of all Nigerians in accordance with the provisions of this Act.

2.(1) As from the commencement of this Act -

(a) all land in urban areas shall be under the control and management of the Governor of each State. And

(b) all other land shall, subject to this Act, be under the control and management of the Local Government, within the area of jurisdiction of which the land is situated.

 (2) There shall be established in each State a body to be known as "the Land Use and Allocation Committee" which shall have responsibility for

(a) advising the Governor on any matter connected with the management of land to which paragraph (a) of subsection (1) above relates;

(b) Advising the Governor on any matter connected with the resettlement of persons affected by the revocation of rights of occupancy on the ground of overriding public interest under this Act; and

(c) determining disputes as to the amount of compensation payable under this Act for improvements on land.

Laws & Guidelines Regulating Solid Mineral Industry in Nigeria

The implication of the above is that:

The Act vests all land comprised in the territory of each state (except land vested in the Federal Government for its agencies) solely in the hands of the governor of the state who would hold such land in trust for the people.
And therefore regulates access to land for any purpose including mining activities. Also Section 28 (1) (c) provides that the Governor of a state can revoke a right of occupancy for an overriding public interest.

Therefore, where a mineral deposit is found to be in commercial quantity in an area of land, there is an overriding public interest in that land which could cause the revocation of the certificate of occupancy.

Similarly, Section 22 (2) of the MMA provides that where a mining lease or quarry lease is

granted over a land that is subject to an existing statutory or customary right of occupancy, the governor of the state within such rights granted, shall within 60 days of such grant or declaration revoke such right of occupancy in relation to section 28 of the land use act.
The prior titleholder of that land would however be compensated.

(6) Environmental Impact Assessment Act Cap E12 LFN 2004 (EIAA).

This Act makes it mandatory to conduct an Environmental Impact Assessment (EIA) in respect of any proposed project.

It specifically places a restriction on commencement pf any public or private project without prior consideration of the likely environmental effects. It Further provides that projects on the mandatory study list, which includes mining, are expressly prohibited from being carried out without the Nigerian Environmental Protection Agency taking a decision or issuing an order that the project can be carried out with or without conditions.

The land user (lease) must therefore enter into community development agreement part of which must deal with the environmental impact assessment as well as the environmental rehabilitation program which will also be submitted to the Mines Environmental Compliance Department (MECD).

(7) The Companies and Allied Matters Act, CAP C20, LFN, 2004

The Companies and Allied Matters Act 2004 (“CAMA”) regulates company formation

and operation in Nigeria and provides that no foreign company may carry on business in
Nigeria unless it incorporates a local subsidiary in the country. The MMA incorporates
this by providing that no person shall be qualified for the grant of any mining title unless
the person is a body corporate duly incorporated under CAMA.

Laws & Guidelines Regulating Solid Mineral Industry in Nigeria

(8) Companies Income Tax Act, CAP 60, LFN, 1990 (CITA)

The following taxes are required to be paid by a mining company: corporate income tax;

education tax; personal income tax of its staff; value-added tax; capital gains tax; and
withholding tax. Companies involved in mining activities are assessed to tax under the Companies Income Tax Act (CITA), while individuals and partnerships engaged in mining activities are liable to tax under the Personal Income Tax Act (PITA).

CITA provides for the following fiscal and tax incentives:

a. 95% Qualifying Capital Capital Allowance
b. Capitalisation of expenditure incurred in the year in which the investment was made on all certified exploration, development and processing activities including feasibility study and sample assaying cost.
c. Capitalisation of Infrastructure costs incurred regardless of ownership or replacement. 
d. To write off initial losses incurred until it is exhausted.

(9) Personal Income Tax Act 2011, CAP P8, LFN, 2004

There are payments that must still be made by interest holders to the

government. The Regulations state that the holders of all titles, apart from reconnaissance permit holders, are required to pay royalties to the state as well as other taxes.
Royalties are calculated ad valorem ranging from 3 per cent to 5 per cent depending on the type of mineral. However, Section 33 of the regulations provides that the minister may reduce or waive the royalty if he is satisfied that the mineral being mined or explored is exported solely for experiment or analysis in a reasonable quantity. The only tax payable by a mining company is the Education Tax (EDT) which is calculated on a 2 per cent basis.


Laws & Guidelines Regulating Solid Mineral Industry in Nigeria

(10) Nigerian Investment Promotion Commission Act 1995, CAP N117, LFN, 2004 (NIPC)

This Act established the Nigerian Investment Promotion Commission, to encourage and promote investment in the Nigerian Economy, and for matters connected therewith.

Section 29 (2) of the MMA provides that the specifications of the NIPC Act shall apply to
any foreign investment made in respect of any mineral title granted pursuant to this act. This means that the provisions of the NIPC Act that apply to foreign investors, shall also
apply to same who have made investments in respect of any mineral titles.

The NIPC Act is particularly useful in the area of dispute resolution as regards to solid
mineral mining. The MMA provides in section 141 that where a dispute is not settled
amicably the provision of the NIPC should be applied.

If the dispute is not amicably settled through mutual discussions, it may be submitted at
the option of the aggrieved party to arbitration as follows:-

a. In the case of a Nigerian investor, in accordance with the rules of procedure for
arbitration as specified in the arbitration and conciliation act;

b. In the case of a foreign investor, within the framework of any bilateral or
multilateral agreement on investment protection to which the federal government
and the country of which the investor is a national are parties; or

c. In accordance with any other national or international machinery for the
settlement of investment disputes agreed on by parties.

Laws & Guidelines Regulating Solid Mineral Industry in Nigeria

However, where in respect of ‘any’ dispute, there is disagreement between the investor
and the Federal Government as to the method of dispute settlement to be adopted, the
International Centre for Settlement of Investment Dispute (ICSID) Rules shall apply.

This option for international investors has limitations because ICSID arbitration is only
possible if the party voluntarily submits to it.
source: Nigerian cadestre office.

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