FG reviews mining rates to accelerate sector reform

…Pegs Mine Lease License for N3 Million
…More royalties are in the works

The federal government, through the Ministry of Mineral Resources Development, has announced a new tariff regime for the mining sector aimed at facilitating ease of doing business and consolidating ongoing reforms.

Dele Alake, Minister of Mineral Resources Development, who made the announcement at a press conference, said the review underlines the Federal Government’s commitment to increasing revenues from minerals to improve service delivery and strengthen the sector’s contribution to economic development.

The Minister said under the new system, investors applying for a Mining Lease will pay N3 million while Small Scale Mining Lease (SSML) applicants will pay N300,000 for the first two cadastral units. The cost of obtaining an Exploration Licence (EL) is N600,000 for the first 100 cadastral units. Currently, a Quarry Lease attracts N300,000 while an Exploration Permit is N300,000.

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He added that the new rules, introduced after consultation with industry representatives, aim to discourage speculation and address the lack of funds that limit the federal government’s ability to facilitate business in the sector.

The new rates, which apply to 268 positions in the industry, include an annual service fee of N31,500 for the first time, N260,000 for a small-scale mining licence (SSML), N500,000 for a quarry lease and N1,250,000 for companies operating under a mining lease.

Upon licence renewal, the rates for the various categories will be: N42,000 for an exploration licence, N420,000 for a small-scale mining licence (SSML), N1,500,000 for a mining licence and N1,100,000 for a quarry licence.

The new regulations also apply to other services, including applications for mineral rights at the Mining Cadastral Office (MCO), as well as the transfer, extension, waiver and consolidation of mineral rights.

According to Alake, the new regulations aim to maximise royalties from the extraction of key minerals such as lithium and gold, which will increase the country’s revenue and contribute significantly to economic development.

Under the new rates, lithium ore (lepidolite) with a current market value of N600,000 per tonne is subject to a royalty of N18,000 per tonne; lithium (kunzite) with a current market value of N3 million per tonne is subject to a royalty of N90,000 per tonne while lithium ore (spodumene) with a current market value of N316,667 per tonne is subject to a royalty of N9,500 per tonne.

The rate review also applies to services provided by the Mining Cadastral Office (MCO) and the Nigeria Geological Survey Agency (NGSA). Details of the new rate system will be published on the Ministry’s website, www.msmd.gov.ng.

The Minister confirmed that the new rates come into force immediately.