Current reforms through a new roadmap approved by the Federal Government in 2016 for the mining sector in Nigeria, are seen to be drawing interest from multinational giants with credible financial, business and technical history in the industry, BusinessDay has learnt.
In August 2016, the Federal Executive Council approved the roadmap, which it said was built on the old roadmap and seeks to grow the contribution of mining to Nigeria’s Gross Domestic Products (GDP) in line with the Federal Government’s determination to further diversify the nation’s economy.
“What I can say is that, as at today, we’ve received much of unsolicited interest. We haven’t even placed an advert in any medium. We haven’t appointed a transaction adviser, we haven’t done any of that but we are receiving unsolicited interests from private companies, from state owned enterprises, from other countries, such as China,
Russia, Ukraine, Belarus,” said Kayode Fayemi, minister of mines and steel development, in an exclusive interview with BusinessDay recently.
One key reform in the roadmap is that foreign firms can own their companies 100 percent and seamlessly repatriate funds, just as state governments are now allowed to approve consent given to mining
prospectors by host communities.
Before now, interested miners often took consent documents from host communities directly to the Federal Government, after they got licenses.
However, the system resulted in disputes, culminating in project delays, due to the fact that the Federal Government approved consent for miners’ ownership of land titles who did not correctly obtain them from host communities.
At the moment, the new reforms in the new mining roadmap have addressed this and international miners are beginning to show an increasing appetite to do business in Nigeria.
“I’ve just finished speaking with the managing director of Vedanta Resources, they have the largest lead/zinc mine in the world. We are rich in lead and zinc, we have one of the largest lead and zinc deposits in Plateau State, and he was interested and we struck an engagement, with directives from me to my team here to go and work out
the details for their coming into Nigeria to work,” the minister told BusinessDay on the sidelines of the Investing in African Mining Indaba in Cape Town, South Africa.
Also, in June 2016, Thor Explorations Limited announced its acquisition of 100 percent of Segilola Gold Project in Osun State, which has an indicated mineral resource estimate of 555,000 ounces of gold, and is considered the most advanced gold project in Nigeria.
The property comprises of mining license ML41, which is the 17.2 square kilometers in size, as well as exploration license EL19066.
Under the terms of a share purchase agreement among Thor, TML and Delano, Thor acquired 100 percent shares of SROL in consideration for a cash payment of $1.6 million.
Thor is a Canadian mineral exploration company engaged in the acquisition, exploration and development of mineral properties, with West African operations currently located in Senegal and Burkina Faso.
It holds a 70 percent interest in the Douta gold project located in south-eastern Senegal and 100 percent interest in the Bongui and Legue gold permits, located in Houndé greenstone belt in the south west of
Burkina Faso.
The situation has also improved to the level that miners can now access funds from the Natural Resource Development Fund, where 1.68 percent of the Federation Account is domiciled, and from where came the N30 billion funding for miners, approved by the Federal Government in 2016.
Furthermore, local miners will not have to travel abroad to test mineral samples due to the fact that Nigeria has no world class laboratory for such purpose, as the government has entered into agreement with a company called SDS to upgrade the mineral testing labs owned by the Nigerian Geological Survey Agency in Kaduna State.
