FRI, SEPTEMBER 9 2016-It seemed tempting, after Nigeria’s minister of mines and steel development, Kayode Fayemi, told a gathering of mining investors at the African Down Under Conference on developing investments and participation in the African mining space, that mining companies wanting to operate in Nigeria will enjoy a three years tax holiday. The investors say they were not tempted because that was an already know and existing official incentive.
Nigeria which has an estimated deposit of over 3 billion tonnes of iron ore in Kogi, Enugu, Niger, Zamfara and Kaduna States, has an already existing tax holiday incentive including deferred royalty payments, possible capitalisation of expenditure on exploration and surveys, an extension of infrastructure such as roads and electricity to mining sites and a provision of 100% foreign ownership of mining concerns.
“These investors were expecting a very elaborate discussion around legislation, regulations and talks around a very attractive and enabling environment devoid of interference, not talks about already known incentive,” says an expat who was in Perth Australia for the conference.
Our source say the country’s iron ore deposit development continues to be under developed because of the rigour of obtaining the mining license is ‘killing’ and a disincentive on its own.
“That has to be over hauled completely. It’s been there for ages,” he said.
To obtain a prospecting license, an investor has to first apply to the state where the iron ore deposit is located for a prospecting license which is renewable after every two years. The second step is to apply for a grant of mining license, which could take ages to process.
Meanwhile, Fayemi told the gathering at the conference that Nigeria was determined to build a world class minerals and mining ecosystem.
“We are focusing on rebuilding our minerals and mining sector in three phases: Phase 1, in the immediate term, we are achieving import substitution by winning over domestic users of industrial minerals. Phase 2, our focus is on further expanding our domestic ore and mineral asset processing capacity. Phase 3, we will return stronger to the global ore and minerals markets at a market competitive price point,” Fayemi said.
