The Ministry of Mines and Steel Development (MMSD) had identified thirty-four minerals of economic importance in Nigeria across the six regional mining zones. Every state, apart from Bayelsa is said to contain areas of mineral wealth. Within the minerals, Government has highlighted a number of strategic minerals that have the pootential to contribute significantly to Nigeria’s economic development. These include barite, gold, bitumen, iron ore, lead/zinc, coal and limestone.
Gold is a chemical element with symbol Au {from Latin:aurum} and atomic number 79. Gold is a dense, soft, shiny, malleable and ductile metal. Pure gold has a bright yellow colour and luster traditionally considered attractive, which it maintains without oxidizing in air or water.
There are proven reserves of both alluvial and primary deposits of gold with proven reserves in the schist belt covering the western half of Nigeria.The most important occurrences are found in the Maru, Anka, Malele, Tsohon Birnin GwariKwaga, Gurmana, Bin Yauri, OkolomDogondaji and Iperindo areas, all associated with the schist belts of northwest and southwest Nigeria. There are also a number of smaller occurrences beyond these major areas.
At present exploitation of alluvial deposits is being carried out mostly by artisan miners in a few places in the country. A number of primary deposits, which are sufficiently big for large scale mechanised mining, have been identified in the northwest and southwest parts of the country.
Given the huge quantity of gold stored above-ground compared to the annual production, the price of gold is mainly affected by changes in sentiment (demand), rather than changes in annual production (supply).According to the World Gold Council, annual mine production of gold over the last few years has been close to 2,500 tonnes.
About 2,000 tonnes goes into jewellery or industrial/dental production, and around 500 tonnes goes to retail investors and exchange traded gold funds.
Jewelery consistently accounts for over two-thirds of annual gold demand. India is the largest consumer in volume terms, accounting for 27% of demand in 2009, followed by China and the USA.
Industrial, dentistry and medical uses account for around 12% of gold demand. Gold has high thermal and electrical conductivity properties, along with a high resistance to corrosion and bacterial colonization. Jewelery and industrial demand has fluctuated over the past few years due to the steady expansion in emerging markets of middle classes aspiring to Western lifestyles, offset by the financial crisis of 2007–2010.
Obtaining Mining Lease in Nigeria
There are two options available to a company or an individual to enter into the mining industry in Nigeria.
Through the acquisition of an existing mining property from the original owner. Approval must be obtained from the Ministry of Solid Minerals Development for such a purchase.
By obtaining on application, either a Prospecting Right (PR), an Exclusive Prospecting Licence (EPL), or a Special Exclusive Prospecting Licence (SEPL), the application should state financial and technical capability qualifying the applicant for entry into the mining sector.
Incentives / Government Policy on Mining in Nigeria
In order to encourage investment in the solid minerals industry in Nigeria, Government is the offering the following incentives
1. 3-5 years Tax Holiday
2. Deferred royalty payments
3. Possible capitalization of expenditure on exploration and surveys
4. Extension of infrastructure such as roads and electricity to mining sites, and provision of 100% foreign ownership of mining concerns.
The mining industry in Nigeria is regulated by the The Nigerian Minerals and Mining Act of 2007, National Minerals and Metals Policy 2008 and Nigerian Minerals and Mining Regulations 2011.
The percentage of royalty charged in the mining industry in Nigeria range between 3%- 5%.
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