In today’s competitive world, identifying and exploit your areas of comparative advantage is the key to survival. The solid minerals industry holds the greatest potential apart from the Agricultural sector towards the attainment of the vision 20: 2020 which is geared at placing Nigeria amongst the top twenty {20} economies of the world by the year 2020 because of the rich mineral deposit in commercial quantity scattered in different parts of the country.
One of such mineral in Nigeria is Iron ore. There are over 3 billion tonnes of iron ore found in Kogi, Enugu, Niger, Zamfara and Kaduna States. The large deposit of oolific iron ores of Kogi and Enugu States are yet to be fully explored. Iron ore is used for making steel, transformer and motor cars, ferrous sulphate from waster liqueur of the steel picking process or by the direct reaction, metals for electrical shielding, electro-magnetic devices, electric bells, electric fan cage, equipment rack, instrument body, engineering works, hydrated salt, iron oxide pigments, various salts of iron and ferrites and chemicals.
The rate of steel consumption of a Nation is a direct reflection of the economical and technological advancemenet of such a Nation and if Nigeria is to increase her steel consumption from its current level, massive investment in the exploitation and processing of iron ore is required.
Nigeria’s national annual demand for iron rod which currently stands at two {2} is mostly been sourced from the recycling of waste metal scraps. Besides there are three inland rolling mills at Oshogbo, Jos and Katsina in addition to some privately owned rolling mills in Lagos, calabar and Kano. The nation also has the Aladja and Ajaokuta Steel complexes which are potential buyers of the iron ore to be produced apart from the lucrative international market.
A grant of a Mining License to a prospective company is subject to proof of economic reserve of the mineral commodity for which a concession is sought. The process involves the company first applying to the Honourable Minister for Certificate of Entry into Mining Industry. The requirements for this include submission of the company’s Certificate of Registration, evidence of technical competence and of financial capability.
The next step is for the company to apply and obtain a prospecting right (PR) to enable it carry out general and scientific prospecting for the categories of minerals within the prospecting right. If properly conducted, work on this right will guide the company towards zeroing into a particular mineral within a specific land area.
The company will then put up application for an exclusive prospecting license (EPL) in the State Mines Office where the mineral is located. This is an exploration license for a particular mineral(s) over a particular land area which, by law, should not exceed 22 square kilometers. Once granted, the area is held exclusively to the company which will now confidently invest in mineral exploration work on the area without hindrance. This license is renewable every one or two years depending on the nature of the terrain.
It is only after the company has satisfied itself of the availability of the mineral in commercial quantity on the EPL that it will apply for grant of a Mining License over the whole or part of the area covered by the EPL.
In the course of all these processes, the law insists that the company employs the services of a “technically competent person” in carrying out the prospecting under the PR, the exploration within the EPL and finally the extraction of the mineral within the mining licence area.
Some of the investment incentives in the solid minerals industry in Nigeria include
3-5 years Tax Holiday
Deferred royalty payments
Possible capitalization of expenditure on exploration and surveys
Extension of infrastructure such as roads and electricity to mining sites, and provision of 100% foreign ownership of mining concerns.
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Report Title: SMALL SCALE IRON ORE MINING IN NIGERIA, THE PRE-FEASIBILITY REPORT.
Report Code:FORA/05564-807/2015/IRONOREMININGINNIGERIA/7750-94773-33
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