Federal Gov’t Increases Royalties, Fees For Mining Operations

The Federal Government has increased royalties, various fees and levies paid by those operating in the country’s minerals and mining industry.
Minister of Solid Minerals Development, Dr Dele Alake, revealed this during a media briefing in Abuja on Thursday, saying that the old rates were obsolete.

Alake also noted that the old rates are not reflective of the enormous technological and infrastructural investments the country has made in recent years to make operations in the industry easier and more profitable for operators.

He, however, said the increment was not arbitrary but that all stakeholders were carried along in the decision process, adding that the rate adjustment ranges from 50 per cent to 100 per cent of the previous prices, depending on the nature of the mining-related operation.

According to him, the rates increase cuts across the 268 items of mining licences, royalties and other fees payable by mining operators, maintaining that the review would enhance the government’s capacity to reposition the mining sector effectively.

Alake added that the increment reflects the Federal Government’s commitment to increasing revenue from solid minerals to enhance service delivery and bolster mining’s contribution to economic development, just as he argued that those who are profiting from the investments made in the sector should pay rates that enable the government to recoup the funds expended for their benefit.

He explained that the aim was to implement the seven-point agenda of repositioning the sector for economic consolidation and international competitiveness.

Speaking on the new rates, the minister said, “Applicants for mining lease will pay N3 million; Reconnaissance permit, N300,000; Exploration Licence, N600,000; Small Scale Mining Licence, N300,000, quarry lease, N600,000 and water user permit, N300,000;

He further said, “Annual service fee is now N31,500 per cadastral unit for the first time; small-scale mining, N260,000; Quarry Lease, N500,000 and mining lease, N1,250,000.”

On penalties for late renewal of mineral titles, the minister said Reconnaissance permit now costs N600,000; Exploration licence, N1,500,000; Mining lease, N3,000,000 and quarry lease, N1,500,000.

“Royalty rate per standard weight of minerals will now cost 100 per cent more. Baryte, with N42,000 as market value per tonne attracts N2,100 royalty; coal, with N100,000 per tonne market value attracts N3,000; gold, with N1,081,200 per ounce as market value attracts N36,436 royalty per tonne; lead/zinc concentrate with 480,000 per tonne as market value attracts a royalty of N14,400 per tonne,” he said.

He further stated that lithium ore (Lepidolite) at the current market value of N600, 000 per tonne will now attracts N18,000 royalty per tonne; lithium (Kunzite) with current market value at million per tonne will now attracts N90,000 royalty per tonne and lithium ore (Spodumene) with a current market value of N316,667 per tonne will from now attracts N9,500 royalty per tonne.

Those seeking a licence to manufacture explosives will now pay N20 million, those who want to modify explosives will pay N10 million, while operators who wish to sell explosives for mining will pay N500,000, according to the minister.

“Investors willing to obtain a licence to refine gold will pay N5 million and a permit to operate a mineral processor costs N100,000. Mineral resources map of Nigeria will cost N500,000 and the geological map of Nigeria now costs N300,000,” he added.

Answering questions from journalists, the minister stressed that the new rates regime would take immediate effect, and those who flout the rule would have their licences revoked to make way for interested investors.

He added that the new regulations seek to maximize royalties from critical minerals like lithium and gold to boost the nation’s national income.

The rates review also affects services rendered by the Mining Cadastral Office (MCO) and the Nigeria Geological Survey Agency (NGSA).

Alake further explained that comprehensive details of the new rates regime will be posted on the ministry’s website, www.msmd.gov.ng.

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