A Nigerian government spokesman confirmed on Thursday that under new guidelines being developed, new mining licenses will only be granted to companies that have submitted plans to process minerals locally, Reuters reported.
This marks an important shift in Nigeria's decades-old raw material export policy, as African governments move to extract more value from their solid minerals.
Segun Tomori, a spokesman for Nigeria's minister of Solid Mineral Development, said that to spur investment, Nigeria will offer incentives to investors, including duty-free imports of mining equipment, making it easier to obtain power generation licenses, allowing full repatriation of profits, and strengthening security.
"In exchange, we have to review their plans to build the plant and how they will add value to the Nigerian economy," Tomori said. But he did not say when the guidelines would be finalized or take effect.
Last week, Solid Minerals Development Minister Dele Alake said it was now government policy to make value added a condition for obtaining mining licences to create jobs and help local communities.
Alake is also the chair of an African Mining Strategy Group comprising mining ministers from Uganda, the Democratic Republic of the Congo, Sierra Leone, Somalia, South Sudan, Botswana, Zambia and Namibia. He is driving an Africa-wide effort to maximize local benefits from mineral exploration.
Nigeria, Africa's largest energy producer, has struggled to extract value from its vast mineral resources due to a lack of incentives and neglect. The underdeveloped mining industry contributes less than 1 per cent to the country's gross domestic product.
According to the Nigerian Bureau of Statistics, Nigeria mainly exported about 137.59 billion Naira ($108.34 million) of tin ore and concentrate last year, mainly to China and Malaysia.
The Nigerian government aims to drive more investment into the sector by issuing more mining licenses.
The Nigerian government has set up a state-owned solid minerals company, offering investors a 75 percent stake, and created a special security unit tasked with cracking down on illegal miners.
The Nigerian government has also tried to regulate the dominant artisanal miners by organizing them into cooperatives.
Foreign mining companies operating in Nigeria include Canada-based Thor Explorations, which is engaged in gold exploration. Chinese-owned Xiang Hui International Mining works with a local company to process gold, and Indian-owned African Natural Resources Mining, which is building a $600 million iron ore processing plant in northern Nigeria.
