Incentives and Strategies for Investment in Solid Minerals

Incentives and Strategies for Investment in Solid Minerals

Investment Incentives:

- 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.

HOW TO OBTAIN A MINING LEASE IN NIGERIA

There are two options available to a company or an individual to enter into 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 an application, either a Prospecting Right (PR), an Exclusive Prospecting License (EPL), or a Special Exclusive Prospecting License (SEPL), the application should state financial and technical capability qualifying the applicant for entry into the mining sector.

PERMIT REQUIREMENTS DURATION
Entry permits into the mining sector
-Statement of financial capability
-Statement of technical capability
-Proof of statutory existence of company Life
Prospecting Right/License -Certificate of entry into mining
-Prospecting License 1 Year renewals
Alluvial-Max. Of 2
Bassalt-Max. Of 4
Lode-Max. Of 5
Exclusive prospecting Renewals exceeding 20.72)
-Same as above. Duration of 1- 5 Right/License (for areas up Years Depending on Reserves
Mining Lease (gives right to mine specified land area of 80 hectares)
-Possession of a Prospecting Right, Exclusive Prospecting License or Special Exclusive Prospecting License.
-Submission of a plan of the prospecting done, a schedule of the mineral value found and a statement of ore reserves.
-Submission of an environmental impact assessment and production plan. Not exceeding 21 years Renewal depending on remaining reserves
Special mining lease for an area larger than 80 hectares
- Same as above. Metallic minerals not More than 21 years.
More than 21 years.
not exceeding 70 years. Renewals at Minister’s discretion, for not more than 21 years.

Entry into the mining Industry
- Statement of financial capability
- Statement of technical competence
- Proof of statutory existence of company.
- Evidence of tax clearance
- Payment of prescribed fee

Prospecting Right (P.R.) - Certificate of entry into the mining industry.
- Payment of prescribed fee 1 year (Renewable annually)
Exclusive Prospecting (E.P.L.)
(for areas up to, but not exceeding 20.72km2) - Certificate of entry into the mining Industry
- Extant Prospecting Right (P.R.)
- Payment of prescribed fee 1 year renewable for:
Alluvial Deposits- maximum of 2
renewals: Basslt:-
Max. Of 4 renewals Max. Of 5 renewals
Special Exclusive Prospecting License (S.E.P.L.)
(For areas greater than 20. 72km2 & of difficult terrain Mining Lease (M.L.) - Certificate of entry into Mining Industry
- Extant Prospecting Right (P.R.)
- Payment of prescribed fee
- Certificate of entry into mining Industry
- Extant Prospecting Right (P.R.)
- EPL or SEPL
- Prospecting plant of the area showing Ore reserve estimates.
- Payment of prescribed fee. 1-5 Years.
Up to 21 years, renewable depending on remaining on reserve
Special Mining Lease (SML)
(for areas greater than that of ML. With difficult terrain and large capital out-lay). - Certificate of entry into mining Industry.
- Extant prospecting Right (PR)
- EPL and SEPL
- Prospecting plan of the area showing on reserve estimates
- Payment of prescribed fee. Up to 21 years renewable depending on the remaining on reserve.