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 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/licence-Certificate of entry into mining
• -Prospecting license 1 year renewals
• Alluvial-Mas. Of 2
• Bassalt- Max. of 4
• Lode-Mas. Of 5
• Exclusive prospecting Renewals exceeding 20.72
• Same as above. Duration of 1-5 Right/license (for areas p 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 or 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 Renewals depending on remaining reserves
• Special mining lease for an area lager 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: Bassalt:-

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 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.