The Nigerian government has announced that it will require companies seeking new mining licences to provide a detailed plan for local mineral processing.
The move aims to ensure that the country maximises the benefits of its mineral resources.
The minister of solid minerals development, Dele Alake, said the new policy requires value addition as a condition for obtaining licences, to generate employment opportunities and support local communities.
The timing of when the guidelines will be finalised or come into effect was not disclosed.
Alake, who also leads an African mining strategy group consisting of mining ministers from Uganda, the Democratic Republic of Congo, Sierra Leone, Somalia, South Sudan, Botswana, Zambia, and Namibia, is advocating for a collective endeavour across the continent to ensure that local communities reap the greatest possible rewards from mineral exploration.
Nigeria's spokesperson for the minister of solid minerals development Segun Tomori said the country plans to provide incentives for investors, such as tax waivers for importing mining equipment, simplified procedures for obtaining electricity generation licences, the ability to fully repatriate profits, and enhanced security measures.
"In exchange, we have to review their plans for setting up a plant and how they would add value to the Nigerian economy," Tomori was quoted as saying by Reuters.
Nigeria, a leading energy producer in Africa, has faced challenges in maximising the potential of its abundant mineral resources.
This has been primarily attributed to inadequate incentives and a lack of attention.
The mining sector in the country is severely underdeveloped, making a meagre contribution of less than 1% to the gross domestic product.
According to the country's statistics bureau, Nigeria exported tin ore and concentrates worth about 137.59 billion naira ($108.34 million) last year, with China and Malaysia being the main destinations.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
