481 govt. licensed mining firms paid royalties in 2015 – NEITI

Kayode Fayemi
Minister of Mines/Steel, Kayode Fayemi [Photo: ekitistate.gov.ng]

Only 481 companies operating under government approved mining or quarrying licences paid royalties in 2015, the latest independent audit report of the Nigeria Extractive Industries Transparency Initiative, NEITI, shows.

Of the 481 companies, only 42 met the N3 million and above materiality threshold and accounted for over 87 per cent of the total royalty paid during the year.

The report released on Sunday in Abuja contained details by the Mines Inspectorate Department, MID, of the Federal Ministry of Mines and Steel Development, showing that Nigeria earned about N69.2 billion from the solid minerals sector in 2015.

The report by the National Stakeholders Working Group, which is the board of NEITI, showed that the revenue earnings increased by about 24 per cent, from about N55.8 billion realised from the sector in 2014.

The audit report also showed that the total production of solid minerals in the country stood at about 39.27 million tons, representing a reduction of about 17 per cent, from about 47.1 million tons produced in 2014.

The drop in 2015’s production figure, the report noted, was as a result of the insecurity in parts of the country where deposits of these minerals are found.

The other reason was the more stringent approval process for explosives used in mining.

Regardless, the report noted that while mineral production reduced, government revenues rose during the same year due to the growth in taxes collected from the sector and the review of royalty rates paid by companies, which came into effect within the year under review.

NEITI’s previous solid minerals audit reports had recommended upward review of Nigeria’s royalty rates to align with prevailing industry and present day realities.

The report also disclosed that the value of solid minerals exports in 2015 stood at $9.733 million, which was 1.45 per cent of non-oil exports for the year.

Lead and zinc topped the chart with 79 per cent valued at $7.7 million, while 175 ounces of gold valued at only $122,000 were exported during the period.

Besides, the report showed that the solid minerals sector contributed 0.12 per cent to Nigeria’s Gross Domestic Product, GDP, in 2015, a marginal increase of 0.01 per cent on the 0.11 per cent contribution of the sector to GDP in 2014.

NEITI’s Executive Secretary, Waziri Adio, said the report showed that the contribution of the solid minerals sector to government revenues and macro-economic indicators was beginning to improve, even if marginally.

“The sector could definitely contribute more to revenues, job and wealth creation, exports, imports substitution, industrial development and overall national growth”, Mr. Adio said.

“But there is a sign of progress already. What we need to do is to build on, deepen and sustain this early promise, to ensure that the country returns to being a major mining destination and maximises the abundant opportunities offered by the sector.”

“Faithful and sustained implementation of the roadmap developed by the Ministry of Mines and Steel Development and of the recommendations in this report will be necessary,” he added.

Highlights of the report showed specific contributions by companies and states to the sector’S revenue growth and development.

A review of the country’s sector showed that most of the selected companies operate mainly in the manufacturing and construction sectors of the economy.

“Cement manufacturing companies were the major revenue contributors to the sector, accounting for over 60 per cent, while construction companies and real mining companies contributed about 31 per cent and eight percent respectively.”

For instance, Ogun, Kogi and Cross River states and the FCT accounted for about 70 per cent of the production volumes in 2015, with Ogun State topping with 36 per cent.

The report revealed that a total of 4,305 mineral titles were valid in 2015, out of which 204 were mining leases, 657 for small scale mining, 1,865 for quarrying licences and 1,579 exploration licences.

Of the 4,305 mining titles, a total of 1,220 were issued in 2015 alone.

The NEITI Executive Secretary who disclosed that the NEITI 2015 Oil and Gas report would be released next month, said the Board was determined to ensure its reports were timely.

“Resources and processes permitting, NEITI plans to clear the backlog of reports by the middle of 2018. Our goal is not just to make our reports more timely, but also to make them as real-time as possible, to enhance their utility and relevance”, Mr. Adio said.

He said the procurement process of the 2016 reports were being finalised, while the procurement for the 2017 reports would soon commence.


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