Africa’s largest producer of oil Nigeria is looking to spend 15-billion naira ($42million) over the next year to explore for minerals and attract investors into mining as it seeks to reduce its reliance on oil, Solid Minerals Development Minister, Kayode Fayemi has said.
“Because we are starting from a low base, we want to have a portfolio of exploration activities in place that could whet the appetite of the average investor who wants to come in,” Mr. Fayemi said.
According to the Minister, once the appropriate feasibilities are conducted, they will be able to “drill down when they have that baseline information.”
The move is part of the government’s plans to support investments in the exploration of its priority minerals including gold, bitumen, iron, barite, limestone, lead and zinc, which is expected to rake in around 60-billion naira of private investment into mining, he said.
Exploring resources other than oil, Nigeria’s main export, is part of Muhammadu Buhari’s government economic recovery and growth plan after the country went through its worst economic slump in 25 years as oil output and prices plummeted.
The contribution of solid minerals to gross domestic product is expected to increase to more than 8 percent by 2020 from less than 1 percent a year, according to the government.
To further encourage investors, incentives including tax holidays of as much as five years for new companies entering the duty-freety free imports on mining equipment and mining licences for 25 years have been put in place, the minister said.
Additional support for the industry is expected through a $600-million bond to be sold by the end of the year to raise more funds to provide required infrastructure and help accumulate data on minerals, according to Haiha Fatima Shinkafi, Executive Secretary of the Solid Minerals Development Fund.
“Nigeria is one of the lowest spenders on exploration as far as mining activity is concerned. This government is determined to turn the tide on that, because we’re quite convinced of the opportunities,” Mr. Fayemi added.
Nigeria has at least 44 minerals that can be extracted in commercial quantities, according to the solid minerals ministry. Mining in the country is currently dominated by artisans, who produce gold, tin and others in small amounts