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Lithium mining is a growing industry in Nigeria, and the government has recently issued permits to allow companies to begin mining operations. The Nigerian government has identified lithium as a strategic mineral and is keen to develop the industry in order to benefit from its potential economic benefits.
Exploration for Lithium in Nigeria
Exploration for lithium in Nigeria is still in the early stages. The Nigerian Geological Survey Agency (NGSA) is the government agency responsible for mineral exploration and mapping in the country. The NGSA has conducted several surveys in the Jos Plateau and has identified areas that are likely to contain lithium.
In 2018, a Nigerian mining company, Kian Smith Trade & Co, announced that it had discovered lithium in commercial quantities in the country. The company stated that it had found 15,000 tonnes of lithium ore in the central part of Nigeria. This discovery has raised interest in lithium exploration in Nigeria and has attracted the attention of international mining companies.
Types of Permits/Licenses for Lithium in Nigeria
Mining Permit: The Nigerian government has issued Small Scale Mining Leases to a few companies to begin lithium mining operations in the country. These permits are issued by the Ministry of Mines and Steel Development and are valid for a period of five years. The permits allow companies to explore and develop lithium deposits, as well as to extract and process the mineral.
Possess & Purchase License: Possess & Purchase License is issued to companies that are not willing to commence the mining process immediately, but rather purchase from mining companies, either for processing or immediate export. The Possess & Purchase License is also issued by the Ministry of Mines Steel Development. It is renewable annually. Some of the key requirements to obtain this license include CAC Incorporation Documents; a Tax Clearance Certificate; an Attestation of Non-conviction from a Legal Practitioner; a Bank Reference Letter; Consent of a Mining Permit Holder among others.
Mineral Buying Center: Mineral Buying Centre License is also similar to that of Possess & Purchase License, save for it includes additional requirements such as Warehouse and Environmental Impact Assessment Report. The License permits a company to buy and store lithium in a particular location.
Mineral EXport Permit: The mineral Export Permit is in favour of a company ready to export minerals out of Nigeria. For a company to be eligible for this permit, such a company must have lithium that has been acquired or prepared for export and royalties must have been paid to the government on such minerals. The Export Permit is issued only on available minerals and it is issued by the same Ministry of Mines and Steel Development. A mineral Export Permit is a key requirement to export lithium out of Nigeria.
The Nigerian government has also in place a number of regulations to ensure that the mining operations are conducted in a safe and responsible manner. These regulations include environmental protection measures, such as the requirement for companies to conduct environmental impact assessments before beginning operations. Companies must also adhere to safety standards and must ensure that their operations do not cause any harm to the environment or local communities.
In addition, the Nigerian government has also put in place a number of incentives to encourage companies to invest in the lithium mining industry. These incentives include tax breaks and other forms of support.
It is important to further emphasis that any foreign company seeking to engage in mining or buying of lithium or other mineral resources in Nigeria must first incorporate a local company in Nigeria. Under the Nigerian company law, every foreigner seeking to engage in business activities in Nigeria must incorporate a local entity; a foreign company is prohibited from engaging in any business activities in Nigeria without registering locally.
Conclusion
Finally, the Nigerian government is committed to developing the lithium mining industry in the country and is keen to ensure that the industry is conducted in a safe and responsible manner. The issuance of permits to companies to begin mining operations or trading of lithium is an important step in this process and is likely to lead to increased investment in the industry.
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AUTHOR(S)
Olusola John Jegede
Resolution Law Firm
