The Miners Association of Nigeria (MAN) has stated that the federal government’s hike in mining rates and royalties for solid minerals will push local miners out of business.
The Group stated this through its National President, Dele Ayankele in its reaction to the increase as reported by the News Agency of Nigeria (NAN).
He stated that stakeholders were dissatisfied with the rates. Ayanleke pointed out that the announcement process was conducted without consultation and highlighted concerns about the sector’s overall condition, particularly the multiple taxation of operators by state governments.
He urged the Federal Government to collaborate with state governments to address the widespread illegality in the sector’s regulatory and governance framework, which is frustrating mining operators.
According to him, once the situation is resolved, stakeholders should be involved in determining the best ways to optimize revenue generation and harness the sector’s wealth creation potential.
He said, “To say the new rates are high is an understatement; it is unrealistic. In a situation where state governments keep on issuing unconstitutional regulations with attendant rates and charges with impunity and the Federal Government, through the Ministry, could not assert its authority on a subject located in the exclusive list.”
“Outrageous upward review of rates and charges can only be interpreted that the government wants Indigenous operators out of mining business,”
Increase in rates and charges without consultation
Similarly, the President of the Nigerian Mining and Geosciences Society (NMGS), Prof. Akinade Olatunji, expressed that the issue was not with the review itself but with the process leading to it. He mentioned that the ministry had determined the fixed rates based on the current selling prices of minerals.
Olatunji noted that this decision was made unilaterally without sufficient consultation with relevant stakeholders. He explained that various factors govern royalty rates and pointed out that operators were already struggling with high costs due to prevailing economic challenges, which could drive many out of business.
He suggested that the government should strengthen the Mines Inspectorate Division with more qualified personnel, provide them with mobility and running costs, and allow them to perform their duties effectively.
Backstory
Nairametrics earlier reported that on July 5, the Minister of Solid Minerals Development, Dr. Dele Alake, announced an upward review of rates and charges for all activities in the mining sector. He explained that this move aimed to position the sector for economic consolidation and was driven by the introduction of qualitative measures.
- Dr. Alake expressed concerns about non-remittance by some operators, noting that while mining operators are generating substantial profits, they have failed to remit these earnings to the Federal Government.
- The new rates include increases in mining lease licenses and royalty rates for minerals, particularly lithium, kunzite, and gold.