INDUSTRY REPORTS

All You Need To Know About NEITI’s 2015 Solid Minerals Audit Report

The 2015 Nigeria Extractive Industries Transparency Initiative (NEITI) solid minerals audit scope covered reconciliation of actual payments by companies and receipts by government agencies in the sector in 2015.

Only companies operating under a mining or quarrying license which made royalty payments of N3 million and above were considered for the reconciliation.

The captured companies represented 87percent of total royalty payments in 2015.

Although, a total of 481 companies made royalty payments in 2015, 42 accounted for 87percent of the Royalty payment above the N3million materiality threshold.

The main activities was in manufacturing (cement production, e.g. Dangote, WAPCO) or construction (such as Julius Berger, Dantata & Sawoe, CCECC, and Triacta).

A total of 4,305 mineral titles were valid in 2015 which comprised of 204 MLs, 657 SSMLs, 1,865 QLs and 1579 ELs. Of this total, 1,230 new titles were issued in 2015.

Despite valid licenses on Gold, Copper, Iron, Gemstones etc, revenue contributions from such minerals remain insignificant.

Total revenues earned by government from the sector in 2015 amounted to N69.2 billion, an increase of 24percent on the N55.8 billion earned in 2014.

The 2015 total mineral production was 39.27 million tons, 17percent lower than 47.1 million tons produced in 2014.

The value of exports of solid minerals in 2015 was $9.733 million out of which Lead/Zinc accounted for about 79.62percent with FOB value of $7.749 million.

The year recorded an export of 175 Ounces of Gold concentrate at the value of $122,500.

The sector contributed 0.12percent to the national GDP in 2015 a marginal increase of 0.01% on the 0.11% contribution in 2014.

The sector accounted for 1.45percent of the total non-oil exports value (FOB) in 2015 valued at $672,523,202.

Cement manufacturing companies were the major revenue contributors to the sector with 60.20percent followed by construction companies with 31.44percent, others 8.36percent

Ogun, Kogi and Cross River and the Federal Capital Territory (FCT) accounted for about 70percent of the production. Ogun state topped production and contributed the highest revenue accounting for 32.81percent of the total.

The report recommended the speedy release of the N30 billion solid minerals development fund recently approved by the Federal Executive Council to the intended beneficiaries in order to support some of the activities stipulated in the Roadmap for the sector, sustain the growth and further enhance the capacity of the sector.

It called for the improvement of the economic value of Nigeria’s minerals across the value chain before export in order to maximize their potentials.

It recommended a ban on the importation of some minerals like gypsum, barite and kaolin which Nigeria has in good quality and quantity.

It recommended the re-introduction of mines police to reduce the activities of illegal miners.

It recommended capacity building for states’ mines officers so they can effectively verify production figures and accurately calculate royalty payments

It underscored the need for synergy between relevant government agencies to ensure that all minerals export including samples have permits duly issued by the Mining Inspectorate Department.

It called for urgent measures against multiple taxation in the sector in line with Ease of Doing Business policy.

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