(Ecofin Agency) - Despite a total estimated value of $700 billion for all solid minerals in the Nigerian subsoil, the mining sector contributes a mere 0.45% to the country's GDP, and its economy remains largely dependent on the price of crude oil on the international market.

Nigeria has announced that it will only issue new mining permits to companies that present a plan for local ore processing. This initiative is part of new guidelines currently being developed, as stated by Segun Tomori, the spokesperson for Nigeria's Minister of Solid Minerals, on Thursday, March 28, 2024.

The country is set to offer investors a range of incentives, including tax exemptions on the import of mining equipment, streamlined processes for obtaining electricity production licenses, permission for the total repatriation of profits, and enhanced security measures.  "In exchange, we have to review their plans for setting up a plant and how they would add value to the Nigerian economy," Tomori explained, without specifying when these new measures will take effect.

Nigeria is home to 44 solid minerals spread across more than 500 identified sites. These include gold, iron ore, coal, tin, zinc, nickel, and lithium, with iron ore reserves alone estimated at 2 billion tons. Moreover, coal resources are believed to run into several billion tons, while minerals like gold and tin are also present in significant quantities.

Despite the solid mineral resources' vast estimated value of $700 billion in Africa's most populous country, the sector accounted for only 0.45% of the GDP in 2020, according to the Extractive Industries Transparency Initiative (EITI).

As part of its strategy to increase the mining sector's contribution to the economy, the Nigerian government plans to issue new mining licenses and offer investors at least a 75% stake in the Nigerian Solid Minerals Corp. This company is tasked with tapping into the country's immense mining potential. A special security unit has also been established to combat illegal mining activities, while efforts are underway to regulate artisanal miners by organizing them into cooperatives.