Energy Law

The Mineral Titles In Nigeria

To be a participant in the mineral sector, one has to obtain a mineral title that is a licence or a permit. According to the Minerals and Mining Act, one of the following mineral titles is necessary to search for or exploit mineral resources. It is illegal to engage in any of these activities without the necessary mineral title or authorization.

The mineral titles required are: 

  1. Reconnaissance Permit 
  2. Exploration License 
  3. Small Scale Mining Lease 
  4. Mining Lease 
  5. Quarry Lease 
  6. Water Use Permit

 RECONNAISSANCE PERMIT

Reconnaissance Permit grants the holder the right to obtain access into, enter on or fly over any land within the territory of Nigeria available for mining purposes to search for Mineral Resources on a non-exclusive basis.  It also confers on the holder the right to obtain and remove surface samples in small quantities the process of which must be carried out in a socially and environmentally responsible manner. It is a non-exclusive permit that allows the holder to search for mineral resources.

This permit is not transferable and is issued for only one year. However, it can be renewed annually.

EXPLORATION LICENSE

The license is awarded to incorporated companies, mining co-operatives, and holders of RP in respect of a mining area. This has a duration of 3 years, renewable for 2 further periods of 2 years each (i.e., it shall not exceed 7 years). It confers on the holder the right to explore [discover, determine the characteristics and evaluate the economic value of mineral resources] on an exclusive basis for all mineral resources within the title area (established zone only).

The mining activity is restricted to specified minerals. The holder is permitted to remove, conduct bulk sampling and testing, export, and sell mineral resources not exceeding established limits, and the mining area do not exceed 200sq km consisting of one contiguous polygonal area.22

SMALL-SCALE MINING LEASE

This License is granted in respect of an area not more than 5 acres and shall not exceed 3 square kilometers for an initial period of 5 years, renewable for another 5 years.  Other conditions applicable to Small Scale Mining Lease shall be as determined by the Small Scale and Artisanal Mining Department of the Ministry of Solid Mineral Development and requires its holders to carry out effective rehabilitation of the mined-out areas to the satisfaction of the MECD and pay prescribed fees

If the level of activities of a small-scale mining license holder exceeds the defined area, such holder is expected to convert the lease to a mining lease by submitting a written application to the MCO.

MINING LEASE

This Lease will not be granted in respect of any area within an Exploration License Area or Small-Scale Mining Lease except to the holder of the Exploration License or Small-Scale Mining License.  The duration of a mining lease is twenty-five (25) years and is renewable every twenty-four (24) years subject to the holder complying with his minimum work obligations and commitments.  A mining lease confers on the holder [among other rights] the right to obtain access and enter the Mining Lease Area, the exclusive use, occupation, and the carrying out of mineral exploration within the Mining Lease Area.

QUARRY LEASE

A quarry lease is granted for the quarrying of all quarriable minerals such as asbestos, clay, gypsum, marble, limestone, sand, stone, and gravel as may be specified in the lease. The quarry lease is granted in respect of an area not exceeding 5 square kilometers for a period of 5 years, which may be renewed for further terms of 5 years each, and there is no limitation to the number of renewals provided that the application for renewal is made months before the lease expires.

WATER USE PERMIT

This is a right granted to a mining title that requires the use of water for their mining exploration and exploitation activities. The permit is granted for the same period for which the relevant mining title is granted.