KPMG
KPMG hails Nigeria, urges enlistment in global mining bodies to attract foreign direct investment
Nigeria has been advised to join relevant international mining organizations to attract Foreign Direct Investment (FDI) into its solid minerals sector.
The advice came from global audit, tax, and business advisory firm, KPMG, as the Federal Government strategised to boost the mining sector of the country.
KPMG disclosed this in its June report on Nigeria’s solid minerals sector, saying that the country, with over 44 solid minerals scattered across more than 500 locations, should be a preferred destination for multinational mining companies.
Indeed, Nigeria’s mineral wealth includes gold, barite, bentonite, limestone, coal, bitumen, iron ore, tantalite/columbite, lead/zinc, gemstones, granite, marble, gypsum, talc, lithium, nickel, and silver.
According to KPMG, “In addition to its ongoing efforts to address domestic challenges and improve the ease of doing business, the federal government should consider becoming a member of renowned international mining organizations.
“These organizations include the Committee for Mineral Reserves International Reporting Standards (CRIRSCO), the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), and the International Council of Mining and Metals (ICMM).
“Membership in these organizations would confer several benefits, such as validating the veracity of mineral deposits, promoting high standards of reporting, strengthening the social and environmental performance of the mining sector, and enhancing global trust.
“It would also help build recognition of the mining sector’s contribution to local communities and society and strengthen laws and policies for sustainable development.”
KPMG agreed that Nigeria had made recent strides in the mining sector and could maximize its potential by signalling readiness for business to the global community through certifications obtained from memberships in appropriate organizations.
It said, “Such signals could strengthen investor confidence and make Nigeria a preferred investment destination for major mining companies.”
KPMG reported that 7,182 companies and individuals were licensed to operate in the upstream subsector, including exploration, mining lease, quarrying lease, and small-scale mining licenses as at May 2024.
It, however, said the sector faces challenges like inadequate infrastructure, particularly electricity supply and access roads, and limited geoscience data and information.
Emphasizing the importance of credible geological data for attracting investors, KPMG explained that most available data are dated, which raises questions about the credibility of resource information and impacts the bankability of mining projects.
The Federal Government had introduced the Nigerian Mineral Resources Decision Support System (NMRDSS) in May 2024, a web-based application providing access to geo-scientific and geo-economic data.
Regarding this, KPMG called for a more attractive fiscal framework for investors, highlighting the need for harmonization of incentives scattered across different legislations to provide clarity to operators.
KPMG’s report emphasized the potential for Nigeria’s solid minerals sector to attract significant FDI if the country joins international mining organizations and addresses domestic challenges to create a more conducive investment environment.