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Energy_Mining_Newsletter_July09 (2)

Energy_Mining_Newsletter_July09 (2)

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Published by Blackfriars LLP

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Published by: Blackfriars LLP on Mar 27, 2011
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03/27/2011

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WWW.BLACKFRIARS-LAW.COM
 
©Blackfriars LLP 2010. All rights reserved. This document is for general guidance only. Definitive adviceshould be sought from counsel if required. Blackfriars LLP, The Penthouse Floor, Itiku House, 28-30Macarthy Street, Lagos. Tel: +234 1 739 0397; +234 1 736 9797; +234 1 736 9795; Fax: +1 646 536 8978.http: www.blackfriars-law.com Email: info@blackfriars-law.com
NIGERIAN MINING INDUSTRY:OPPORTUNITIES FOR FOREIGNINVESTORS
July 2009 Vol. 22: Issue 7
Nigeria is endowed with numerousmineral resources such as talc,
 
iron ore,bitumen, gold, rock salt, gypsum,lead/zinc, coal, gemstones, kaolin,tantalite, bentonite and baryte located indifferent parts of the country incommercial quantity
.
The ownership of the mineralresources is vested in the FederalGovernment of Nigeria as custodian onbehalf of the citizens of the country. TheNigerian government has recognizedthat the successful exploration andexploitation of its mineral resourcesrequires both technical expertise andfinancial strength to a large extent canbe provided by foreign investors.The government grants mineral titlesto allow suitable investors to explorefor, mine and market mineral resources.Thus the role of the government hastransformed from that of ‘owner-operator’ to ‘administrator-regulator’.Applications for mineral titles andlicenses are considered on a first –come,first-served basis and may be made byany investor, at any time, over any areanot covered by an existing title or nototherwise reserved by the government.An investor may enter into themining industry in Nigeria through theacquisition of an existing miningproperty from the original ownerhowever an approval must be obtainedfrom the Ministry of Solid MineralsDevelopment for such acquisition or byobtaining an application either for aProspecting Right (PR), an ExclusiveProspecting Licence (EPL), or a SpecialExclusive Prospecting Licence (SEPL).The application shall state the financialand technical capability qualifying theapplicant for an entry into the miningsector.In order to encourage foreigninvestment in the mining industry thegovernment has put in place incentivessuch as grant of a three-year tax holidayto new mining companies which may beextended for one further period of twoyears. Mining operators are grantedexemption from payment of customsand import duties in respect of plant,machinery, equipment and accessoriesimported specifically and exclusively formining operations
.
In addition, every holder of amineral title is guaranteed freetransferability of funds through theCentral Bank of Nigeria and alsopermission to retain a portion of theirforeign exchange in a foreign exchangedomiciliary account for use in acquiringspare parts and other inputs requiredfor the mining operation which would

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