Requirements for Permit to Export Minerals for Commercial Purposes

Nigeria's solid minerals sector holds massive potential, with mineral exports valued at over $400 million annually, contributing significantly to the nation's economy. However, the process of obtaining a permit to export minerals for commercial purposes can be complex and regulated under strict laws, particularly Regulation 131. Want to know the exact steps, costs, and common pitfalls to avoid? Dive into our comprehensive guide that breaks it all down and ensures your business complies with every requirement!
Requirements for Permit to Export Minerals

The export of minerals is a key aspect of Nigeria’s mining and solid minerals industry. Companies interested in exporting minerals for commercial purposes must meet specific regulatory requirements.

This article provides a comprehensive guide to obtaining a permit to export minerals for commercial purposes in Nigeria.

What Is a Permit to Export Minerals for Commercial Purposes?

A Permit to Export Minerals for Commercial Purposes is a legal authorisation issued by the Ministry of Mines and Steel Development, allowing a company to export minerals from Nigeria.

Without this permit, companies cannot legally engage in the international sale of minerals.

Regulatory Framework: Regulation 131

Regulation 131 of the Nigerian Minerals and Mining Act (NMMA) stipulates the requirements and process for obtaining a permit to export minerals.

This regulation ensures that only qualified companies, operating under the law, engage in mineral exportation, which helps to control the exploitation of Nigeria’s mineral resources and ensure proper documentation and payment of royalties.

Key Steps to Obtain a Permit to Export Minerals

Step 1: Apply to the Director, Mines Inspectorate Department

The application for the permit must be addressed to the Director, Mines Inspectorate Department, Ministry of Mines and Steel Development, located at No. 2 Luanda Crescent, Wuse II, Abuja.

The application should clearly state the type(s) of mineral(s) to be exported and the country to which the minerals are being exported.

Step 2: Prepare Required Documentation

The following documents must be attached to the application:

  1. Certificate of Incorporation: You must provide a certified copy of your company’s Certificate of Incorporation, along with CAC Forms 2 and 7 or 1.1, which detail the company’s shareholding and directors.
  2. Three Years Tax Clearance Certificate: A valid tax clearance certificate for the past three years must be included.
  3. Evidence of Registration with the Nigerian Export Promotion Council (NEPC): The NEPC is responsible for promoting non-oil exports in Nigeria. Registration with this agency is mandatory for any company intending to export minerals.
  4. Evidence of Source of Supply: This includes either the mineral title (such as a Small Scale Mining Lease, Mining Lease, or Quarry Lease) or a License to Purchase and Possess Minerals. A reconnaissance permit or exploration license is not acceptable.
  5. Payment of Royalties: Royalties must be paid on the minerals to be exported. Evidence of this payment is required. The royalties should be paid to the government of the state where the minerals are mined.
  6. Reason for Exportation: You must state your reason for exportation. This could be part of a contractual agreement with a foreign buyer, in which case, attach the contract to the application.
  7. Processing Fee: A non-refundable processing fee of ₦50,000 must be paid.
  8. Inspection Report: An inspection report from the Zonal or Federal Mines Officer of the state where the minerals are domiciled is required.

Note:

The evidence of the source of supply should be an extant mineral title and not a reconnaissance permit or exploration license. Only leases such as a Small Scale Mining Lease, Mining Lease, or Quarry Lease are accepted.

Step 3: Submit Application

Once all the required documents are compiled, you must submit the application in person or through a legal representative to the Mines Inspectorate Department in Abuja.

Step 4: Await Review and Inspection

The application will be reviewed by the Mines Inspectorate Department. This includes verifying the documents, the source of minerals, and the payment of royalties. The Zonal or Federal Mines Officer will conduct an inspection to confirm the details provided in the application.

Step 5: Receive Permit

Upon successful review and inspection, the Director of Mines Inspectorate Department will issue the permit to export minerals for commercial purposes.

Costs Involved

Mineral Export License Requirements and Costs in Nigeria
Requirement Cost
Processing Fee ₦200,000
Inspection Fee Varies by location
Tax Clearance (3 years) Depends on company revenue
NEPC Registration Fee ₦50,000-150,000
Royalties on Minerals Varies by mineral type and location
Legal and Administrative Fees Varies by service provider

Common Misconceptions about Exporting Minerals

  1. Misconception: Exploration Licenses are Sufficient for Export
    Fact: Only companies with an extant mineral title, such as a Small Scale Mining Lease, Mining Lease, or Quarry Lease, can apply for an export permit. Exploration licenses and reconnaissance permits are not valid for export purposes.
  2. Misconception: You Do not Need to Pay Royalties if the Minerals Are Exported
    Fact: Royalties must be paid on all minerals exported from Nigeria, and failure to do so could lead to legal penalties.
  3. Misconception: Any Company Can Apply for the Permit
    Fact: Only companies that meet the requirements, including tax compliance and NEPC registration, can apply. The process is strictly regulated.
  4. Misconception: Once the Permit Is Obtained, It is Valid Indefinitely
    Fact: The export permit is subject to renewal, and specific conditions must be met to maintain its validity.

Frequently Asked Questions (FAQs)

1. What is the duration of the permit to export minerals?

The permit is usually valid for a specific period and subject to renewal depending on the terms set by the Ministry of Mines and Steel Development.

2. Can an individual apply for a permit to export minerals?

No. Only companies registered with the Corporate Affairs Commission (CAC) can apply for the permit. Additionally, the company must be registered with the NEPC.

3. What minerals require a permit for export?

A wide range of minerals, including precious stones, metallic minerals, and industrial minerals, require a permit for export. This includes minerals like gold, limestone, lead, and zinc.

4. What are the penalties for exporting minerals without a permit?

Exporting minerals without a permit is illegal and can result in hefty fines, imprisonment, and the confiscation of the minerals.

5. How long does it take to process the permit?

Processing time varies depending on the completeness of the application and the inspection process, but it typically takes several weeks.

6. Are there exemptions to the royalty payment?

No. All minerals extracted and exported from Nigeria are subject to royalty payments, regardless of the nature of the extraction process.

Conclusion

Securing a permit to export minerals for commercial purposes in Nigeria is a well-structured process that involves regulatory compliance and the provision of several essential documents.

By following the steps outlined above, you can successfully obtain the permit, ensuring that your business operates within the legal framework of Nigeria’s mining industry.

Whether you are a new entrant or an established player, complying with the requirements will facilitate a smooth export process, contributing to the growth of your business and Nigeria’s mineral export market.

Want to Speak with a Consultant?

Start a One-on-One Conversation With One of Our Senior Corporate/Litigation Law Experts.
Share this article

Related Posts

What You Need to Know About Registering a Drug or Pharmaceutical Product with NAFDAC

How Real Estate Developers Can Expand Their Portfolio by Partnering with Landowners for Development Projects: Title Ownership and Rights Explained

How to Effectively Package a Bid for Government Contract in Nigeria (Technical/Financial)

Before you Leave!

Do You Want to Speak with a Senior Corporate Law or Litigation Expert?

OR