News Editor
…The Chinese Connection: Unraveling Foreign Influence in Nigeria’s Mining Sector
By Steven Kefas
(Kaduna, Nigeria), In the heart of Nigeria’s capital, Abuja, stands an unassuming building that houses the Mining Cadastre Office (MCO), an agency under the Ministry of Solid Mineral Development. This office, tasked with issuing mining Titles and regulating mining activities across the nation, has recently become the center of controversy, threatening to undermine Nigeria’s efforts to diversify its economy away from crude oil.
For decades, calls to tap into Nigeria’s vast mineral wealth have echoed through the corridors of power. The country boasts an abundance of resources including lithium, nickel, gold, tin, and limestone. In recent years, Nasarawa and Southern Kaduna have emerged as hotspots for mining activities, attracting both local and international companies eager to exploit its rich mineral deposits, particularly lithium – a crucial component in modern battery technology.
However, beneath the surface of this promising sector lies a web of alleged corruption and mismanagement that threatens to derail Nigeria’s mining renaissance before it truly begins.
Issuance of Overlapping Titles
This investigation, sparked by numerous complaints from small-scale mining title holders in Nasarawa and Southern Kaduna, has uncovered a troubling pattern of irregularities in the Mining Cadastre Office’s handling of mining titles. Multiple sources, speaking on condition of anonymity due to fear of reprisal, have painted a picture of an agency in disarray, issuing overlapping mining rights and seemingly turning a blind eye to the chaos that ensues.
One CEO of a mining company, who requested anonymity, shared his frustrating experience: “The Mining Cadastre Office issued my company a title, only for them to go and issue title to another company on same land. We complained and complained, but they didn’t do anything about it.”
He added, “Not just my company, there are many others having similar cases, and all efforts to get the MCO to correct it proved abortive. I strongly believe this is a racketeering by some officials of the MCO, and the DG may not be aware of this illegality.”
This sentiment was echoed by another small-scale miner who acquired his title in 2023. He recounted a chilling encounter that forced him to suspend operations: “I came to site one morning and met another company bearing a title covering the same land I was given in 2023. I complained to the Mining Cadastre Office in Abuja, but they didn’t do anything about it.”
The miner didn’t mince words about the potential consequences of such practices: “What is happening at the MCO is illegal and is capable of scaring investors away from the mining sector. If an agency that is saddled with the responsibility of issuing titles to prospective mining investors is now found to be doing such, then the entire sector stands the risk of collapse.”
Chinese Influence
Another CEO was shocked to be told a $250,000 payment would be required to secure his tenement application for lithium in Nasarawa State. He said, “the Chinese are throwing money around the MCO people, making things hard for us. People are asking for big money, blatantly. I have never heard anything like this before’” he lamented.
Another source also claims the MCO does sell coordinates to Chinese companies who are prepared to pay high prices for lithium tenements. “These coordinates were generated by others who identified significant mineral deposits during a reconnaissance survey. When they come to MCO to check if the location is available for application, MCO officials note down and sell such coordinates information to the Chinese companies who immediately lodge an application over the area. Although the MCO cadastre system should not be able to accept an application over an existing valid title, the system is subverted and a title is issued. The illegal Chinese mining operations then begin, often with a Nigerian registered front company.” He lamented
These allegations, if proven true, strike at the heart of Nigeria’s efforts to create a stable and attractive environment for mining investment. The issuance of overlapping titles not only creates conflict among miners but also undermines the very foundation of property rights essential for any functioning market economy.
The implications of this alleged mismanagement extend far beyond the immediate conflicts it creates. Nigeria’s push for economic diversification, a strategy aimed at reducing the country’s dependence on volatile oil revenues, hinges on the development of sectors like solid minerals. The lithium deposits in Nasarawa and Southern Kaduna, for instance, represent a potential new industry for Nigeria in the global push for renewable energy and electric vehicles.
However, the current state of affairs threatens to squander this opportunity. International investors, already wary of the complexities of doing business in Nigeria, may be further discouraged by the apparent lack of reliable mining titles. This could lead to a scenario where Nigeria’s mineral wealth remains largely untapped, depriving the country of much-needed revenue and job opportunities or, as has happened in other African nations, in the hands of Chinese companies intent on carting away Nigeria’s mineral wealth at the cheapest possible prices.
Arbitrary Increase in Mining Rates and Fees
Recent developments have further complicated the already turbulent landscape of Nigeria’s mining sector. On July 4, 2024, the Federal Ministry of Solid Minerals Development announced a significant increase in mining rates and fees, ostensibly to boost sector reforms and increase revenue. However, this move has raised serious concerns about its legality and potential impact on the industry.
Under the new regime, the cost of a Mining Lease license has skyrocketed to N3 million, while other fees have seen similar dramatic increases. For instance, Small Scale Mining Lease (SSML) applicants now face a fee of N300,000 for the first two cadastral units, up from previous rates. The government argues that these changes aim to discourage speculation and address funding shortages.
However, the timing of these increases, amidst allegations of corruption and mismanagement at the Mining Cadastre Office, has left many in the industry skeptical. One industry expert, speaking on condition of anonymity, stated, “While we understand the need for increased revenue, these arbitrary increases without proper consultation or legislative approval seem like an attempt to legitimize the already existing unofficial payments. It’s adding insult to injury for legitimate miners struggling with overlapping titles and other irregularities.”
The new rates also disproportionately affect smaller, local mining operations, potentially pushing them out of the market in favor of larger, often Chinese-owned companies. This raises concerns about the future of Nigeria’s mining industry and who will ultimately benefit from the country’s vast mineral wealth.
Moreover, the alleged irregularities at the MCO raise serious questions about governance and transparency in Nigeria’s mining sector. If lower-level officials can indeed engage in “racketeering” without the knowledge of the Director-General, as suggested by one of our sources, it points to a worrying lack of oversight and accountability within the agency.
Attempts to get the MCO’s side of the story have so far been unsuccessful. An inquiry email sent to the office seeking confirmation or denial of these allegations remains unanswered at the time of publication. This silence only adds to the cloud of suspicion surrounding the agency’s operations.
As Nigeria stands at a crossroads, seeking to build a more diversified and resilient economy, the integrity of institutions like the Mining Cadastre Office is paramount. The integrity of the titles issued by the MCO is the very foundation of the future of Nigeria’s mining sector. The allegations uncovered in this investigation, if left unaddressed, threaten not just the mining sector but the broader narrative of Nigeria as a viable destination for investment.
The ball is now in the court of the Ministry of Solid Mineral Development and, indeed, the federal government. Will they take decisive action to investigate these allegations and restore confidence in the mining cadastre system? Or will they allow this promising sector to be undermined by corruption and mismanagement?
As one of our sources poignantly stated, the entire sector stands at risk of collapse. The time for action is now. Nigeria’s economic future may well depend on it.
Steven Kefas is a Citizen Journalist with interests in public accountability, security and conflicts…….
