Miners Just Got Three Years Of Tax-Free Profits In Nigeria by Dave Forest
Governments are starting to take drastic action in helping the beaten-down mining sector. With Polish lawmakers announcing this week they may give tax breaks to state copper miner KGHM — and calls growing stronger in Chilean political circles for the government to help recapitalize national copper producer Codelco.
And that kind of government goodwill was very good this past week for all miners in one particular nation.
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The west African resource powerhouse Nigeria.
Nigeria’s politicians have been pushing hard lately to jumpstart the nation’s minerals sector. Aiming to use increased investment in this industry to shore up flagging funds from the beleaguered oil and gas business.
And last Thursday the Nigerian government took its most concrete step yet in supporting minerals activity. Saying it will grant a three-year tax holiday to all incoming investors in the country’s mining sector.
The revelation came during a presentation by Mines and Steel Development Minister Kayode Fayemi at a meeting for potential investors in Perth, Australia. Where the Minister told attendees that new mines will get tax-free treatment for 36 months from the date they commence operations.
The Minister also unveiled a raft of other measures designed to support mining. Including allowing 100% foreign ownership of mining projects — and an exemption from import duties on mining equipment.
Importantly, the government is also pledging to increase security around mining areas — a key consideration, given the unrest that has plagued the country’s delta oil-producing region.
What does this all mean for mining investors? Potentially several things.
Nigeria does have noted potential for a number of metals. There is small-scale gold production here — and the nation isn’t far from the prolific gold fields of Ghana and Burkina Faso. Lead-zinc and iron ore are also produced at a number of Nigerian mines.
Interestingly, Minister Fayemi also revealed this past week that nickel has been newly discovered in Nigeria’s northern Kaduna State. Adding a potential new dimension to exploration and development here — especially if these new showings turn out to be associated with platinum group elements.
All of which makes Nigeria a spot to be tracking for new projects. Watch for more announcements from the government in finalizing the new minerals regime — and for specific projects being signed up by developers globally.
Here’s to keeping promises,