Mining in Nigeria: the Minerals and Mining Act, the Mining Cadastre Office, titles, environment and incentives

A company wants to mine tin on a plateau. Before it digs, it needs a title from the Mining Cadastre Office, a land arrangement that may force the Governor to revoke a villager’s right of occupancy, an environmental rehabilitation programme approved within 60 days, and a way to buy and sell the mineral lawfully.

After it digs, it meets a different tax system from the oil companies: ordinary company tax rules, a royalty by mineral, and no automatic tax holiday since 2026. The exam asks about all of this in one chapter, starting with who runs the sector.

This topic covers the administration of solid minerals, the Nigerian Minerals and Mining Act 2007 and its institutions, the Mining Cadastre Office and its registers, mineral titles, the possession and purchase of minerals, environmental duties and host communities, and the tax incentives for miners. The previous topic covered the petroleum profits tax and production sharing contracts. The next covers mining tax computation, royalties and penalties.

Key terms in plain English

Syllabus check

This topic is in syllabus area F (taxation of incomes of extractive industries, 20% of marks). It covers:

• the administrative structure of the mining industry and its regulation;
• mineral titles, possession and purchase of minerals;
• environmental considerations, rights of host communities and mining incentives.

CAMA 2020 and mining companies

The Companies and Allied Matters Act 2020 (CAMA 2020) is the company law of Nigeria. The sections below apply to this topic.

The rules in more depth

The administrative structure

The sector is regulated by the Nigerian Minerals and Mining Act 2007 (as amended), which replaced the Minerals and Mining Act of 1999. Section 1 vests the whole property and control of mineral resources in, under or on any land in Nigeria, its continental shelf, rivers, territorial waters and exclusive economic zone in the Government of the Federation for the people.

• Ministry of Solid Minerals Development (MSMD). Formulates policy, advises on laws for prospecting, quarrying and mining, issues permits, licences and leases (through the Cadastre), collects rents, fees and royalties and provides data. Its departments include the Mines Inspectorate, Mines Environment and Compliance, the Mining Cadastre Office, Artisanal and Small-scale Mining and the usual finance and personnel units. Parastatals include the Nigerian Geological Survey Agency, the Nigerian Institute of Mining and Geosciences, the Council of Nigerian Mining Engineers and Geoscientists and the National Agency for Raw Materials Exploration.
• Ministry of Steel Development. Formulates policy to develop the steel industry; the steel companies and parastatals work under it.

Functions of the Minister:

• to ensure orderly and sustainable development of mineral resources
• plan their exploitation with regard to ecology
• monitor compliance with community development agreements
• encourage private investment and keep a balance between foreign and indigenous interests
• provide infrastructure
• develop technical manpower
• set environmental procedures and worker safety measures
• build a geo-scientific databank
• promote the sector
• keep records of enterprises
• set up departments
• introduce local content measures
• designate radioactive minerals

The Mining Cadastre Office

• A body corporate with perpetual succession and a common seal, set up within six months of the Act, headed by a Director-General, with its headquarters in Abuja and zonal offices.
• The sole agency for the administration of mineral titles: it considers applications, issues and suspends titles, and with the Minister’s written approval revokes them; handles transfer, renewal, modification, relinquishment and extension of area; and keeps a priority book (for exclusive rights on vacant areas) and a general registry book.
• Registers: reconnaissance permits; exploration licences; mining leases; small-scale mining leases; water use permits; quarry leases.
• Priority: where several applications for the same or overlapping areas arrive on the same business day, the first received in proper form has priority; the first come, first served rule is strictly applied by registration in the priority register, and a receipt gives the documents, fees, date and time.
• Competitive bidding: the Minister decides by regulation which areas go to bidding. The Office selects the bid that best promotes quick and beneficial development, considering the proposed programme and spending commitments, the applicant’s financial and technical resources and experience.
• Fees: a fee to process an application and an annual service fee at a fixed rate per square cadastral unit. If the annual fee is not paid, the Office gives a 30-day written default notice, records the default and revokes the title.
• Notices: by courier or registered mail to the last known Nigerian address, in person to an authorised representative, or by publication in the Gazette. The Minister must keep the Office independent.

Departments and committees

The Mines Inspectorate Department supervises all reconnaissance, exploration and mining, enforces health and safety rules, takes custody of minerals forfeited to the government, investigates compliance, keeps records and may enter any title area to inspect (refusing access is an offence). The Mines Environmental Compliance Department reviews environmental plans and reports, enforces and audits environmental duties and works with other agencies on mine closure and land reclamation.

Each State has a Mineral Resources and Environmental Management Committee chaired by a representative of the Environmental Compliance Department, with the land or mineral ministry, the Mines Officer, agriculture or forestry, the Surveyor-General, the local government when it is concerned, the State environment agency and the Federal Ministry of Environment.

It advises the Minister on compensation, pollution and conflicts, helps title holders deal with States and communities, meets at least every three months, and has a quorum of the chairman and three others. The Minister may delegate functions by notice in the Gazette, except the making of regulations.

Land use

Use of land for mining has priority over other uses and is an overriding public interest under the Land Use Act. If a mining lease, small-scale lease or quarry lease is granted over land with a valid statutory or customary right of occupancy, the Governor must, within 60 days, revoke that right under s. 28 of the Land Use Act.

Mineral titles (s. 46)

A title may go to an individual, a company or a co-operative, by competitive bidding or on request. The titles are: a reconnaissance permit, an exploration licence, a small-scale mining lease, a mining lease, a quarry lease and a water use permit. Searching or mining without the title or authority is an offence.

A title is subject to the conditions in the licence or lease and the regulations, and the form of titles is prescribed.

Possession and purchase of minerals (ss. 92 to 96)

• Genuine specimens of mineralogical, geological or educational interest, and minerals an employer receives from his tributers, are outside these rules.
• No one other than an authorised ministry officer may possess a mineral unless it was won from a title area he holds, he has a permit to possess or buy it, or he is an authorised agent or employee of such a person (s. 93).
• No one may purchase a mineral without a licence to purchase minerals (s. 94).
• Proceeds under a small-scale mining lease must be sold to a licensed mineral buying centre, with valid sales receipts available to a Cadastre officer on inspection (s. 95). Buying centres keep up-to-date records of purchases and sales with the mine of origin (s. 96).

Environmental protection and host communities (ss. 119 and 120)

A title holder submits an environmental protection and rehabilitation programme with specific rehabilitation and reclamation actions, inspections and annual reports; a reasonable estimate of the total cost and cost for each action; and a timetable for rehabilitating the area to a safe, sound condition fit for later economic or recreational use.

The Environmental Compliance Department, with the State Committee, approves or rejects it and tells the holder within 60 days; silence means approval. If it is rejected, the holder may submit revised programmes, and after a second rejection may go to arbitration within 30 days. Once approved, the Department ensures it is carried out. The Minister monitors compliance with community development agreements and the State Committee advises on compensation and community concerns.

Incentives

The Nigerian Minerals and Mining Act 2007 gave mining companies a package of incentives, and the NTA 2025 changed the tax part of it:

Worked examples

1. (a) A reconnaissance permit. (b) An exploration licence.
2. (c) A small-scale mining lease, with sales to a licensed buying centre.
3. (d) A quarry lease.

1. First come, first served by registration in the priority register applies.
2. Company A has priority. Each applicant gets a receipt showing the documents, fees, date and time.

1. No answer within 60 days, that is by 30 April, means the programme is deemed approved as submitted.
2. After a second rejection, the holder may go to arbitration within 30 days of the decision.

1. The Mining Cadastre Office gives a 30-day written default notice.
2. If payment is not made in that time, it records the default and revokes the title (with the Minister’s approval for revocation).

1. The automatic holiday in s. 28 of the Mining Act no longer applies.
2. It must apply for an economic development incentive certificate to claim the tax credit; without it, it pays tax at 30% (or 0% if it is a small company) and the 4% levy.

How to score full marks

• Start with ownership (s. 1) and the Ministry, then the Cadastre Office.
• List the six titles and match each to its purpose.
• Give the numbers: 30-day default notice, 60-day programme decision, 30-day arbitration.
• State the tax holiday position clearly: replaced by an application-based credit.
• Keep the deductibility condition for the rehabilitation fund: cash-backed, independent trustees.

Common mistakes in the exam

• Treating the three-year tax holiday as automatic in 2026.
• Listing five titles, not six, or leaving out the water use permit.
• Giving the Minister the job of the Cadastre Office.
• Forgetting that silence on an environmental programme means approval.
• Allowing a rehabilitation provision that is not cash-backed.
• Confusing the mineral buying centre with the licence to purchase.

Quick revision

• Minerals belong to the Federation; Ministry of Solid Minerals Development; Mining Cadastre Office.
• Six titles; first come, first served; 30-day default notice.
• Rehabilitation programme: 60 days, deemed approved; arbitration within 30 days.
• Governor revokes occupancy rights within 60 days.
• Tax holiday replaced by the economic development incentive; rehabilitation fund deductible if cash-backed.
• CAMA 2020: ss. 54, 119, 305, 308, 377(1), 378.

Practice questions

These are original questions written in the style of the Institute of Chartered Accountants of Nigeria (ICAN) exam. Try each one before you open the answer. Full model answers follow the written questions.

Recall check: multiple choice

Recent ICAN papers are written, although older papers such as May 2014 included multiple-choice questions. These questions are for quick recall. The written questions that follow are closer to the exam.

Written questions

Model answers

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