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Nigeria’s government plans to introduce new rules to add value and export income to its mining industry by curbing exports of raw minerals and encouraging mining companies to process the raw materials into higher-value products in Nigeria.
The African OPEC member, which has been struggling to raise its crude oil production in recent years, is looking to boost its export revenues from natural resources by exporting higher-value processed products, not just the raw materials.
“You can’t take our minerals away without adding value locally,” Nigeria’s Minister for Solid Minerals, Dele Alake, told Bloomberg in an interview published on Tuesday.
“Which means you must start a factory to produce something that is associated with the mineral that you are taking out,” the minister added.
Apart from oil and gas, Nigeria has deposits of gold, lead, zinc, iron ore, coal, niobium, and potash, among others.
Other countries with large critical mineral resources are looking to process the raw materials domestically to be a competitive supplier of processed products for batteries.
For example, Indonesia, which has huge nickel reserves, hopes to be producing 13 million electric motorcycles and 2.2 million electric cars by the end of the decade.
Nigeria’s goal is to establish a minerals processing industry to have higher-valued exports of the already processed materials.
To this end, the country also plans to revoke licenses that have not been exploited in 18 months.
Last week, Nigerian media reported that President Bola Ahmed Tinubu wants to promote “value addition” to the minerals before they are exported.
“With this policy, the era of export of crude mineral ores from Nigeria is gone. Thus it is gratifying to note that many companies in Nigeria have already adjusted their business plans to this new normal and others are encouraged to do the same,” Tinubu was quoted as saying by Nigerian publication Business Day.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com