FG Reduces Miners’ Royalties Rate to 3.5%
Set to implement mineral export guidelines
The federal government has hinted that royalty rates for miners have been reduced from between three per cent and five per cent to between two and 3.5 per cent, noting that royalties will henceforth be paid directly to the Federation Account, after repatriation of proceeds by the exporter’s bank – in the currency of trade – before the exporter’s domiciliary account is credited.
The Minister of Mines and Steel Development, Alhaji Abubakar Bawa Bwari, who disclosed this at a press conference in Abuja, said that the advalorem value (market value) on which all royalties for exports are calculated, will henceforth be charged against the international quoted price of the commodity.
Bwari, while giving account of his three years’ stewardship in the mining sector, in Abuja, revealed that all mineral exports shall henceforth be inspected by the federal government-appointed independent pre-shipment inspection agents, who shall also render quantity and quality control services and monitor pricing.
He noted that the move, which is in accordance with the Pre-shipment Inspection of Exports Act, was a measures been put in place to ensure correct valuation of royalties.
According to him, “to promote and encourage more mineral exporters to go into mining and to make provision for the environmental degradation resulting from the activities of the informal artisan producers, royalties for mineral trading exporters is set at a reduced rate to between 2.5 per cent and 4.5 per cent.
“Under the-soon-to-be-released Mineral Export Guidelines, the lingering issue of evading payment of royalties or false declarations has been dealt with. This simply means that a person exporting, for example, Tin concentrate of 50 per cent tin metal content, will pay less royalties than a person exporting a concentrate of 70 per cent tin content.
He stated that the extra one per cent charged for non-mining exporters shall be deployed for environmental remediation by the government, saying whilst royalties were paid for only 56 within the period, export documentation was cumbersome and the process of mineral exports took 46 days to complete.
“This, we discovered was occasioned by the lack of a distinct procedure for conducting mineral exports. The whole export circles from inspection at source to shipment will now take16 days, instead of the current 46 days’’, the minister further stated.
“I am pleased to announce to you that for the first time in the history of Nigeria, the Ministry in collaboration with the Federal Ministry of Finance (FMF) has developed a handbook for Mineral Exports.
“The document addresses the lapses in processing exports and will facilitate the capture of accurate data on mineral exports.”
He added that the guidelines document will also plug revenue leakages, by ensuring repatriation of export proceeds and payment of royalties.
According to him, “ The new Export Guidelines for Solid Minerals: Procedures and Documentation Requirements for Ease of Doing Business in Nigeria will also reduce the time for processing Mineral Export Permits from 14 days to two working days.
“Implementation of the document is expected to commence by the second quarter of this year. The project is driven by the Home Finance Department of the Federal Ministry of Finance and the Investment Promotion and Mineral Trade Department of the Ministry.’’
Bwari also stated that the Ministry of Mines and Steel Development and Federal Ministry of Finance (FMF) have conducted the appropriate Stakeholders Consultative Forum and are arranging to hold a final sensitisation workshop for stakeholders in the first quarter of 2019.