FG announces three-year tax holiday for mining companies

An undated handout photograph from Anglo American Plc shows mine operations underway at their Paso Diablo coal mine in Venezuela, released to the media on Monday, June 22, 2009. Xstrata Plc, the Swiss metals company that sold shares in London seven years ago, is seeking a merger with Anglo American Plc to create a mining group that would rival BHP Billiton Ltd., the world's largest. Source: VisMedia via Bloomberg News. EDITORS NOTE; NO SALES, EDITORIAL USE ONLY

Mining companies operating in Nigeria will henceforth enjoy three years tax holiday, the Federal Government says.

This is because the minister of mines and steel development, Kayode Fayemi, on Wednesday, offered prospective investors in the Nigerian mining sector three years tax holidays, as part of what he called “Federal Government’s incentives to serious investors.”

Speaking at the opening session of the ongoing Africa Down Under Conference in Perth, Australia, Fayemi said the country was determined to return stronger to the global ore and mineral market, and would drive the growth and development of the sector through the private sector.

The tax holiday, according to the minister, will commence from the date the investor commences mining operations in the country.

The minister, who presented graphical details of incentives obtainable in several other major mining countries, including Australia, USA, South Africa and Chile, told the audience, which comprised investors, operators and other allied professionals, that Nigeria was offering more generous incentives, including favourable tax regime and royalties.

He said Nigeria was determined to build a world class minerals and mining ecosystem designed to serve a targeted domestic and export market for minerals and metals, adding that part of the vision of the ministry is to contribute to job creation which.

“We are focusing on rebuilding our minerals and mining sector in three phases: Phase 1, in the immediate term, we are achieving import substitution by winning over domestic users of industrial minerals.

“Phase 2, our focus is on further expanding our domestic ore and mineral asset processing capacity. Phase 3, we will return stronger to the global ore and minerals markets at a market competitive price point,” Fayemi said.

He also listed other incentives approved by the federal government for investors in the mineral and mining sector to include exemption from custom and import duties payable on mining equipment.

Another incentive available to foreign investors that may want to establish business operations in the country is that the companies being established could be wholly owned by such investors.

Fayemi also identified security as another major area the government was investing in order to ensure safety of investment, as well as life and properties.

“Our government has a renewed commitment to the improvement of security across mine sites, logistic related security and general terrorism,” he said.

The African Down Under Conference is renowned as one of the leading fora for facilitating discussions on how to grow investments and participation in the African mining space.

It attracts significant interests from organizations prospecting for business opportunities in the mining sector in Africa.

Nigeria is attracting a huge attention at the conference in view of the recent discovery of nickel in some parts of Kaduna State by an Australian mining company and the planned presentation of the country’s mining road map at the conference.

YANGE IKYAA, Abuja