November 2026, Edition 1
For decades, Nigeria’s extractive sector has been defined by an export paradigm affecting raw materials. Recently, amid a global shift toward energy transition minerals, the Federal Government of Nigeria, through the Ministry of Solid Minerals Development, has signalled a firm departure from this paradigm.
President Bola Ahmed Tinubu has mandated that all new mining licenses in Nigeria require local value addition, a decision underscoring the Federal Government’s dedication to domestic processing, mineral beneficiation, and national industrial growth. Consequently, title holders and foreign operators may no longer be permitted to export raw mineral ores without processing them locally.
The economics and politics of this directive are respectable and popular, however, a legal question is posed to the extent of the mandate as presently constituted and whether it should be considered a law, or an aspiration dressed in the language of a law. This article seeks to clarify and explore policy solutions to address such attendant issues.
Section 44(3) of the 1999 Constitution vests the entire property and control of minerals in the Government of the Federation, to be managed “in such a manner as may be prescribed by the National Assembly”. Mines and minerals sit on the Exclusive Legislative List. See also Item 39 – Second Schedule – Part I of the 1999 Constitution.
In relation to the statutory requirements, two points deserve emphasis. First, the language of section 44(3) is itself instructive; management of minerals is to be “prescribed by the National Assembly”. That points to legislation, not policy statements, as the proper vehicle. Second, the economic objectives in section 16 of the Constitution, which mandates the State to secure the maximum welfare of its citizens from the nation’s resources, is not justiciable on its own by virtue of Section 6(6)(c) of the Constitution but supplies a persuasive purposive background once the National Assembly has legislated. The beneficiation mandate has constitutional backing, however, it needs a lawful instrument.
The Nigerian Minerals and Mining Act 2007 and the Minerals and Mining Regulations 2011 establishes a tiered title regime (reconnaissance permit, exploration licence, small-scale and large-scale mining leases, quarry lease, water use permit), protects license holders from sudden cancellation, gives tax breaks, and allows companies to export raw, unprocessed minerals freely provided that they pay the relevant royalties. The absence of a beneficiation rule is the heart of the problem, as such, the mandate must be sourced elsewhere.
Licence conditions. Conditions attached to new titles and renewals, and approved work programmes, are a legitimate and prospective route, provided that they are within the Act and clearly stated at the time of grant. They cannot be applied by announcement to leases already granted.
Discretion over export permits. A refusal to issue export permits to those who have not processed locally is, in substance, a ban imposed through discretion. Administrative discretion must be exercised for the purposes the enabling statute contemplates; importing a policy the statute does not contain invites judicial review for improper purpose and want of fair hearing under section 36(1) of the 1999 Constitution.
Customs and export-prohibition powers. Nigeria has statutory machinery for prohibiting or restricting the export of specified goods, notably the Export (Prohibition) Act and the Customs and Excise Management Act, although available, that route demands a formal, gazetted order. A press statement is not an order, and a person cannot be penalised for breach of a prohibition that is not defined in a written law (as stated in Section 36(12) of the 1999 Constitution (as amended)).
The proposed Raw Materials Research and Development Council (Amendment) Bill, which would bar the export of any raw material without at least 30 per cent value addition, has cleared both chambers, however on the latest report, it was returned to the President for further consideration and has not been implemented to law.
A separate Nigerian Minerals and Mining Bill, which would repeal the 2007 Act and establish a new Commission remains before the National Assembly. We are of the opinion that where the beneficiation mandate is to be housed appropriately, it should be within that Bill.
Mining leases run for 25 years and are renewable. Their holders have raised capital, signed offtake agreements and, under section 116 of the Act, concluded community development agreements, all on the footing that the export of ore was permitted on the payment of royalty. An in-country beneficiation mandate applied without transition to such holders attracts three lines of attack; the Act’s own insistence on notice and an opportunity to remedy before a title is disturbed; the presumption against retrospective operation of legislation; and the guarantees against expropriation in section 25 of the Nigerian Investment Promotion Commission Act and section 44(1) of the Constitution. Nonetheless, the best approach is not to abandon the policy; build in a reasonable transition period and milestone-based compliance and make statutory enactments and/or amendments where necessary.
Should the policy survive scrutiny in court and in the market, we propose the following solutions:
Nigeria possesses both the constitutional mandate and the economic rationale to require domestic mineral beneficiation. The policy objective itself is sound, but the concern lies entirely in its execution. Policy reliant on administrative announcements, discretionary authority, and unsigned legislation remains legally vulnerable with the potential to undermine investor confidence and operational viability.
To realize the true value of its mineral wealth, Nigeria must refine its legal framework before attempting to refine its resources. A viable beneficiation regime requires clear legislative enactment, precise statutory definitions, sensible phase-in periods, and robust protections for legitimate expectations. When grounded in a stable legal foundation, value addition and beneficiation cease to be mere ambition and become enforceable law securing both regulatory integrity, investor confidence and national economic prosperity.
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