Why Nigeria Must Intensify Regulation of Its Booming Mining Sector
By MUKHTAR Ya’u Madobi
It is an absolute fact. Nigeria stands on the threshold of a mineral-driven economic renaissance. Beneath its soil lies a vast repository of over 44 commercially viable minerals ranging from gold, lithium, and zinc to limestone and coal collectively valued at more than $700 billion.
At a time when the global economy is pivoting toward energy transition minerals, Nigeria’s solid minerals sector offers a strategic pathway to diversify away from oil dependency, expand revenue streams, and generate mass employment.
Yet, despite this immense promise, the sector remains grossly underperforming, contributing less than 2% to the nation’s Gross Domestic Product as of early 2025. More troubling, the mining landscape has increasingly evolved into a theatre of insecurity, criminal enterprise, and socio-economic disruption, particularly in mineral-rich regions.
Across states such as Zamfara, Katsina, Niger, Nasarawa, Kebbi, Adamawa, Plateau and parts of the Federal Capital Territory, illegal mining has entrenched itself as a parallel economy—one often controlled by armed groups, including bandits and criminal syndicates.
These actors exploit weak regulatory enforcement, porous licensing systems, and local vulnerabilities to extract resources with impunity. The result is a dangerous convergence of economic sabotage, environmental degradation, and violent conflict.
Numerous reports and field observations suggest that these illicit operations are not isolated activities but are embedded within broader networks involving complicit elites, foreign collaborators, and informal financiers. This complex web continues to deprive Nigeria of legitimate revenue while exacerbating insecurity and undermining governance structures at both local and national levels.
To its credit, the Federal Government has initiated a series of reforms aimed at repositioning the mining sector. Under the leadership of the Minister of Solid Minerals, Dele Alake, several policy and operational measures have been introduced to sanitize the industry. Notably, the establishment of 388 mineral buying centres in 2024 was designed to formalize mineral transactions, improve traceability, and curb illegal trade.
In parallel, the deployment of Mining Marshals—a specialized unit drawn from the Nigerian Security and Civil Defence Corps (NSCDC)—has marked a significant escalation in enforcement efforts. This paramilitary outfit is tasked with identifying illegal mining sites, arresting offenders, and facilitating prosecutions. By late 2025, the unit had reportedly sealed over 640 illegal mining locations and arrested more than 350 suspects, with over 150 already facing prosecution.
While these interventions signal political will, they also underscore the scale of the challenge. Enforcement alone, though necessary, is insufficient without a robust regulatory architecture that ensures transparency, accountability, and inclusivity across the mining value chain.
This is where the role of the Nigeria Mining Cadastre Office becomes critical. As the statutory body responsible for the administration and management of mining titles, the NMCO has made notable strides in digitizing licensing processes, improving cadastral mapping, and enhancing investor confidence. Its electronic Mining Cadastre System (eMC+) has introduced greater efficiency and reduced bureaucratic bottlenecks in the issuance and renewal of mining licenses.
However, the effectiveness of the NMCO—and indeed the broader regulatory framework—depends on inter-agency coordination, real-time data sharing, and strict compliance monitoring. Licensing must go beyond issuance; it must involve continuous oversight to ensure that operators adhere to environmental standards, community engagement protocols, and fiscal obligations.
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Despite ongoing reforms, Nigeria’s mining sector continues to face significant structural challenges, including weak enforcement in remote areas, corruption that undermines regulation, and poor coordination among agencies. Inadequate data systems limit effective monitoring, while many artisanal miners operate outside legal frameworks due to poverty and bureaucratic barriers. Additionally, environmental degradation and the displacement of communities remain critical concerns.
Regulation as a Security Imperative
The link between illegal mining and insecurity in Nigeria is increasingly evident. Unregulated mining sites have become safe havens for bandits and criminal groups, providing both funding and operational cover. By enforcing strict licensing, monitoring supply chains, and deploying coordinated security responses, the government can dismantle these illicit networks.
Formalizing the sector reduces the economic incentives that drive young people into illegal mining and associated criminality. It also enhances intelligence gathering, as registered operators and communities become partners in surveillance and reporting. In this sense, regulation functions not only as an economic tool but as a critical component of national security strategy.
Proper regulation of mining is not just a governance necessity but a strategic tool for economic growth, delivering benefits across all levels of government and host communities.
At the federal level, it boosts revenue through royalties, taxes, and licensing fees while reducing leakages and improving fiscal planning. For states, although constitutionally constrained in direct ownership of mineral resources, it creates opportunities for increased internally generated revenue, attracts investment, and lowers security costs linked to illegal mining. At the local level, regulated mining drives rural development, stimulating business activities and small-scale economies around mining clusters, including transportation, housing, and retail services
Most importantly, host communities—often the most affected yet least benefited—can experience tangible improvements when regulation is enforced. They can benefit through improved livelihoods, job opportunities, and social infrastructure such as schools and healthcare. Effective regulation also helps prevent environmental damage, land disputes, and public health risks.
A comprehensive regulatory overhaul should prioritize the use of technology such as satellite monitoring and geospatial tools to track mining activities and detect illegal operations in real time. It should also strengthen legal frameworks by imposing tougher penalties on illegal miners and their sponsors, including asset forfeiture and cross-border enforcement measures. In addition, empowering host communities through benefit-sharing arrangements, local employment opportunities, and environmental protections will encourage them to resist and report illegal activities.
Equally important is the formalization of artisanal and small-scale miners by providing legal access, training, and financial support to integrate them into the formal economy and reduce illegal practices. Furthermore, stronger collaboration with international partners is essential to trace and curb illicit mineral exports, particularly high-demand resources such as lithium and gold.
Ultimately, the stakes are high. Nigeria’s mining sector can either remain a fragmented, conflict-prone space exploited by criminal networks or evolve into a well-regulated engine of national development. The difference lies in the rigor of its regulatory institutions, the consistency of enforcement, and the inclusiveness of its policies.
The urgency for reform is not merely economic, it is existential. A nation that fails to control its natural resources risks losing not just revenue, but sovereignty, stability, and the trust of its people.
MUKHTAR Ya’u Madobi is a Research Fellow at the Centre for Crisis Communication, Abuja.
