Mining States To Receive 13% Derivation Revenue - Minister Of Mines, Fayemi
States with active mining of solid minerals in their domains are to receive 13 per cent derivation revenue, just as their counterparts in oil and gas producing areas, the federal government has said.
The Minister of Mines and Steel Development, Kayode Fayemi, who said this in Abeokuta, Ogun State, said serious-minded operators in the mining sector would soon be granted access by the government to the intervention finance for mining from the National Resource Fund.
The minister, who was addressing the opening of the National Council on Finance and Economic Development (NACOFED) on Tuesday, did not say when the payment would begin.
The National Resource Fund is about 1.6 per cent revenue allocation from the Federation Account set aside by the federal government for agriculture, solid minerals and water resources development. The minister said President Muhammadu Buhari had already given approval for the Ministry of Mines and Steel Development to grant active players in the sector access to the fund.
The Minister, who spoke on the topic, “Non-oil sector as a sustainable alternative in enhancing revenue generation”, said funding has remained a major challenge to the development of the sector. Mr. Fayemi was however optimistic access to the mining intervention fund, coupled with funding to be
provided by Nigerian banks, would boost sector growth. Mr. Fayemi was however optimistic access to the mining intervention fund, coupled with funding to be provided by Nigerian banks, would boost sector growth.
"This is a significant shift. It signpostsStates with active mining of solid minerals in their domains are to receive 13 per cent derivation revenue, just as their counterparts in oil and gas producing areas, the federal government has said.
He said payment of 13 per cent derivation to states would deepen the ministry’s partnership with the state governments. Besides, he said arrangements were afoot to establish a Council of Mining and Mineral Resources Development, a quarterly forum for the minister, commissioners responsible for mining and natural resources at the states as well as other relevant government officials.
“The forum would be an avenue to discuss pertinent issues on the mining sector, which are of concern to the federal and state governments. It will also allow us to track progress on agreed areas of collaboration,” Mr. Fayemi said.
The minister also unfolded the ministry’s plan to set up zonal offices of the Mining Cadastral Office, to bring its operations closer to the states. Equally, he said the federal government would work with states to find commercial means to co-invest alongside private companies to bring mining assets to market faster and more profitably. The minister assured state government the right regulatory frameworks to encourage investors comply with global best practices in resource extraction, by integrating all relevant environmental protocols to conduct mining activities and related business.
“This is why ecological justice is one of the major planks of our approach to the repositioning of the solid minerals sector,” the minister said.