Expert Wants Mining Sector to Mirror Oil Law on Community Benefits
By Richard Akintade, Osogbo
A development finance expert, Dr. Wale Bolorunduro, has welcomed the Federal Government of Nigeria’s initiative to leverage solid minerals as a driver of economic growth and diversification of foreign exchange earnings.
In his assessment of the Environmental, Social, and Governance (ESG) framework for the mining sector, Dr. Bolorunduro noted that with the application of advanced technology, the environmental impacts of mining can be effectively managed within permissible limits. He explained that governance responsibilities lie jointly with mining operators, regulators, and government authorities.
However, he warned that the rush for mineral wealth, harmful mining practices, and the displacement of artisanal miners—particularly in Northern Nigeria—pose significant security challenges to mining activities. Given that the Constitution assigns government the responsibility for the security and welfare of citizens, he emphasized that governments at all levels must proactively address these risks from the initial stages of mining project development.
Dr. Bolorunduro stressed that the most critical consideration across all stages of mining and mineral processing is the delivery of tangible social and economic benefits to host communities. While the Nigerian Minerals and Mining Act (NMMA) 2007 provides for Community Development Agreements under Sections 116 and 117, he argued that these provisions are inadequate because they do not clearly quantify the share of economic value to be transferred to host communities—whether from the mineral resource being extracted or from the annual production value of mining operations.
Consequently, he urged regulators and operators in the solid minerals sector to adopt a more structured and measurable approach by emulating the Petroleum Industry Act (PIA) 2021. He specifically referenced Section 240(2) of the Act, which mandates operating licence holders, through their operators, to contribute an amount equal to three per cent (3%) of their actual annual operating expenditure to a Host Communities Development Trust Fund.
According to Dr. Bolorunduro, this framework provides a clear, quantifiable, and sustainable mechanism for transferring social and economic benefits to host communities, thereby promoting inclusive growth and long-term socio-economic development. He noted that “what does not get measured does not get done,” and cautioned that Nigeria must avoid repeating the historical mistakes of the oil-producing regions, where inadequate benefit-sharing mechanisms undermined social stability and national productivity.
He concluded by calling for deliberate policy reforms in the solid minerals sector to ensure sustainable development, improved community relations, and shared prosperity for host communities and the nation at large.
