HOW TO SET UP A QUARRY BUSINESS IN NIGERIA

Quarrying business is an important sub-sector of the Nigerian mining industry. The mining and quarrying sector contributed over N100 billion to Nigeria’s GDP in 2021. The quarrying business sector is regulated by the Federal Ministry of Mines and Steel (“Ministry”) in terms of issuance of registration, permits, community development agreements and memorandum of understanding on miners. The Ministry acts  through the Mining Cadastre Office to manage and administer mineral titles in Nigeria. Below are what a prospective investor needs to know about how to set up a quarry business in Nigeria. 

What are the regulatory Frameworks for guiding the operation of Quarry Business in Nigeria?

The primary laws regulating the operating of quarry business in Nigeria are contained in the following legislations:

i. Land Use Act 1978

ii. Nigerian Mineral and Mining Act 2007

iii. National Environmental (Quarrying and Blasting Operations) Regulations, 2013. 

Note that there are other regulations applicable in the quarry business in Nigeria.

Is there any mandatory share capital for a company seeking to engage into quarry business in Nigeria?

Yes, the minimum share capital for a company seeking to undertake a quarry business in Nigeria must be N5,000.000.00 (Five Million Naira).

You can click the link below to read more on how to register a company in Nigeria:

What are the requirements for incorporating a Quarry Company in Nigeria? 

Incorporation of a quarry company is the prerogative of the Corporate Affairs Commission (CAC) subject to fulfilling all incorporation requirements and payment applicable fees. Below are the requirements for incorporating a company seeking to engage in quarry business in Nigeria:

• Two proposed names for the company: these names will be submitted to the CAC for name search, screening and approval. Upon approval, the promoters may thereafter proceed to register the company with the approved name.
• Proposed registered address within Nigeria, email address and phone number of the company.
• Details of the Shareholders, Director(s) and Company Secretary which must include their names, Contact/Home address, Email address, Phone number, Date of birth, Occupation, National Identification Number (NIN), and electronic signature respectively. Please note that for foreigners, an international passport will be sufficient for means of identification.
• Object of company: The company must be registered as a company engaged in quarry business.

You can learn more about the requirement for registering a company in Nigeria here.

What are the post-incorporation registrations and approvals required for setting up a quarry company in Nigeria?

Upon incorporation, the following are the (2) post-incorporation requirements for setting up a quarry business in Nigeria:

1. Registration with the Federal Inland Revenue Service (FIR)

Although a Tax Identification Number (TIN) is assigned to a company upon incorporation by the Corporate Affairs Commission. However, a company is required to register with the Federal Inland Revenue Service (FIRS) for tax purposes.

 Below are the requirements for the registration with the FIRS:

• Application letter on the company’s letterhead paper;

• Particulars of the company directors; and

• Utility bill of the registered address of the company.

2. Registration with the Mining Cadastre Office (MCO) located in Abuja FCT.

MCO is responsible for granting Quarry Lease in respect of any area of land, not exceeding five (5) hectares, and the lease, unless previously revoked or otherwise determined, remains in force for a period of five (5) years or less from the date of lease and shall expire unless renewed, provided the application for renewal is made three (3) months before the lease expires.

A holder of quarry lease is authorised amongst other things, to carry out operation on the land within the area of the lease, remove and dispose of any mineral specified in the lease; and do all such specified in the Act which may be necessary or convenient for the carrying out of its quarrying operations. 

Please note that the area specified in an application for a lease shall be surveyed before the MCO will grant the lease.

Please note also that quarry lease is unique and only covers the certain numbers of minerals specified on the licence.

What are the requirements, conditions and procedure for obtaining a Quarry Lease in Nigeria?

The statutory conditions for obtaining a Quarry Lease in Nigeria are as follows:

• The Mining Cadastral Office (MCO), on receipt of a valid application, shall grant and issue to the applicant a Quarry Lease within the 45 days;

• The duration of Quarry Lease shall not exceed five (5) years as required, provided the renewal application is made within three (3) months before the expiration of the lease;

• The area of land shall not exceed 5km2.

The following are the documents required to register for Quarry Lease with the MCO:

• A duly completed application form;

• Pre-feasibility report with (COMEG seal and signature);

• Evidence of technical and competence persons;

• The irrevocable consent from the landowners/land occupier;

• An attestation of no conviction of a criminal offence under the Act;

• Evidence of financial capabilities;

• A certified true copy of CAC certificate of incorporation;

• Evidence of payment of processing fees;

• Names of minerals to be exploited;

• Current Tax Clearance;

• Survey plan.

What are the applicable costs for setting up a quarry company in Nigeria?

What is the timeline for completing the setup of a quarry company in Nigeria?

The entire process should be completed in two (2) months. The incorporation of a quarry company can be completed by CAC in two (2) days after submission. 

Also, tax registration with the FIRS can be completed in five (5) days.

The application for quarry lease is processed by the MCO within 45 days of receipt of the application.