MCO Stewardship: How strategic controls triggered revenue, curbed dormant titles and improved debt recovery – Director General

The Director-General of the Nigeria Mining Cadastre Office (MCO), Engr. Obadiah Simon Nkom is two years in office today, January 11, 2021.

In this exclusive interview with THE TRUTH, he discusses new measures put in place by his team to enhance the mandate success of the mineral licensing Office, stating that without increasing licensing fees, the agency put in place measures to effectively control the spate of dormant mineral titles.

He assured that the new measures will complement the digitalization of the MCO and work in harmony with other polices for the holistic development of the sector and the attainment of set goals.

Francis Kadiri writes.


Engr Simon Nkom, Director General, Mining Cadastre Office

What is the mandate of the Mining Cadastre Office?
The Mining Cadastre Office was established to independently administer mineral titles to those who want to invest in the sector. It plays very pivotal roles in the aim of government to make the sector attractive to investors with an overall aim of diversifying the sector.

The MCO is primarily responsible for Mineral Title Administration. It also contributes significantly to Mining Sector Revenue Generation as well as conflict management and resolution especially between mineral-rich communities across the country and the investors.

The Agency also plays a critical role in the effort of government to attract foreign investments to the sector.

How have you been able to achieve them during the period under review, i.e., the past two years that you have served as Director-General of the Agency?
I would answer your question by saying that so much has been achieved in the midst of challenges, and so much more is in progress.

The achievements were made possible by the attention of the Hon Minister of Mines and Steel Development, Arc Olamilekan Adegbite and the Hon Minister of State, Dr Uchechukwu Sampson Ogah.
The two ministers have been very committed to the institutionalization of transparency of best practices in the sector.

A major achievement is the Upgrade from analogy cadastre system to the world class electronic cadastre system eMC+. The Upgrade and Migration to online system will provide a strong foundation for Mineral Sector Development.

The MCO is also decentralizing its operational base. To this end, in partnership with Mindiver, we have established six zonal offices across the federation, one in each of the six geopolitical zones of the federation. Staffs have already been deployed to the six new zonal offices to provide effective management and coordination of the mandate at the offices.

Apart from installing electronic mining cadastre software, staff at the Headquarters have been trained on effective management of the electronic mining cadastre. So, all is set for eMC+ Administration.
Another goal is the establishment of a standard system of e-recording and e-archiving in line with the new system. Each zonal office has been supported with an operational vehicle.

Here at the head office, we created additional office space to accommodate Head of Divisions for effective discharge of duties.

Another milestone is the creation of a New Unit known as Research, Development and Sustainability unit with well-defined mandate for smooth running of programmes and event.

What new policy measures did your administration put in place to address the challenges of mineral licensing in Nigeria especially the spate of dormant titles?
Yes, we are worried by dormant titles because it has serious implications on set goals. You would find that there are title holders who would not explore or mine the field, yet they have valid titles to a well defined piece of land. This has serious implications for the development of the sector and the Nigerian economy. So, we moved to ensure that title holders use their titles or relinquish them.

What the Mining Cadastre Office did was not to increase or reduce licensing fees, but we put in place mechanisms that will enable us control the attitude of some title holders whose mineral titles are dormant.

We modified existing policies and applied it to quests for new licenses or renewals in a way that does not encourage any investor to abuse privileges.

How does it work sir?
We did this by discouraging the acquisition of large areas, which if granted, an investor may not be able to go even halfway. Before the current administration, the fee for one cadastre unit is the same as nine hundred and fifty cadastre units. Unfortunately, people abused this opportunity by taking large areas that they would not even be able to explore. As a result, there are dormant titles here and there. To address that, we determined that fifty square kilometers is a good threshold for an exploration license. So the new rule is that any additional square kilometer attracts the same fee, and we did so in line with the law.

My administration initiated this control measure because some people abused the magnanimity of government policy. “Investors should cut their coat according to their cloth, not their size.” Investors should take only the number of square kilometers that they will be able to explore. They should not abuse the magnanimous disposition of government to mining investors. When privileges are abused, it prevents serious investors from making use of the license.

Sir, what if those who have dormant titles are able to pay the renewal fees, isn’t that okay?
No, as far as we are concerned, it is not okay to hold a dormant title even if you may pay the renewal fee. We do not encourage that because we are not interested in the fees alone. What we really want title holders to do is to carry out mineral exploration or mining activities and deliver the promises of the sector to Nigerians, especially jobs and wealth.

The aim of government is to create jobs and wealth for people. Dormant titles do not create jobs. Dormant titles will not lead to economic diversification, so we do not condone it for any reason even if you think you can pay the renewal fee.

But if there are genuine situations,, the consideration could be made as a general rule, and must not contravene any law governing the sector.

What are the implications of holding on to unused mineral titles? 
When a title holder fails to explore the land for minerals, he deprives those who are willing to do so over that same piece of land. He denies the country from economic growth and development.

Before now, a quarry operator can take a Mining License for as much as three square kilometers and pay the single fee just because he has the right to it, but will abuse the privilege in the end as he will not even use one-third of the space. In fact, in ten or twenty years, he might not be able to use it. I am happy that the controls we initiated are beginning to address the issue.

How competitive are these policies when compared with what is obtainable in other climes, especially in the West African sub region?
I must tell you that the Nigerian government has put in place investor-friendly policies that are even more attractive than what is obtainable in other countries in Africa. This is so because Nigeria is still a developing mining nation.

Nigeria’s mineral licensing fees are less when compared to those of others countries.
What other measures are you addressing?
Our control also seeks to address various abuse of privilege and this includes the first-come-first-served policy. We discovered that some people who have dormant titles still want to acquire additional titles and licenses. In fact, some of them have some outstanding fees to pay, yet they would approach the MCO for new titles. We have resolved that even if they come first for titles over a free land, we would insist that they offset their outstanding obligations or use their dormant titles, or relinquish their dormant titles before they will be granted new titles. This approach is also part of our new control strategies.

The approach has also helped us to recover a lot of debt thereby increasing revenue generated by the sector.

In developed countries, the law requires that those who seek renewal of titles must shed off thirty percent of the area. This means that no investor will be allowed to renew a dormant title, i.e., you must have carried out mining activity on your field before you would be permitted to renew the license. The current management of the MCO is working to make this a part of our control strategies in Nigeria, and we hope to make it a part of laws governing the administration of mineral titles soon.

The MCO takes into cognizance laws governing the sector, and it is only when this idea has legal backing that the MCO will be able to enforce it.

To what extent did Covid-19 challenges stunt the revenue profile of the MCO during the period under review?
In 2018, the MCO scaled revenue expectations by generating over two billion Naira from fees alone, not royalties. 1n 2019, the MCO achieved a milestone in revenue generation that was never attained by the MCO until then.

The strategic controls I discussed did so much to shoot-up our revenue profile before Covid-19 and even now that Covid-19 is a serious threat to businesses. People are in business and the MCO remains a gateway to legal mining in Nigeria, so serious investors need licenses.

Generally, the Nigeria Mining Cadstre Office innovatively generates not just multiple streams of revenue for government, but also put in place the identification required to track and recover revenue.

The ability to successfully attain the shift of the Nigerian economy from Oil to Agriculture and Solid Minerals hinges on the successful operations of strategic Government Agencies, of which the Nigeria Mining Cadastre Office plays a central role, for the realization of goals.

How is the MCO working in synergy with the sister agencies of the ministry?
There exists a strategic working relationship between the Nigeria Mining Cadastre Office and the Nigerian Geological Survey Agency as regards the National Integrated Mineral Exploration Project (NIMEP) whereby viable areas are delineated and protected for the purpose of the project. Thereafter, the areas will be earmarked for the Bidding Exercise. This is also extended to the National Iron Ore Mining Company (NIOMCO), Itakpe and Ajaokuta Steel Company (ASCO).

The MCO currently has a Research, Development and Sustainability Unit that conducts work in a creative and systematic manner through specific processes, researching the status of the Mining Industry (globally) and locally in line with best international practices, drawing up recommendations with focus on the mandate of the Mining Cadastre Office, to keep the office up to date with happenings in the industry globally.

The e-records and archiving department of the MCO will set the stage for eMC+ to function optimally and in the near future incorporation of software that will accommodate geologic and progress reports to boost the generation of geoscientific data (working closely with NGSA).

The MCO is also working closely with NIOMCO and NSRMEA on Ajaokuta Iron ore to be used for steel and other Strategic minerals Cooking Coal, Bauxite, Dolomite some of these areas are protected by MCO to prevent exploitation and preserve the areas for when the steel plant project kicks off.

The MCO is already implementing a strategy to strengthen the Presidential Artisanal Gold Mining Initiative of the Federal Government focusing on artisanal miners. We are protecting various areas identified as resource spots for the Gold Project Initiative programme.

How is the MCO working to facilitate government’s policy of developing the minerals of the future?
Thank you for that question.
The MCO has also been able to undertake market survey with respect to future minerals such as Lithium, Yttrium, Lanthanides and REE, Nickel, Copper and Manganese among others.

Already, the Agency has placed a restriction, not granting licenses on these minerals and other strategic minerals such as Gold, Coal, unless the applicant provides evidence of competence to develop these strategic minerals.

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