A grant of a Mining Licence to a prospective company is subject to proof of economic reserve of the mineral commodity for which a concession is sought. The process involves the company first applying to the Honourable Minister for Certificate of Entry into Mining Industry. The requirements for this include submission of the company’s Certificate of Registration, evidence of technical competence and of financial capability. ?The next step is for the company to apply and obtain a prospecting right (PR) to enable it carry out general and scientific prospecting for the categories of minerals within the prospecting right. If properly conducted, work on this right will guide the company towards zeroing into a particular mineral within a specific land area.
The company will then put up application for an exclusive prospecting licence (EPL) in the State Mines Office where the mineral is located. This is an exploration licence for a particular mineral(s) over a particular land area which, by law, should not exceed 22 square kilometers. Once granted, the area is held exclusively to the company which will now confidently invest in mineral exploration work on the area without hindrance. This licence is renewable every one or two years depending on the nature of the terrain.
It is only after the company has satisfied itself of the availability of the mineral in commercial quantity on the EPL that it will apply for grant of a Mining Licence over the whole or part of the area covered by the EPL.
In the course of all these processes, the law insists that the company employs the services of a “technically competent person” in carrying out the prospecting under the PR, the exploration within the EPL and finally the extraction of the mineral within the mining licence area. This is necessary and to the advantage of the mining company if it is to reduce investment risks and reap the maximum benefit from the investment.