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Nigeria is losing billions in potential mineral revenue to illegal mining networks allegedly driven by foreign buyers, shell companies and criminal groups, according to a new joint report by the Nigeria Extractive Industries Transparency Initiative (NEITI) and the Africa Network for Environment and Economic Justice (ANEEJ).
The report, supported by funding from the UK government, paints a troubling picture of a mining sector plagued by illicit financial flows, weak regulation and growing security concerns, particularly in the country’s North-West region.
According to the findings, illegal activities in the sector range from commercial manipulation and corruption among public officials to cross-border smuggling and unregulated mining operations. The report warns that these practices have significantly undermined Nigeria’s ability to benefit from its vast mineral wealth.
Despite possessing at least 44 commercially viable minerals, Nigeria’s mining sector contributed only 0.72 per cent to GDP, 0.28 per cent to government revenue and 0.75 per cent to exports in 2023. By comparison, the oil and gas sector accounted for 29 per cent of government revenue and 82 per cent of exports during the same period.
The report alleges that foreign buyers, “particularly Chinese actors”, wield excessive control over mineral pricing, purchasing arrangements and export channels. It states that many transactions are negotiated directly at mine sites, creating room for systematic undervaluation of minerals, manipulation of grades and weights, and informal payment systems that bypass official oversight.
It further claims that some foreign-linked companies conceal ownership structures through shell firms registered under Nigerian law, often using local proxies to obtain mining licences and permits. According to the report, this structure facilitates trade misinvoicing and money laundering.
An estimated 80 per cent of mining activities in North-West Nigeria are believed to be illegal, with operations expanding rapidly between 2022 and 2024 in areas affected by banditry and terrorism. The report also flagged what it described as a “growing overlap” between some Chinese-linked commercial interests and local conflicts in the region.
Nigeria’s Financial Intelligence Unit has already identified illegal mining as an emerging threat to both the economy and national security.
The report noted that the May 2025 conviction of four Chinese nationals in Plateau State, each sentenced to 20 years imprisonment with asset forfeiture, remains a rare example of accountability in the sector.
