A Review of the Nigerian Energy Industry

91 firms sign community mining agreement in 2017 – Ministry

A mining site

Princewill Demian

29 March 2018, Sweetcrude, Abuja – The Ministry of Mines and Steel Development says 91 mining companies signed the Community Development Agreement (CDA) with their host mining communities during the past year.

The Nigerian Minerals and Mining Act (NMMA) 2007 introduced a novel practice of mandatory community agreement between mining sector operators and a certain segment of the society referred to as “the host community”.

By virtue of this legislation, the concept and practice of Community Development Agreement (CDA) has become an important part of Nigeria’s energy sector legal framework which needs to be understood and implemented.

The Director, Mines Environmental Compliance Department of the ministry, Mr. Salim Salaam, who disclosed this in an interview on Wednesday in Abuja, said the mining companies and their host communities signed the agreement in line with the ministry’s law and mandate to promote socio economic development at every community.

According to him, “Wherever mining operation is going on, the community should have some benefits from the projects, this will impact positively on the lives of host communities and improve their relationship with better interaction.

“We at the ministry don’t partake in the signing of the agreement but we ensure that the terms and conditions in the agreement are achievable and realistic.”

Salaam explained that the Mining Act enacts a regime of mandatory CDA negotiation between minerals exploration and production companies and communities within and around which they operate.

The NNMA refers to this unique segment of the Nigerian society as the “host community” of the particular minerals exploration and production activity occurring within the host area.

“A CDA is defined as any negotiated agreement between an extractive industry proponent and a community stipulating how that community accesses development initiatives undertaken to be provided by the project proponent.

“In other words, one of the functions of a CDA is to regulate the manner in which a host community benefits from the resource exploration and production activity occurring on community land,” he stated.

The director further said his department has a monitoring and enforcement unit, which ensures mining companies fulfill the agreement signed with their host communities.

“The unit collates information, checks regularly, and updates its records before the timeline given to the companies to operate in the communities expires; if any company failed to fulfill its agreement, the unit follows them up,” Salaam said.

He added that the department is planning to increase its performance to ensure that all mining companies operating in Nigeria sign CDA with their host communities.

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