LAGOS – Nigeria is losing vast mineral revenues to a web of illegal trading networks dominated by foreign buyers, shell companies and armed criminal groups, a joint government-civil society report said, highlighting the scale of illicit activity in the sector.

The report, produced by Nigeria’s extractive industries watchdog NEITI and the Africa Network for Environment and Economic Justice (ANEEJ) with UK government funding, found that illicit financial flows in the mining sector occur through commercial manipulation, illegal mining, corruption among officials and cross-border smuggling.

Despite being endowed with at least 44 commercially viable minerals, Nigeria’s mining sector contributed just 0.72% of GDP, 0.28% of revenue and 0.75% of exports in 2023 — a fraction of oil and gas, which accounted for 29% of revenue and 82% of exports.

Nigeria’s Financial Intelligence Unit has identified illegal mining as an emerging threat to the economy and national security. 

Foreign buyers, particularly Chinese actors, exert disproportionate influence over pricing, purchasing arrangements and export channels, negotiating directly at mine sites, the report alleged. This enables systematic undervaluation of minerals, manipulation of grades and weights, and informal payment arrangements.

Foreign companies often obscure ownership through shell firms registered under Nigerian law, using local proxies to access licences and permits — a practice the report alleges enables trade misinvoicing and money laundering.

An estimated 80% of mining in North-West Nigeria is illegal, with activity surging between 2022 and 2024 in areas affected by banditry and terrorism. The report flagged a growing overlap between some Chinese-linked commercial interests and local conflicts in the region.

The May 2025 conviction of four Chinese nationals in Plateau State, each jailed for 20 years with asset forfeiture, remains an exception, it said.

The Ministry of Solid Minerals Development and the Chinese Embassy in Abuja did not immediately respond to requests for comment.