How foreign buyers are draining Nigeria’s mineral wealth

Nigeria is hemorrhaging mineral revenues through a network of foreign buyers, shell companies, corrupt intermediaries, and armed groups — and a new joint report names Chinese-linked actors as central to the problem.

The report, by the Nigerian Extractive Industries Transparency Initiative (NEITI) and the Africa Network for Environment and Economic Justice (ANEEJ), with UK government support, maps how illicit financial flows are draining a sector that should be an economic cornerstone.

Despite Nigeria sitting on at least 44 commercially viable minerals, the sector contributed just 0.72% to GDP, 0.28% of government revenue, and 0.75% of exports in 2023 — dwarfed by oil and gas, which accounted for 29% of revenue and 82% of exports. Nigeria’s Financial Intelligence Unit has already flagged illegal mining as an emerging national security threat.

The Chinese Connection

The report alleges that foreign buyers — particularly Chinese-linked actors — dominate pricing, purchasing, and export channels, often negotiating directly at mine sites. This enables systematic undervaluation of minerals, manipulation of grades and weights, and opaque, informal payment structures that leave little paper trail.

Foreign firms further obscure their footprint by registering shell companies in Nigeria and using local proxies to obtain licences — arrangements that facilitate trade misinvoicing and money laundering.

Conflict Zones as Cover

The situation is most acute in Nigeria’s North-West, where the report estimates up to 80% of mining activity is illegal. That figure worsened between 2022 and 2024 as banditry and insurgency expanded — and the report raises pointed concern about overlap between some foreign-linked mining interests and the insecurity in those regions.

One rare enforcement moment: in May 2025, four Chinese nationals were convicted in Plateau State and each sentenced to 20 years in prison with asset forfeiture. The Ministry of Solid Minerals Development and the Chinese Embassy in Abuja had not responded to requests for comment at the time of publication.

A Continental Crisis

The NEITI–ANEEJ findings sit within a wider African crisis that Pluboard has previously reported on.

A 2024 study by Swiss NGO SWISSAID estimated that between 321 and 474 tonnes of artisanal gold are smuggled out of Africa annually — worth up to $35 billion. In 2022 alone, at least 435 tonnes left the continent undeclared, more than double the smuggling volumes recorded a decade earlier. Over 70% of artisanal gold production goes unreported.

The UAE — especially Dubai — is the largest single destination, absorbing an estimated 405 tonnes of undeclared African gold in 2022 and over 2,500 tonnes across the past decade. Switzerland and India are also major transit hubs, where weak traceability systems allow gold to shed its African origin before entering global supply chains.

A separate Nigeria-focused study found that actual gold output far exceeds official figures, driven by informal mining networks that operate entirely outside regulatory systems — leaving large volumes moving through unofficial channels with no production data attached.

Taken together, the evidence points to a consistent structural failure: Nigeria and much of Africa are losing substantial mineral wealth through opaque trading systems, weak enforcement, and global demand networks that reward informality. The mining sector remains rich in potential — and chronically unable to convert that potential into revenue, transparency, or security for the communities living above the ore.

The Ministry of Solid Minerals Development and the Chinese Embassy in Abuja had not responded to requests for comment at the time of publication.