Dirty Investment: Report Exposes How Chinese Company Devastates Abuja Community Through Illegal Mining, Exit Nigeria
December 13, 2024

PPDF with Kutasa community members at the location of the only facility(Borehole) provided by Hongao.
By Ekemini Simon
Peace Point Development Foundation, a Civil Society Organisation working to promote fiscal and environmental justice and protection of marginalized communities in Nigeria has issued a report that has exposed illegal mining activities by a Chinese company, Hongao Mining Company Limited.
The report captioned “Dirty Investment: Unveiling Illegal Mining by Chinese Companies in Nigeria ” and presented to the Public recently in Uyo had shown how some mining companies owned by Chinese nationals are breaching the Nigeria Mineral and Mining Act among other environmental laws and also short-changing their host communities.
Basic Facts About Hongao Mining
According to the report, Hongao Mining Company Limited was registered with the Corporate Affairs Commission (CAC) to do business in Nigeria on July 8, 2019
with registration number -1598203.
The company which has an inactive status at CAC has no information on its beneficial owners yet Karshi Abuja is one of its key mining areas.
Operations of Hongao
The report notes that Hongao Mining Company Limited, according to documents from the Ministry of Solid Minerals, is also known as Adahally Mining and General Business Limited.
According to the report, In December 2018, they got exploration licences with numbers EL28811 and EL28644 to mine Gold, Tin, Lithium and Tourmaline in Karshi council of Abuja. However, their mining area as contained in the license covers a total of 47.2km Kuje/ Karu Local Government Area within FCT and Nasarawa and was to expire in December 2021.
The report states that Hongao immediately commenced operations in hard to reach areas of Angwandadi and Kutasa communities in Karshi.
With a focus on Kutasa community, the report said it was observed and heard from the community that the company illegally used the only water source from the community which serves eight other communities- a stream to wash the stones extracted after which the waste finds its way back to the river in contravention of the Section 61 of the Nigeria Mineral and Mining Act 2007 which states that every holder of an exploration licence shall: “(a) conduct exploration activities in a safe, friendly, skilful, efficient, and workmanlike manner in accordance with the regulations; (b) conduct exploration activities in an environmentally and socially responsible manner; and …. (e) not abstract, divert or discharge water or effluent from any Watercourse except in compliance with a water use permit and regulations.” The report said Hongao failed to adhere to the provisions and this resulted in the contamination of the Community’s water source which till date, the community still drinks from this contaminated water.
EIA Not Conducted
The report said having noticed the contamination of the water source among several hazards caused by their operations, the team of researchers requested from the Ministry of Solid Minerals, Mining Cadastre and Ministry of Environment the copy of the company’s Environmental Impact Assessment (EIA) in this community.
The report said “While other MDAs failed to provide the EIA, the Ministry of Environment said the company does not have.
“This implies that the Company also failed to conduct an Environmental Impact Assessment (EIA) of their mining before commencing. In addition, the Environmental Impact Assessment (EIA) Act of 1992 frowns at the pollution experienced in Kutasa. Though the company is duly registered with the Corporate Affairs Commission (CAC), it failed to comply with the guiding principles of the EIA Act.
(1) The public or private sector of the economy shall not undertake or embark on or authorise projects or activities without prior consideration, at an early stage, of their environmental effects.
“(2) Where the extent, nature or location of a proposed project or activity is such that it is likely to significantly affect the environment, its environmental impact assessment shall be undertaken in accordance with the provisions of this Act,” Section 2 (1)(2) of the Act states.
The EIA is a compulsory study about the social and environmental impacts of a proposed project. It is usually a joint study conducted by environmental consultants with inputs from experts, host communities and relevant government officials to examine whatever impacts a mining project may have on the people socially, environmentally as well as remedial measures to be taken.
Section 70 (g) of the Mining Act, (2007) states the obligation of Hongao Mining Company on EIA.” Every holder of a mining lease shall comply with all requirements for Environmental Impact Assessment studies and protection plans”.
Most importantly, Section 71 (1) notes that the holder of a mining lease shall not commence any development work or extraction of minerals resources on the mining lease area until after “the submission and approval by the mines Environmental compliance Department of all Environmental Impact Assessment Studies and Mitigation Plans required under applicable environmental laws and regulations”.
The report said with the pollution, it is doubtful that the EIA was conducted.
The report noted that the mining company has the responsibility by law to prevent pollution. Section 111 of the NMMA (2007) provides ” The holder of mineral title shall, in exercise of his rights under the Mineral title, have regard to the effect of the mining operations on the environment and take such steps as may be necessary to prevent pollution of the environment resulting from the mining operation.” They noted that this has not been adhered to.
Questionable Implementation of CDA
Section 116 of the NMMA provides “Subject to the provisions of this section, the Holder of a Mining Lense, Small Scale Mining Lease or Quarry Lease shall prior to the commencement of any development activity within the lease area, conclude with the bost community where the operations are to be conducted in agreement referred to as a Community Development Agreement or other such agreement that will ensure the transfer of social and economic benefits to the Community”
The report said that the Mining Cadastre failed to comply with our request for the CDA of Hongao Mining in respect to their mining activities in Kutasa. However, on our visit to the community, the Community Leaders noted that there exists a CDA.
The report added “The CDA however was not handy. But the community leaders noted that among the social and economic benefits included in the CDA was: 1. Provision and equipping of a Primary Healthcare Centre
2. Renovation of existing Primary School
3. Provision of Borehole and reticulation for the community.

“Surprisingly, out of the little things provided for in the CDA, the community reported that it is only a borehole that was provided for. Yet, according to the community, this was provided for after the community instituted a legal action against the company when their water was terribly polluted to the extent that their cows stopped drinking it.
“Be that as it may, the borehole provided lasted only for a year and now the community have been left with a Hobson’s Choice but to drink from the polluted water.”
Hongao illegality Exposed, Licence Revoked
The report noted that in July 2020, through the investigative report of The Cable Newspaper, the pollution and illegality of Hongao mining company was brought to the fore and this made the government investigate the company and found them to have devastated their host communities.
In September 2020, the government through the National Environmental Standards and Regulations Enforcement Agency (NESREA) sealed off the company.
The report stated that it was only on January 24, 2024 according to documents from the Mining Cadastre that the Federal Government revoked the company’s mining licence.
” But this leaves a question on the continued operations of the company outside the coverage of their license. The two licenses provided to us by the Ministry of Solid Mineral Development as as follows:
28811 EL: Effective Date- December 14, 2018 to December 13, 2021
28644 EL: Effective Date- December 7, 2018 to December 6, 2021″, the report added.
The report said the community members informed the researchers that they stopped seeing the company between late last year and early 2024.
Kutasa Despoiled, Devastated yet no Remediation
The report noted “When our team in October 2024 visited the Federal Ministry of Solid Minerals to request information on the state of mining activities in Kutasa and remediation plans, the Ministry noted that Hongao are no longer mining in the Community and that they are no more in Nigeria.
“But the company has left behind deep devastation of the community and this has continued to hunt the communities. In fact, the mines are left bare.
“What then is their fate? Section 114 provides for restoration of mine lands. It states ” The Minister shall by order require the grantee of a mining lease to restore any area in respect of which mining operation has been; is being, or is to be carried out, on after the date on which this Act comes into operation.
The Act provides for restoration of the community. Section 115 provides ” Where land which is subject of a mining lease has been exploited, the Reclamation mined out areas shall be restored by the applicant under the condition of its grant otherwise the relevant provision of section 10 of this Act shall apply.”

No Information on Beneficial Owners of Hongao Mining Company
Section 119 of the Companies and Allied Matters Act (“CAMA”) 2020, in
conjunction with the Persons with Significant Control Regulations (“PSC Regulations”) 2022, requires companies, Limited Liability Partnerships (“LLPs”), and by extension, foreign exempted companies under section 80 of CAMA 2020 and government-owned entities in Nigeria to disclose details of their beneficial owners and those with significant control over the company. This is in line with global efforts to combat money laundering, terrorist financing, and other illegal activities.
Section 119(3) mandates the Corporate Affairs Commission (the “CAC”) to maintain a register of persons with significant control, also known as the Beneficial Ownership Register (“The Register”) in the relevant entities.
The report said curiously, a search at the Beneficial Owners portal of the Corporate Affairs Commission turned out no result of the Beneficial Owners (BO) of Hongao company. Same applies when the BO portal of the Nigeria Extractive Industry Transparency Initiative (NEITI) was checked.
PDF said non-availability of this information coupled with possible failure to file annual returns in line with the provisions of CAMA 2020, made the Company’s identity to be flagged on CAC portal as inactive.
It added “The only document in which a name of one said to be a director in the company appears is a “compensation agreement” sighted by Cable Journalist with the seven owners of the land for “small-scale mining operations”. His name is Yuan Jian, secretary/director of Honago.
“Surprisingly, Checks into the NEITI Solid Minerals Report 2018-2021, no information on the company is provided.”
Recommendations
The report called on the Minister of Solid Minerals Development to immediately order the Hongao Mining company to reclaim Kutasa among other communities they have operated.
It said the excuse that they have left the community is insufficient. They added that the company must also pay compensation to the communities for the damages done in line with section 107-110 of the NMMA.
The report added that since the Hongao Mining company had exploited the community for years before leaving, they must be mandated to provide everything covenanted in the CDA stressing that failure to implement this would imply that the community was only scrambled upon and abandoned as a despoil of war.
The report stressed the urgent need for the Mines and Inspectorate Department together with the Environmental Compliance Department of the Ministry to be strengthened noting that “It appears there is a huge oversight gap hence the reason the companies have treated with levity the provisions of the law and also fail to implement the CDA they have covenanted to implement.”
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