This report firstly presents an analysisof the Nigerian economy as the environment within which thesolid minerals sector is situated. It discusses the economyin terms of its distinguishing characteristics, structureand related issues, such that the place of the sold mineralssector can be appreciated. An examination of policy issuesand economic reforms to aid the development process is alsopresented. This study, carried out between February andApril 2007, specifically addresses the prospects ofdeveloping an industrial mining sector in Nigeria. Thecurrent mining sector is dominated by small-scaleoperations, working below their full potential and literallyscratching the surface. Preliminary investigations indicateda lack of up to date information on deposits and lack ofmicroeconomic information on the feasibility of extraction.The study is considered to be important from two differentperspectives. First, solid mineral resources areeconomically, socially and environmentally crucial forNigeria. There are key knowledge gaps in the sector. Inaddition the utilization of solid mineral resources is wellaligned with the Bank's country partnership strategy,which is placing a strong focus on nonoil growth sectors ofthe economy. The other perspective comes from theenvironmental sector; the Bank has just completed the CEA(Country Environmental Analysis) and the idea is to continuethe policy dialogue with the mining sector, and to helpstrengthen its links to the economic sectors where theenvironment is important. This study provides a majoropportunity to carry this out. The primary objective of thestudy is to assess the prospects of an industrial miningsector emerging in Nigeria given what is known about thecountry's geology and mineral endowment as well aseconomic, institutional and other factors.