The Nigerian mining sector received a major boost on Tuesday as the Solid Minerals Development Fund (SMDF) and the Africa Finance Corporation (AFC) launched a facility that will unlock financing for Nigerian mining projects that satisfy the criteria for selection.. The collaboration, which entails that the SMDF and AFC will co-fund the projects, is a milestones that underscores the commitment of the Tinubu administration to the development of the solid minerals sector.
The partnership aims to financially support competent investors to transform the lucrative investment opportunities offered by the country’s high grade minerals (like gold and lithium) to bankable projects, as a way of unlocking the potential of the Nigerian mining sector for wealth and jobs creation.
Minister of Solid Minerals Development, Dr Dele Alake who spoke at a tri-partite agreements signing ceremony between the SMDF, AFC and mining investors, in Abuja, described AFC as a big pillar in the efforts of government to erect a formidable structure for the development of the sector, underscored the importance of financing mining projects.
He said ‘financing plays very significant role in the unlocking of the country’s vast liquid and solid mineral resources,’ and lamented that the discovery of oil, its exploitation and exploration in the past few decades brought about the operation of a mono-cultural economic structure that made Nigeria to lead indulgent lifestyle.
Discussing the role of stakeholders in the development of the solid minerals sector, the minister said: ‘Government needs the cooperation of the private sector, the Africa Finance Corporation, the banks, other financial institutions, and every Nigerian,’ adding that all and sundry will benefit from the policy decision and collaboration being made by the administration through the SMDF-AFC collaboration.
Recalling the issues that retarded the growth of the sector, the minister said Nigeria’s indulgent lifestyle made the country free with resources and revenue accruing to oil. ‘This made the country to shift attention from other critical sectors of the economy, such as the solid minerals, agriculture, industrialization, and others,’ adding that ‘Nigeria had free money flowing from oil and embarked on a spending spree.’
Discussing the consequence, he said the country’s indulgent lifestyle and spending spree have put Nigeria in the dire economic situation in which we find ourselves today.
While validating the crucial importance of the SMDF – AFC collaboration, the Minister assured that the current administration has shifted attention to solid minerals.
According to Alake, the first reason for the shift in attention to solid minerals is that oil and hydrocarbons are fading off in international affairs.
‘Today, there is upsurge in electric vehicles. This means that there will be less demand for oil and it is happening before our very eyes,’ he said, adding that if Nigeria does not deliberately and critically shift attention to solid minerals sector, the country risks regrets in a few years.
He therefore assured that the administration has the onerous duty to solidify the Nigerian economic structure for the coming generations.
Alake explained that the second reason why government is shifting attention from oil to the solid minerals is the effect of climate change on international politics, relations and economy, adding that nations aim to de-pollute the earth in order to avoid the consequences.
Alake stated: ‘We don’t want to burn the earth,’ adding that it is the reason why the present generation is committed to safeguarding the future to the extent that is possible. ‘So everybody is shifting and this is another reason why oil is going down in international economics,’ he added.
‘So we must also make our own minimal contribution to climate change by de-risking our environment and ensuring that global warming is reduced substantially.’
President of the Africa Finance Corporation (AFC), Samaila Zubairu thanked the Solid Minerals Development Fund, the Bank of Industry, Nigerian Export Import Bank and other bankers and mining industry stakeholders with whom its hopes to unlock the potential of the sector through the SMDF-AFC joint financing of mining projects.
He commended the Minister, Dr. Dele Alake for ‘various important developments that have recently been made in the sector, particularly in the area of geological mapping, data collection and facilitating development partnership between the Federal and State governments. He also commended the minister for creating a framework that will allow mining activities to proceed unhindered in the country.
The AFC president also acknowledged the commitment of the Executive Secretary of the Solid Minerals Development Fund, Hajia Fatimah Umaru Shinkafi, to ensuring that needed funds are made available to the sector, saying that her tireless commitment to attract funds for the development of the sector is a key issue that has earned for the sector ‘the very pivotal moment of the signing of tripartite agreements’ between the parties.
Samaila expressed optimism that current challenges of high inflation and poor value for the Naira, coupled with the high unemployment in the country are challenges that can be tackled by the ongoing unlocking of the country’s solid minerals sector.
According to the AFC President, unlocking the mining sector alongside other industrial sectors of the economy will make Nigeria a trillion Dollar economy.
‘President Tinubu says he wants to create fifty million jobs for the country. Nigeria is a trillion Dollar economy if the solid minerals sector is developed. If government focuses on export earnings through increased value addition to agricultural products, the goal can be achieved,’ he said.
Stressing the need for Nigeria to sustain current efforts to vitalize the solid mineral sector, the President of the Corporation, stated: ‘The intersection of climate change, shift and disruption in supply chains exacerbated by geopolitical decoupling and the current tensions among world powers, the need for food and energy security, and the need for consistent energy transition, especially that Arica holds the mineral reserves needed for the transition to fossil fuel, makes it compelling for Nigeria to develop its own solid mineral sector.’
Samaila expressed confidence that Nigeria is significantly blessed with solid mineral reserves. He said every state has at least three, some states have as mush as twelve deposits of different solid minerals. Nigeria’s minerals have higher grades than those from other jurisdictions. While other parts of the world have 2 grams per ton of gold purity, the minimum is 5 grams per ton of Nigerian gold while some regions of the country boast of 16 grams per ton, adding that Nigeria is so blessed.
He made the point that while other jurisdictions of the world have 0.1 to 0.7% of lithium concentration, the lithium ore from Nasarwa State, Nigeria has over 10% lithium concentration.
Discussing the essence of the collaboration, the AFC President noted that by partnering with the SMDF, the AFC aims to focus on transforming the opportunities into bankable projects. He said such significant high purity implies lower cost of production, more profit for businesses as well as more royalties to government.
These he said are factors that call for more seriousness and commitment to harassing the solid mineral potentials of Nigeria.
He pointed out that it is important to facilitate the transition of ASM miners through various stages of growth, noting that they should be supported to become junior miners, and thereafter industrial miners. Samaila said it is also important to give needed support to illegal miners so that they develop to become mainstream miners.
He expressed concern that ASM miners are unaware of the huge losses they cause themselves and their country by engaging in illegal mining. ‘If they know the volume of destruction they are causing, they would not do what they are doing,’ he stated.
Executive Secretary, Solid Minerals Development Fund, Hajia Fatimah Umaru Shinkafi highlighted the significance of the SMDF-AFC collaboration that gave rise to the signing of tri-partite agreements saying: ‘Mining occurs in phases, and you cannot proceed to the final stage where the most capital is required without completing developmental studies,’ adding that the collaboration is an effort aimed at supporting investors to complete the developmental studies that will take miners to the finish lines.
She expressed concern that most projects are abandoned because investors could not finish the developmental studies, adding that the initiative supports the critical strategic pillars of the transformation Agenda of the Minister of Solid Minerals Development, Dr Dele Alake.
According to the Executive Secretary, the collaboration has room for joint ventures with multinationals. She expressed optimism that the current stride achieved by the SMDF is a tip of the iceberg, and assured that more wins for the sector are underway.
