The federal government of Nigeria, through the Solid Minerals Development Fund of Nigeria (SMDF), has signed a memorandum of understanding with the Africa Finance Corporation (AFC) and Excargo Multiphysics towards de-risking.
Nigeria’s mining sector and unlocking its potential for wealth and jobs creation.
LEADERSHIP reports that AFC is the leading infrastructure provider on the continent, SMDF is Nigerian mining-focused development fund, while Xcalibur Multiphysics (Xcalibur) is a global leader in airborne geophysics.
The agreement, signed at the sidelines of the ongoing 8th edition of the Nigerian Mining Week, in Abuja, aims to provide critical funding support to competent investors to pursue opportunities offered by the country’s high grade minerals. It aims to address the dearth of expertise and funding for early-stage mining projects, paving the way for these projects to reach full-scale operations.
Minister of solid minerals development, Dele Alake, who spoke at a tri-partite agreements signing ceremony, described AFC as a big pillar in the efforts of government to erect a formidable structure for the development of the sector, and underscored the importance of financing mining projects.
Alake said: ‘Financing plays very significant role in the unlocking of the country’s vast liquid and solid mineral resources. Government needs the cooperation of the private sector, the Africa Finance Cooperation, the banks, the financial institutions, and every Nigerian,’ adding all parties would benefit from the SMDF-AFC collaboration.
According to him, the collaborative initiatives between the SMDF and the AFC aimed at catalyzing the development of the mineral sector align directly with President Bola Tinubu’s Renewed Hope Agenda, with a particular focus on foreign direct investment, job creation, and increased fiscal revenues, adding that Nigeria must start the process of solidifying the economy for coming generations by moving away from an oil-dependent economy.
He said, “We have to shift our attention from oil to solid minerals for two critical reasons, which is that oil is fading into national affairs today. In the next few years going forward, if we do not deliberately and critically shift our attention from oil to the solid mineral sector, we will be sorry for ourselves.
“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.
The second reason, he said, 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.
“We don’t want to burn the earth, so everybody is shifting and this is another reason why oil is going down in international economics. 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.”
In her remarks, the executive secretary/CEO of Solid Minerals Development Fund (SMDF), Fatima Umaru Shinkafi, described the partnership between AFC and SMDF as a pivotal step towards harnessing Nigeria’s mineral wealth and repositioning the nation as a key player in the global mining industry.
Shinkafi said: “AFC’s significant investments in various mining projects across Africa underline the organisation’s commitment to advancing the mining sector, including projects in Nigeria such as the Segilola Gold Mine in Osun, the Karowe Diamond mine in Botswana, and the Bon Ami bauxite project in north-western Guinea, which have collectively received more than $900 million in funding since 2014.”
She further noted that “over 90% of Nigeria remains underexplored, with significant potential to discover and increase existing deposits, adding that partnership with AFC and Xcalibur will act as a stimulus for resource exploration activity, derisk resource exploration in Nigeria, and increase the global appeal of Nigeria as a resource exploration destination.”
The SMDF boss explained the significance of the SMDF-AFC collaboration that led to the signing of tri-partite agreements.
“Mining occurs in phases, and you cannot proceed to the final stage where the most capital is required without completing developmental studies,” she said.
Shinkafi expressed concern that most projects are abandoned at the developmental studies, and stated that the initiative supports the critical strategic pillars of the transformation Agenda of the minister of solid minerals development, Dr Dele Alake.
On his part, the president/CEO of AFC, Samaila Zubairu, noted that Nigeria is rich in mineral resources and has immense potential for mining development. However, the lack of available expertise and funding has posed challenges in advancing mining projects.
He said, “Nigeria is renowned for its abundant mineral resources, but the lack of expertise and financing has hampered the advancement of mining projects. To address this issue, AFC and SMDF are joining forces to unlock the vast potential of Nigeria’s mineral wealth. Through this collaboration, we plan to provide investment opportunities and establish a joint project development facility with technical support to guide and fund promising mining projects.”
Zubairu thanked the SMDF, 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.
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