FG Signs MoU with AFC to Boost Mining Industry Investment

Folalumi Alaran in Abuja

In a significant move to revamp Nigeria’s solid minerals sector, the Federal Government, through the Ministry of Solid Minerals Development, has signed a Memorandum of Understanding (MoU) to join forces with the Africa Finance Corporation (AFC) to enhance data gathering for de-risking investments in the mining industry.

Speaking at the signing event, the Minister of Solid Minerals Development, Dele Alake, said the partnership will ensure proper harnessing of the solid minerals resources in the country.

The ministry mentioned that the lack of political will from previous administrations in the last decades frustrated the realization of Nigerian vast mineral resources.

The event which was jointly organized by Africa Finance Corporation (AFC) and the Solid Minerals Development Fund (SMDF) in connection with Nigeria Mining Week in Abuja, was themed ‘Unlocking Development Financing for Nigerian Mining Projects’.

Alake stressed that Nigeria must start the process of solidifying the economy for coming generations adding that the conducive environments in developed communities were sacrifices of past generations.

According to him, Nigeria is in the present situation due to the adoption of a monocultural style of economy, stressing that if the country refuses to shift to solid minerals, it would be regrettable in future.

He also stated that the splitting of the former Ministry of Mines and Steel Development by the present administration is to begin the creation of specific policies and measures that would enable conducive environments for the judicious exploration of these critical sectors of our economy

Alake also noted that the collaborative initiatives between the SMDF and the AFC aimed at catalyzing the development of the mineral sector. And that these initiatives align directly with President Bola Tinubu’s Renewed Hope Agenda, with a particular focus on foreign direct investment, job creation, and increased fiscal revenues. The agreement emphasized the importance of establishing processing centers to concentrate on value-added products as part of the recently announced Transformation Agenda.

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.

“Though we may not suffer that much, what about our children, the coming generation, We have an important duty to ensure that we solidify the Nigerian economy structure for the coming generation. At any little excuse we run to developed communities to enjoy the facilities,in a very conducive social atmosphere but have we ever thought of those things that we go there to enjoy were made possible by the sacrifice of generations before now in those societies.

“This is why our generation today must make a conscious effort to ensure that we leave a legacy of prosperity, social conducive environment for our coming generations,that is the economy survives,” he added.

On the other hand, the Executive Secretary and CEO of SMDF, Fatima Umar Shinkafi, stated that over 90 percent of Nigeria’s endowment has remained under exploration with significant increase in new discoveries.

Shinkafi added that the SMDF’ and AFC would support the globally recognized expertises within the Nigerian Geological Survey Agency to improve the understanding of Nigeria mineral resource potential and ensure a solid pipeline for future projects.

She added that the partnership between AFC and SMDF’ is a pivotal step towards harassing Nigeria’s mineral wealth and repositioning the nation as a key player in the global mining industry.

She added, “ This collaboration signifies a major step towards harnessing Nigeria’s mineral wealth and positioning the nation as a key player in the global mining industry. AFC’s significant investments in various mining projects across Africa underline the organization’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 said.

Earlier the President & CEO of AFC, Samaila Zubailu, Said, “Nigeria is renowned for its abundant mineral resources, but the lack of expertise and financing has hampered the advancement of mining projects.”

He continues, “ 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.”

Zubailu further noted that one of the noteworthy outcomes of this partnership is the creation of the AFC-SMDF Investment Manual. This comprehensive document will outline the operational framework, objectives, and criteria for project consideration. Additionally, AFC and SMDF have introduced a dedicated portal managed by PricewaterhouseCoopers (PWC) to streamline project submissions and evaluations.

He said, “ To further enhance the mining sector, AFC and SMDF have enlisted Wood Mackenzie to conduct a comprehensive study on the feasibility of establishing a midstream processing plant in Nigeria, focusing on critical minerals such as Lithium, Nickel, and other energy transition metals abundant in the country. This study aims to assess profitability and return potential for mineral processing projects, thereby reducing investment risks for potential investors.”