Solid mineral sector eyes $1.5bn private sector investment

…$1.3bn worth of Nigerian gold illegally shipped to Dubai in 2 years - official

The executive secretary of the Solid Mineral Development Fund (SMDF), Fatima Shinkafi says the Fund looks to unlocking about $1.5 billion worth of investment in the mining sub-sector, leverage its proposed $500 million fund.

Shinkafi stated this while making a presentation on financing options in the mining sector at the ongoing Mining Week in Abuja.

“The SMDF has been structured and positioned and is ready to invest $500 million to unlock $1.5 billion in third party investments and financing in the mining sector. We are here to promote private sector-led investments, although we do have a social investment angle to the fund,” said Shinkafi.

She observed that funding has been a major challenge in the sector, as mining is perceived as high risk by financiers from various financial institutions.

She noted that most financiers were cautious about mining business in Nigeria, explaining further that private capital would remain a challenge, because many of the projects in the country are at stage 1 or 2, “which are the stages where exploration and the feasibility studies take place. We hope to move projects to further stages where financiers are more comfortable to get involved.”

According to Shinkafi, the major mandate of the SMDF is to act as a catalyst to spur development of Nigeria’s mining sector by undertaking targeted sustainable, profitoriented investments and interventions in key areas, in close coordination with stakeholders in the sector.

“We need to do things differently. Often implementation is the problem and an innovative approach is needed such as a combination of tools to solve the problems in the mining sector.”

“The fund will address the financial gaps across the mining value chain, including geoscience activities, exploration, equipment financing, mine development, production, infrastructure and capacity building.” She made it clear that SMDF is “not a commercial bank, but a partner. We co-fund projects.”

Meanwhile, she said the nation’s mining sector could generate $15 billion annually, which also has an estimated value of gold of 1 million ounces to 60 million ounces if scaled up based on an estimated ratio of inferred reserves to inferred resources. “If we were to match the oil and gas production levels the sector would generate annual revenues of $15 billion. This is not something we can continue to ignore”, she said.

According to her, Nigerian gold valued at $1.3 billion has been illegally taken to Dubai in the last two years as informal exports indicate tremendous potential of $2.2 billion worth of gold, tin and lead illegally exported out of Nigeria from 2016-2018.

Shinkafi indicated in her presentation that Nigeria’s artisanal gold production has almost doubled since 2015 without any major investment recorded during the period under review.

She lamented that till date, the country has only produced two percent of the total gold production volume with an estimated 84 metric tonnes in Africa.