AFC to revamp gold mining project in southwest Nigeria with $78M

OSAM IYAHEN, HEAD OF natural resources of African Finance Corporation (AFC) has announced that the company would invest the sum of $78 million to develop and advance gold mining project in southwest Nigeria and $500 million in revamping the mining sector in countries in Africa where mining activities have been abandoned by mining companies.

The $78 million investment is a debt-equity package in collaboration with the Vancouver-based Thor Explorations Limited.

Osam added that the $500 million would be in carrying out smelting projects in countries and in value addition of the mineral resources to the continent.

Countries captured in the revamping include Mali, Burkina Faso, Gabon and the Democratic Republic of Congo.

According to Begna Gebreyes, senior vice-president of investments, AFC, he said that the mining sector in the continent remains attractive with lots of investment opportunities despite the poor performance of the global commodity prices as a result of the protracted U.S.-China trade dispute.

Gebreyes, while speaking at the just concluded mining conference in the Nigerian capital, Abuja, he added that the company which owns 10 percent equity in the continent’s mining sector hopes to double within three to five years and also to ramp up its balance sheet to $10 billion by 2025.

“We are not accelerating indiscriminately, we are picking our spots. We see a lot of great untapped assets in what others may consider unattractive neighbourhoods,” said, Gebreyes.

As developed economies shifts to renewable energy, Gebreyes alluded that Africa is still the preferred destination in getting mineral resources such as cobalt, nickel, and manganese for the developed economies to produce technologies that are aligned with renewable energy.

In past years in Nigeria, there have been series of illegal mining activities by some scrupulous individuals who have refused to go through due process in conducting mining activities and that has crippled the country’s mining sector to remain unattractive which has resulted to loss of billions of dollars of revenue into the country’s treasury.

Moreover, there have been several advocacies by industry experts and analysts urging the federal government to take its hands off the mining sector for capable hands but the government maintains its position in controlling the mining sector, this no doubt has been a major challenge in the country’s mining sector from not achieving its full potentials in becoming a top revenue generator.

According to industry data, the country’s mining sector revenue generation has been on a decline in four consecutive years from 2016. The total revenue to the country’s Gross Domestic Production (GDP) from the sector account to only 0.03 percent which is been overshadowed by the vast oil resources.

Similarly, GDP from mining in the country declined to N1, 514,641.20 to N1, 491,129.02 in the second quarter of 2019 but witnessed an all-time high in the first quarter of 2011 with a figure N2, 406,675.90, while its lowest record ever was in the fourth quarter of 2016 at N1, 228,692.98.

However, AFC’s investment plan in the country is coming at a time when the global gold price is experiencing an unfavourable period due to geopolitical tensions between the east and the west but that may not hinder the revamping of the sector as there are more and ever-expanding markets for natural resources globally as technology advances.