Inadequate access to loan facilities, challenge to solid minerals industry

A key challenge in the solid minerals industry is inadequate access to loan facilities to procure site equipment based on long term loan, the acting Managing Director, Bank of Industry (BOI), Waheed Olagunju has said.

He said this yesterday while presenting a paper titled ‘Enhancing capacity of SMEs in the solid minerals sector: the BOI template at the first northern Nigeria solid minerals fair and workshop organized by Kaduna State Chamber of Commerce, Industry, Mines and Agriculture (KADCCIMA) and PROEDGE Ltd.

According to him, banks favour short term loans as opposed to long term financing required in the mining sector; stressing that high cost of capital remains a huge challenge in the steel industry owing to the capital intensive nature of the sector.

He further identified inability to raise enough equity and the unwillingness of financial institutions to fund the sector as challenges, saying it requires huge capital to set up a steel plant and long gestation period to profitability.

He however made known that the BOI can play a vital role in enhancing capacity in the solid minerals sector while he assured of the bank’s commitment towards assisting genuine investors in providing funding required for setting up mining companies.

Olagunju also commended government’s effort in developing the solid minerals sectors while he stressed the need for infrastructural development, formulation of clear and favourable mining polices, enforcement of existing mining laws and capacity building in the sector.