By Yemi Olakitan
Nigeria’s stocks of vital minerals, like lithium, manganese, and nickel, are in high demand due to the worldwide push for green energy solutions, prompting the government to announce a number of programmes that will accelerate foreign direct investment into the industry.
Solid Minerals Development Fund, the Nigerian mining sovereign wealth fund, and the Africa Finance Corporation (AFC), a pan-African multilateral development financial institution, partnered on February 8. (SMDF).
The partnership’s goal is to hasten commercial-scale, privately-led mining operations by providing crucial financial support and technical guidance.
According to SMDF estimates, Nigeria’s mining sector has 44 different types of commercially viable minerals worth an estimated $700 billion, but the west African country has struggled to capitalise on its reserves due to a lack of capital investments, inadequate geo-mapping tools, and widespread illegal mining.
SMDF CEO Hajiya Shinkafi said, “We will target all these minerals and more.”
Excellent lithium possibilities have been found in Nigeria as a result of ongoing exploration operations, which we will support.
The absence of effective geoscientific data collection methods is one of the main problems impeding the sector’s progress.
Corporations have depended heavily on illegal mining practises for many years to learn about the types, availability, and locations of minerals.
Segun Lawson, CEO of Thor Exploration opined that a mining company that is listed on the Canadian exchange and is in charge of AFC’s flagship gold mine project in Nigeria, “Historically, it’s actually been one of the main pathfinders for a lot of junior mining companies to make these discoveries.”
Larger firms then follow on the heels of these modest discoveries, he continues, because “these illegal miners are mining at a much lower scale with rudimentary technologies.”
According to a UN investigation, illegal mining was the root cause of a lead poisoning epidemic that killed at least 200 children and affected 18,000 people in 2010.
Artisanal miners continue to dominate mining activity in Nigeria’s north-western regions, unfazed by the risks involved.
Nonetheless, Mr. Lawson notes that artisanal and illegal mining is widespread throughout west Africa and is not just present in Nigeria.
Foreign investors have been deterred by reports of banditry and insurgencies in a number of mining regions, including the states of Zamfara and Kaduna in Nigeria.
A local terror organisation in Zamfara’s Bukuyum local government area threatened to attack a gold mine in November 2022 after miners failed to pay a 10% charge.
Nigeria’s minister of mines and steel development said in a local interview last month that “because to the size of Nigeria, we do not have the means to pre-empt all these unlawful actions.”
In order to give the industry more legitimacy, the government has shifted its attention to data collection initiatives.
The Nigerian government has taken steps to enable a more precise delineation of the types and quantities of minerals available by utilising a funding programme with the World Bank to advance airborne geo-mapping exercises, according to Osam Iyahen, senior director and head of natural resources at AFC, who speaks with fDi.
The Nigerian government is also funding a significant number of infrastructure projects to create transportation links for the evacuation of minerals for sale and export as well as the transit of equipment to mining areas.
The development organisation worked with Thor Explorations to finance the Segilola Gold Mine before forming a relationship with AFC and SMDF.
The mine, which will begin commercial production in 2021, is currently the most advanced gold project in Nigeria.
The CEO of the company understands the difficulties that mining projects encounter but expects that the company’s success would spur foreign investment in the nation.
According to statistics, there are very few conversions from an exploration licence to a discovery.
The number is significantly smaller when comparing an exploratory licence to an operation licence, according to Mr. Lawson.
But he also says that “continuous exploration and more success stories will only fuel the sector’s expansion.”