Potential of Nigeria’s mining sector hampered by poor finance

Poor entry to finance has been recognized as a significant hindrance to the expansion and improvement of the Nigerian mining sector, in line with the President of the Nigerian Mining and Geosciences Society (NMGS), Akinade Olatunji.

Mr Olatunji, in an interview with PREMIUM TIMES, famous that the present financing mannequin within the sector isn’t sustainable.

“As a result of we don’t have a mining ecosystem that’s mature, it’s tough for folks to get finance. So, financing the sector has been extra of ad-hoc, household sort of borrowing and all that stuff, and that’s not sustainable. You may also not run mining exercise with a sort of two-digit rate of interest we run Nigeria. No one does that anyplace on the earth,” Mr Olatunji mentioned.

He defined that the funding to run exploration work is often throughout the first 5 per cent rate of interest.

“Generally even lower than that, as a result of they see it as a long-term funding, however there’s no Nigerian financial institution that provides you with that sort of mortgage. Everyone knows what Nigerian banks are serious about, and it’s due to lack of awareness, even on their very own half. So, financing has been very problematic,” he mentioned.

To deal with this, he mentioned personal sector pushed funding is the way in which ahead.

“However significantly talking, the sort of funds that’s wanted for the mining sector needs to be personal sector pushed, needs to be personal funds. And that’s why I like the concept by the minister who says that Nigerian mining corporations also needs to start to take a look at the chance of making their very own banks. It’s not unimaginable. If two to 5 mining corporations who’ve executed very nicely pull sources collectively and say, let’s all arrange a mining improvement financial institution. It will likely be simpler for them as a result of they perceive the intricacies of the sector. It gained’t be just like the sort of banks we now have now. Nigerian banks now, 90 per cent of them simply wish to do container imports, import financing. That can by no means work within the mining sector. So, finance is essential,” he added.

Mr Olatunji mentioned regardless of being richly endowed with mineral sources, Nigeria’s mining sector lacks vital funding.

“Once we speak about mineral sources, we all know that Nigeria is blessed. We’re wealthy. Regardless of these mineral sources, it’s actually so unhappy that we don’t have that massive funding within the sector. Once I say funding, by way of having massive mining actions occurring. The closest we now have is the Segilola, which is that this gold,” he mentioned.

Talking on the function geologists play within the sector, he mentioned the consultants are very key to discovering the place the minerals are.

However to seek out the minerals, he mentioned there’s a want for a structured strategy.

“A structured strategy to do that may very well be geophysical, geochemical, no matter. However it’s essential to have a structured exploration strategy to discovering the place the minerals are. Not solely discovering the place the minerals are, discovering the amount and high quality of the minerals. As a result of it’s not all mineral occurrences which can be worthwhile to win. So, earlier than you get to a stage whereby mineral prevalence turns into a useful resource so that you can mine, a number of investigation is concerned. And that is the work that geologists do.”

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He added that the NMGS is the umbrella skilled society for all geoscientists, noting that the society was based 15 January 1961 by ten people.

“Seven of them have been mining engineers, two metallurgists, and one geologist. And through the years, the society has been concerned in coverage advocacy, coverage assist, and naturally in molding opinion within the geoscience and mining occupation,” he mentioned.