Manufacturing and Energy

AFC and Solid Minerals Development Fund of Nigeria Partner to Derisk Mining Industry

On the sidelines of the Nigerian Mining Week in Abuja, the Solid Minerals Development Fund of Nigeria (SMDF), a Nigerian development fund focused on mining, and the Africa Finance Corporation (AFC), the continent’s top infrastructure provider, announced a transformative partnership aimed at derisking Nigeria’s mining sector and scaling up artisanal miners in the nation to an industrial level of operation. By addressing the lack of knowledge and money for early-stage mining projects, this strategic engagement, which comes after a cooperation agreement between AFC and SMDF earlier this year, will pave the road for these projects to attain financial close and full-scale operations.

Nigeria has a wealth of mineral resources and great potential for mining growth. However, it has been difficult to advance mining operations due to a lack of available financing and experience. By bridging this gap, AFC and SMDF hope to realize the enormous potential of Nigeria’s mineral riches. By combining their resources and knowledge, these two eminent organizations will not only offer investment options but also a joint project development facility with technical support, guaranteeing that prospective mining projects get the support and money they require to succeed.

The AFC-SMDF Investment Manual is one of the collaboration’s major outputs. Project sponsors will gain a thorough grasp of the joint project development facility’s operations, goals, and particular needs for project consideration from this in-depth paper. An evaluation checklist defining the standards that both institutions want for project evaluation will also be included in the document.

AFC and SMDF have developed a specific portal for project sponsors in order to expedite the project submission procedure. With the help of reputable Nigerian consulting businesses, PricewaterhouseCoopers (PWC), a well-known international professional services organization, will run this portal and screen and do preliminary evaluations. Projects will then be submitted to the AFC and SMDF for additional evaluation.

AFC and SMDF have also hired Wood Mackenzie, a top worldwide research and consulting organization, to conduct a thorough study evaluating the viability of creating a midstream processing plant in Nigeria in order to further boost the country’s mining industry. This research will concentrate on important minerals like lithium, nickel, and other abundant energy transition metals found in the nation. The study will build a strong basis for AFC and SMDF to use their balance sheets in order to further de-risk the investment environment for potential investors by evaluating the profitability and return possibilities of midstream and downstream mineral processing projects.

The world needs African resources to fully transition to clean energy in the long run, and more investment is needed to sustainably mine and develop in-continent processing capacity for commodities that are essential to the energy transition. Samaila Zubairu, President & CEO of AFC, commented on this ground-breaking partnership. In order to derisk the nation’s mining industry, we are thrilled to collaborate with the Solid Minerals Development Fund of Nigeria. By utilizing the abundance of our renewable energy sources for local processing, we will be able to fully realize the enormous potential of Nigeria’s mineral resources, promoting sustainable development and economic prosperity in both Nigeria and Africa.

Solid Minerals Development Fund’s CEO and Executive Secretary, Fatima Umaru Shinkafi, stated: “We are glad to strengthen our cooperation with the AFC by working together on these important initiatives to promote the Nigerian mining sector. I am really appreciative of the Honourable Minister’s assistance, which was essential to the creation of these projects. These programs support the Ministry’s Transformation Agenda and the Renewed Hope Agenda’s goal of using the mining industry to spur economic development, competitiveness, and job creation.

This alliance between AFC and SMDF is a crucial step in utilizing Nigeria’s mineral endowment and elevating the country to a significant player in the world mining market. The Segilola Gold Mine in Osun, Nigeria; the Karowe Diamond Mine in Botswana; and the Bon Ami bauxite project in northwest Guineas are just a few of the mining projects in Africa in which the Corporation has committed more than $900 million since 2014.

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