By Martha Agas
Stakeholders in the mining sector have called for stronger inter-agency collaboration to unlock financing for small-scale mining.
They made the call during a panel session at the 10th edition of Nigeria’s Mining Week, themed ‘Nigeria Mining: From Progress to Global Relevance’, in Abuja.
The discussion, titled ‘Unlocking Small-Scale Mining Finances: The Missing Link between Exploration and Production’, explored innovative financing solutions for holders of Small-Scale Mining Leases (SSML).
In her submission, Mrs Amina Sijuwade, Director of Iron Ore Mining Limited, who acknowledged the difficulties SSML operators face in accessing finance, said that stronger collaboration would improve their ability to secure funding.
Sijuwade explained that holders of SSML often access funding through cluster financing models.
She, however, emphasised the need for catalytic funding, which involved initial financial support from the government or investors to strengthen SSML operations and attract additional investment into the sector.
According to her, relevant government agencies should harmonise policies that reduce mining risks, a critical requirement in strengthening lenders’ confidence in financing the sector.
She noted that many financial institutions lacked an understanding of how the mining sector operated, making it difficult for them to design suitable funding provisions.
On his part, Mr Abubakar Bello, Managing Director, Nigerian Export-Import Bank (NEXIM), noted that the sector was considered high-risk, which has made financial institutions hesitant to extend credit facilities.
Bello added that policy consistency and sector regulatory clarity were key to attracting funding to the sector through investments.
“Investors have to see the future, which they can predict on their investments. Nobody is going to put money where there is high risk,” he said.
He said the challenges confronting the sector had been established and the next steps was de-risking the sector through policy consistency.
Mr Akinrogunde Akintunde, Director, Department of Artisanal and Small-Scale Mining at the Ministry of Solid Minerals Development, said that while the sector had policies in place, more strategies were needed to improve access to funding.
Akintunde identified the lack of information exchange between financiers and miners as one of the major factors limiting access to funding.
He advised miners to specialise in specific areas of the mining value chain, noting that such focus could enhance their eligibility for financing opportunities. (NAN)( www.nannews.ng)
Edited by Gabriel Yough