Africa Finance Corporation Launches Strategic Partnerships to Boost Mining Sector in Nigeria and Other African Countries
Africa Finance Corporation (AFC) has recently announced a series of strategic partnerships aimed at bolstering the mining sector in Nigeria and other African countries. This move is part of AFC’s efforts to drive substantial capital flow into the continent, particularly in the mining of precious metals and critical minerals.
In 2024, Thor Explorations Ltd secured rights to explore over 600 square kilometers in Nigeria’s Oyo, Kwara, and Ekiti lithium project areas. This marked a significant development, particularly with the identification of substantial lithium pegmatite occurrences in the West Oyo site. Consequently, AFC has signed an expression of interest with Thor Exploration for the development of this project, illustrating the corporation’s commitment to supporting the establishment of Nigeria’s first large-scale lithium mine.
The initiative to develop a large-scale lithium mine in Nigeria is particularly important as it plays a pivotal role in advancing global energy transition objectives, solidifying Nigeria’s position as a key enabler of renewable energy. Moreover, AFC’s investment in Thor Explorations, totalling $86 million towards the Segilola Gold Mine, highlights the corporation’s dedication to supporting significant mining projects in Nigeria.
Additionally, AFC and the Solid Mineral Development Fund (SMDF) commissioned Wood Mackenzie to conduct a comprehensive study to assess the feasibility of establishing a midstream processing plant in Nigeria. The study revealed that such a plant would substantially enhance the country’s capacity for foreign exchange generation and create thousands of local jobs. The focus of the study was on processing critical minerals such as lithium, cobalt, and manganese, all of which are vital for various industries.
Chief Investment Officer at Africa Finance Corporation, Sameh Shenouda, emphasized the corporation’s commitment to addressing the significant funding gap in the African mining sector. He stressed that less than five per cent of global development funding is currently invested in African mining projects, despite the continent’s abundant mineral resources. Shenouda also highlighted the importance of partnerships with like-minded stakeholders in opening up new markets, promoting a greener economy, and contributing to the overall development of African countries.
AFC has also signed an expression of interest with Gécamines, the largest mining company in the Democratic Republic of Congo, to develop certain assets in the mining sector in DRC, including critical minerals. Another significant partnership is with Giyani Metals for the financing of a high purity manganese (HPM) mine and plant in Botswana, which is a rare venture in Africa. This move is especially important as HPM is a critical mineral for batteries used by electric vehicles, aligning with the global transition towards a more environmentally friendly economy.
Furthermore, AFC has announced the successful closure of a $55 million mezzanine debt facility for FG Gold Limited, facilitating the commencement of construction for the Baomahun Gold Project in Sierra Leone. This project is expected to contribute approximately 10 per cent to Sierra Leone’s Gross Domestic Product (GDP) and generate 900 direct and indirect job opportunities within the country.
The corporation has also executed the senior debt term sheet for Nyanza’s 80,000 tonnes per annum (TPA) TiO2 pigment plant in Richard’s Bay Industrial Development Zone, valued at $780 million. This significant venture is poised to add value to the region’s abundant titanium ore, historically exported without any value addition.
In conclusion, AFC’s recent strategic partnerships and investments in the mining sector across Africa reflect the corporation’s dedication to driving sustainable growth and development in the continent. These initiatives not only contribute to the energy transition and the global shift towards environmentally friendly technologies but also create significant economic opportunities for African countries.
