Nigeria’s mining sector, valued at $700 billion, is gaining attention due to global demand for critical minerals like lithium, manganese, and nickel. In response, the government is introducing initiatives to boost foreign direct investment. A notable partnership between the Africa Finance Corporation (AFC) and the Solid Minerals Development Fund (SMDF) aims to finance and provide technical support for private sector-led mining projects.

Despite Nigeria’s rich mineral resources, issues such as limited funding, poor geo-mapping tools, and illegal mining activities hinder growth. Hajiya Shinkafi, CEO of SMDF, stated that exploration efforts are revealing excellent lithium prospects. Currently, corporations rely on illegal mining for geo-scientific data, leading to vulnerabilities in official mining operations.

Segun Lawson, CEO of Thor Explorations, noted that illegal miners often pave the way for larger corporations by making initial discoveries. This problem is compounded by the impact of illegal mining, which caused a significant lead poisoning outbreak in 2010, affecting 18,000 people. Despite the risks, artisanal mining continues in north-western Nigeria.

Banditry and insurgency threaten investments in areas like Zamfara and Kaduna. Nigeria’s minister of mines acknowledged limitations in controlling illegal activities due to the country’s vastness. The government is now focusing on enhancing data gathering to legitimize mining and has partnered with the World Bank for airborne geo-mapping initiatives.

Moreover, infrastructure improvements are underway to facilitate mineral transportation and excavation. Prior to teaming with SMDF, AFC supported the Segilola Gold Mine, Nigeria’s leading gold project, which started commercial production in 2021. Lawson hopes that ongoing successes will attract more foreign investments, despite acknowledging the challenges in transitioning from exploration to operational licenses.

Nigeria’s mining sector, though rich in potential, faces significant challenges from illegal mining and lack of data. New initiatives from the government and partnerships like that of AFC and SMDF aim to inject funding and expertise into the sector. Infrastructure improvements and accurate geo-mapping are critical for attracting foreign investment and achieving growth, despite existing threats from insurgency and operational inefficiencies.

Original Source: www.fdiintelligence.com

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