• Secures presidential approval to access Natural Resource Fund
• W’Bank to also support transactions in mining sector
The
Minister of Solid Minerals Development, Dr. Kayode Fayemi, has
disclosed that he is currently negotiating a $500 million investment
fund with the Nigerian Sovereign Investment Authority (NSIA), managers
of Nigeria’s Sovereign Wealth Fund, to support a long term development
plan for the country’s mining sector.
Speaking
with THISDAY in an exclusive interview at the weekend in Abuja, Fayemi
said the Federal Executive Council (FEC) in August approved a new
roadmap for the development of the mining sector, adding that with a
proactive execution of the roadmap, the sector was expected to
contribute up to $27 billion to Nigeria’s Gross Domestic Products (GDP)
ratio by 2025.
He
said it was based on the targets of the roadmap that the discussion
with the NSIA was initiated, an approval by President Muhammadu Buhari
for the sector to access funds in the Natural Resource Fund obtained, and other funding supports gotten.
The
minister stated that as part of the other funding supports for the
development of the mining industry, the World Bank has indicated its
willingness to provide funding to help the sector’s transactional
activities.
“Yes,
it is hugely capital intensive and if we are going to make a
significant headway in the manner that the president has often spoken
about, we need to put a lot more weight on access to finance by serious
players in the sector and we have gone about this in a multipronged
manner,” said Fayemi.
He
stated: “The first is that for the first time, the president is
granting us access to benefit from the Natural Resource Fund which is
1.6 per cent of the Federation Account, similar to the Ecological Fund,
UBEC Fund and it is there primarily for the use of agriculture, mining
and water resources.
“I
don’t know how much is there now but it is automatically deducted and
it is not small money. Depending on what we approach the federal
executive council to release to us from there based on our work, we have
decided that it should go for exploration because that is the most
capital-intensive part of mining.
“We
are also in discussion with the Nigerian Sovereign Investment Authority
to put together a mining investment fund. About $500 million, and it is
looking good even though we are in discussion and have not finalised
yet. They are getting a lot of interest from private capital, equity
funds venture capital and I believe this will complement whatever will
come from the Natural Resource Fund.”
He
added that: “Outside of that, we are also talking with the World Bank
to support actual transaction activities – those who are already in
exploration and just about to move into production but don’t have enough
funds, and this will be like a support fund for such activity across
the sector.”
“We
believe because we are starting from below zero, the major miners will
come in once they see that things are beginning to be discovered, they
will begin to refocus their interest on Nigeria,” he added.
The
Natural Resource Fund, which was reportedly set up by the Revenue
Mobilisation Allocation and Fiscal Commission (RMAFC) in 2001 for the
development of alternative natural resources outside oil and gas, is
domiciled in the Central Bank of Nigeria (CBN).
Fayemi
said the roadmap would first focus on re-establishing an accurate
geological survey of Nigeria’s mineral potentials to enable for bankable
investment decisions, reform the sector’s regulatory and licensing
regimes, then push for in-country mining and processing of solid
minerals to meet local demands, before launching out to the global
market as a standard mineral mining and processing country.
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