Africa Surveyors January-February issue 2023 digital
Africa Surveyors is Africa’s premier source of Surveying, Mapping and Geospatial news and an envoy of surveying products/service for the Construction, Maritime, Onshore & Offshore energy and exploration, Engineering, Oil and Gas, Agricultural and Mining sectors on new solution based trends and technology for the African market.
Africa Surveyors is Africa’s premier source of Surveying, Mapping and Geospatial news and an envoy of surveying products/service for the Construction, Maritime, Onshore & Offshore energy and exploration, Engineering, Oil and Gas, Agricultural and Mining sectors on new solution based trends and technology for the African market.
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MINING
Reviving Nigeria’s neglected
$700bn mining sector
By Natasha Teja
Amid the global push for green
energy solutions, Nigeria’s reserves
of critical minerals such as lithium,
manganese and nickel are in high demand,
prompting the government to release a series
of initiatives that will fast-track foreign direct
investment into the sector.
On February 8, the Africa Finance Corporation
(AFC), a pan-African multilateral development
financial institution, established a partnership
with the Nigerian mining sovereign wealth
fund, Solid Minerals Development Fund
(SMDF). The partnership aims to accelerate
commercial scale, private sector-led mining
projects by providing much-needed funding
and technical advisory.
Nigeria’s mining sector boasts 44 different
types of commercially viable minerals
worth an estimated $700bn, according
to SMDF estimates; but limited capital
injections, inadequate geo-mapping tools and
widespread illegal mining have left the west
African nation struggling to capitalise on its
reserves.
Hajiya Shinkafi, CEO of SMDF tells fDi: “We
will target all these minerals and more.
Ongoing exploration efforts in Nigeria have
identified excellent lithium prospects that we
will look to support.”
Ongoing exploration efforts in Nigeria have
identified excellent lithium prospects that we
will look to support.
Hajiya Shinkafi, CEO at SMDF: "One of the key
issues stalling the sector’s growth is the lack
of sophisticated geo-scientific data gathering
tools. For decades, corporations have largely
relied on illegal mining activities to gather
information on the types, quantities and
locations of minerals available."
“Historically, it’s actually been one of the
main pathfinders for a lot of junior mining
companies to make these discoveries,” says
Hard work:
Nigeria’s
resource-rich
regions have
long been
exploited
by illegal
mining
operations.
Image via
Mercury
Bloomberg
Segun Lawson, CEO at Thor Explorations — a
Canada-listed mining firm that heads AFC’s
flagship gold mine project in Nigeria.
“These illegal miners are mining at a much
smaller scale with rudimentary methods,
and then larger corporations are following
off the backs of these small discoveries,” he
adds. Illegal mining caused an outbreak of
lead poisoning in 2010 that affected 18,000
people and killed at least 200 children,
according to a report by the UN. Unfazed
by its risks, artisanal miners continue to
dominate mining activities in Nigeria’s northwestern
regions. “However, if you look across
west Africa there are a lot of artisanal and
illegal mining, it’s not just unique to Nigeria,”
Mr Lawson says.
Reports of banditry and insurgencies across
several mining areas, including Nigeria’s
states of Zamfara and Kaduna, have also
discouraged foreign investors. In November
2022, a local terror group threatened to
attack a gold mine in the Bukuyum local
government area of Zamfara after miners
refused to pay a 10% levy.
During a local interview conducted last
month, Nigeria’s minister of mines and steel
development admitted that “we do not have
the resources to pre-empt all these illegal
activities because Nigeria is vast”.
Instead, the government has turned its focus
on data gathering projects to add legitimacy
to the sector. Osam Iyahen, senior director and
head of natural resources at AFC, tells fDi that
“the Nigerian government has taken steps
to enable a more accurate delineation of the
types and quantities of minerals available by
tapping into a funding programme with the
World Bank to advance airborne geo-mapping
exercises”.
The Nigerian government is also supporting
a large number of infrastructure initiatives to
build transportation links for the movement
of equipment to mining sites and the
evacuation of minerals for sale and export.
Prior to AFC’s partnership with SMDF, the
development institution collaborated with
Thor Explorations to finance the Segilola
Gold Mine. The mine is currently Nigeria’s
most advanced gold project after achieving
commercial production in 2021.
The company’s CEO hopes that its success will
catalyse foreign investments into the country,
but acknowledges the challenges that mining
projects face.
“Statistically speaking, the number of
conversions from an exploration license
to a discovery is very low. Then from an
exploration to an operation license, that
number is even lower,” says Mr Lawson.
However, he adds: “Consistent exploration and
more success stories will only lead to further
growth in the sector.”
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January-February issue l 2023 33