The Ministry of Mines and steel Development has signed a Memorandum of
Understanding (MoU) with the Bank of Industry (BOI) for the management of
a N5 billion fund in support of Artisanal and Small Scale Miners in the
country.
Under the arrangement, the Ministry would contribute N2.5billion which
would be matched by another N2.5 billion by BOI.
A certified Artisanal Scale miner, under the scheme, can access between
One hundred thousand naira and ten million naira; while a Small Scale
Miner can access between ten million naira and one hundred million naira.
The MOU was signed by the Minister of Mines and Steel Development, Dr
Kayode Fayemi and the Managing Director/CEO of Bank of Industry, Mr
Olukayode Pitan, in Abuja on Tuesday. The event was witnessed by the
Minister of State for Mines and Steel Development, Hon Abubakar Bawa
Bwari, Permanent Secretary of the Ministry, Mohammed Abass and Chair of
the board of the Solid Minerals Development Fund, Alhaji Uba Saida Malami.
Speaking at the event, Dr Fayemi said the development is aimed at
addressing the issue of insufficient funding and access to capital, which
is a major factor militating against Artisanal and Small Scale miners who
account for about 80 per cent of activities in the mining sector.
According to the Minister, the Bank of Industry would serve as the
custodian and manager of the fund, which would be given to the artisanal
and small scale miners at five per cent interest.
Dr Fayemi said: “This agreement is a meeting of minds between the FMMSD
and the BOI. We are in the first instance launching a N5Billion fund. With
our ministry’s pilot contribution of N2.5Billion, BOI will match our
contribution with another N2.5Billion.
“Consequently, with this agreement, the FMMSD appoints BOI as the
Custodian and Manager of the Nigerian Artisanal and Small-Scale Miners
(ASM) Financing Support Fund, for the purpose of financing artisanal and
small scale mining projects involving Industrial Minerals, Precious
Stones, Precious Metal (Gold), Dimension Stone and such other strategic
minerals in Nigeria as shall be approved by the ministry and BOI from time
to time.”
The Minister said that the fund would be available in the form of Term
Loans or Working Capital to be utilized for the Purchase of requisite
items of plant and machinery; Payment for drilling, geological and other
services related to mining business as may be required, among others.
He added that proper funding would help to integrate the Artisanal and
Small-Scale Miners into the formal sector, enhance their growth and
development in a structured manner, and spur productivity and job creation
in the mining sector.
Speaking further, the Minister said, “The single obligor limit of loans to
be granted under the Fund shall be from N100,000.00 to N10,000,000.00 for
Artisanal Scale Miners; and from N10,000,000.00 to N100,000,000.00 for
Small Scale Miners.
“The loans would be made available to certified industry participants at a
single digit interest rate of 5% per annum, which is by far about the most
attractive within our jurisdiction.
“In addressing the challenge of Insufficient Funding and lack of access to
capital, the ministry secured approval for N30bn (approx. $100m) from the
mining sector component of the Natural Resources Development Fund from the
FGN. We also secured the World Bank’s approval for $150 million to support
the ministry’s Mineral Sector Support for Economic Diversification
(MinDiver) program.
“The Solid Minerals Development Fund (SMDF) is now spearheading the
assembling of a $600M investment fund for the sector, working with
entities such as the Nigerian Sovereign Investment Authority, the Nigeria
Stock Exchange and others. This is a departure from the past, judging by
the fact that in 2015, out of the meagre N1 billion allocated to the
ministry, only N352 million was released.
“It is noteworthy that in addition to funding support from multilateral
agencies, partnerships on technical cooperation have also been brokered or
re-activated with several foreign governments. Existing technical
partnerships have been operationalised with the governments of South
Africa, China, Australia, Canada, the United Kingdom and the United States
of America. Nigeria now takes the lead in regional efforts to develop
mining, especially within the framework of the Africa Mining Vision”
The CEO of Bank of Industry, Mr Pitan in his response said the Bank was
convinced that the fund would step up a rapid development in the mining
sector, just as a similar funding arrangement administered by the BOI
boosted the country’s movie sector.
He said BOI is a pioneer in the area of funding mining activities where
other banks are reluctant to invest. He, however stated that the Fund is
not an aid, but repayable by beneficiaries.
The Minister of State for Mines and Steel Development, Hon Abubakar Bawa
Bwari, would head the Project Management Committee which includes BOI
officials with expertise in Mining Finance and Project Supervision. The
committee is charged with the responsibility of appraising, recommending,
disbursing, implementing and monitoring the projects as well as recovering
the loans and interests from the approved projects.