Africa Finance Corporation (AFC), the continent’s leading infrastructure provider, and the Solid Minerals Development Fund of Nigeria (SMDF), a Nigerian mining-focused development fund, have partnered aimed at de-risking Nigeria’s mining sector and scaling up artisanal mining activities in the country to an industrial level.
The strategic collaboration, which was formalized on Tuesday at the sidelines of Nigerian Mining Week in Abuja, was sequel to a cooperation agreement signed by AFC and SMDF earlier in the year to address the dearth of expertise and funding for early-stage mining projects, thereby paving the way for such projects to reach financial close and full-scale operations.
A news report from the African Press Organization (APO) Group circulated on behalf of the AFC indicated that through this partnership, AFC and SMDF aim to bridge the current gap to unlock the immense potential of Nigeria’s mineral resources.
According to the news report, by pooling their resources and expertise, the two institutions will not only provide investment opportunities but a joint project development facility that includes technical support, ensuring that promising mining projects receive the guidance and funding they need to thrive.
Specifically, one of the key deliverables of the deal is the AFC-SMDF Investment Manual, a comprehensive document that will offer project sponsors a clear understanding of how the joint project development facility operates, its objectives, and the specific requirements for project consideration.
In addition, the manual will also feature an appraisal checklist outlining the criteria that both institutions require for project evaluation.
To streamline the project submission process, AFC and SMDF have created a dedicated portal for project sponsors, which will be managed by PricewaterhouseCoopers (PWC), a renowned global professional services firm, working with renowned Nigerian consulting firms, to screen and conduct initial evaluations after which the projects will be submitted to AFC and SMDF for further assessment.
Similarly, to further improve the mining sector in Nigeria, the partners have also engaged Wood Mackenzie, a leading global research and consulting firm, to undertake a comprehensive study assessing the feasibility of establishing a midstream processing plant in Nigeria. This study will focus on critical minerals such as Lithium, Nickel, and other energy transition metals abundant in the country.
By evaluating the profitability and return potential of midstream and downstream mineral processing projects, the study will create a robust foundation for AFC and SMDF to deploy their balance sheets in order to further de-risk the investment landscape for potential investors.
Commenting on the partnership, President and CEO of AFC, Samaila Zubairu, enthused: “The world needs African resources to fully transition to clean-energy in the long term, and more investment is required to sustainably mine and develop in-continent processing capacity for commodities that are critical to the energy transition. In this regard, we are excited to partner with the Solid Minerals Development Fund of Nigeria to derisk the country’s mining sector. This collaboration signifies our commitment to unlock the vast potential of Nigeria’s mineral resources by leveraging the wealth of our renewable energy sources for local processing, thus fostering sustainable development and economic prosperity in Nigeria and Africa.”
In her remarks, the Executive Secretary and CEO of Solid Minerals Development Fund, Fatima Umaru Shinkafi, said: “We are pleased to deepen our cooperation with the AFC through collaborating on these strategic initiatives to support the Nigerian mining industry. I am incredibly grateful for the Honourable Minister’s support, which has been critical to developing these initiatives. These initiatives align with the Renewed Hope Agenda and the Ministry’s Transformation Agenda of leveraging the mining sector to catalyze economic growth, competitiveness, and job creation.”
Industry experts are optimistic that the partnership between AFC and SMDF will be a pivotal step toward harnessing Nigeria’s mineral wealth and positioning the nation as a key player in the global mining industry.
Since 2014, the AFC has invested more than $900 million in mining projects across Africa, including the Segilola Gold Mine in Osun State, Nigeria, the Karowe Diamond mine in Botswana and the Bon Ami bauxite project in North-Western Guineas.
