World Bank, BoI back Nigeria’s machinery lending initiative for mining sector

World Bank and the Bank of Industry (BoI) are now actively in support of Nigeria’s initiative to secure and lend machinery to help small scale artisanal miners in mechanising and making safer their mineral exploitation and processing operations.

Kayode Fayemi, minister of mines and steel development, stated this Wednesday in Cape Town, South Africa, while addressing a cross section of multinational investors in the mining sector at the annual Investing in African Mining Indaba conference, which started there on February 6 and will end on February 9.

“We are also looking at creating for them a leasing programme, working with our development partner institutions like the BoI, they have already given some access finance to small scale informal mining concerns and are willing to also support that,” the minister said.

In its mining law, Nigeria already has provision for duty free importation of mining equipment.
However, those who currently benefit from this legal provision are large-scale operators, but not the ones using diggers and shovels to look for minerals in the environment.

The minister said “he believes that if we are able to pool them together, working in association with our own miners association, which is the umbrella body of small scale miners in Nigeria, and with the development finance institutions, will be able to get the equipment to them on a leasing arrangement that will then enable them to upscale their activities in a manner that will protect them and the environment, as well as create wealth for them and the country.”

He also explained that, in collaboration with the ministry of environment, “we are trying to promote safer mining practices, such as reducing or stopping the use of mercury in the Nigerian mining sector.”

Nigeria has dedicated funds that small-scale artisanal miners can access as a way of creating platforms where willing development partners can come in to support the nation’s mining sector to grow in anticipation for mutual economic benefits.

One of such financing mechanisms is the solid minerals development fund, which the government says it is talking with the World Bank on the possibility of up-scaling it and making it more accessible to small scale artisanal miners.

“In the first tranche of support that we got from the World Bank, we were able to establish about 50 SMEs cooperatives, which support the work of informal miners but we want to expand this,” Fayemi said.

Another angle at which the Nigerian government is looking is the establishment of vending centres, where informal miners can get better pricing for their mineral finds.

This strategy is aimed at increasing formalization and advancing exploitation skills for a number of people who are involved in informal mining across Nigeria.

As a way of making this work in a sustainable manner, a cooperative licensing arrangement is being worked out for small-scale artisanal miners to give them a better capacity to operate competitively.

This value addition programme that basically looks at the artisanal segment of the mining sector intends to reverse the negative trend where what is earned from mining mostly ends in the hands of middlemen that export in raw form, taking jobs abroad and leaving local miners more impoverished.

To tackle this vicious cycle of poverty among Nigerian local miners, the government has established mineral buying centres with the aim that miners can have modular industrial mineral processing vehicles that will align with their various informal operations.

According to Fayemi, “we feel that the way to go in order to support these artisanal miners needs a beneficiation arrangement locally that will add value to what we get and can also provide a cost reflective market place where they can take it to.”