• Monday, December 02, 2024
businessday logo

BusinessDay

Relief for mining sector as new institution on the way to ensure funding

Industry players want Nigeria’s mining sector positioned for economic growth

Proceeds from solid minerals export contributes significantly which make a strong case for special focus on Nigeria’s mining sector and its potentials.

Relief is on the way for the extractive minerals sector in Nigeria as a multilateral development finance institution is being established to ensure focused and concerted funding of the critical sector.

The institution, known as African Extractive Minerals Development Bank (AEMBank), is borne out of the necessity to swiftly enhance and structure, in an efficient manner, the entire value chain of the mining sector.

Recently the African Minerals Strategy Group (AMSG) entered into a collaboration agreement and became a shareholder in the bank. Expectation is that AEMbank will provide a seismic shift in the funding of this critical and highly untapped sector.

AMSG has, as founding members, 16 African countries and its main policy objective is to promote the growth and development of the sector within Africa. In addition, the Commonwealth Enterprise and Investment Council is engaged as a strategic partner.

Transaction advisors and seed investor, CLG Securities Limited, a pan African focused Advisory firm, disclosed that the bank is essentially formed on public private partnership (PPP0) principles and seeks to eliminate the pit to port mentality of most mining activities.

It will rather assist in creating a deep value chain where value addition, beneficiation and industrialisation are the core tenets.
Given the aggressive demand for critical materials which are essential in the energy transition phase to renewables, Africa has become a very important market and all efforts must be made to ensure maximum benefits to its people.
Job creation, indigenous empowerment, sovereign revenues enhancement, forex generation will be some of the key objectives. Funding is critical to the development of the sector and it is expected that the bank will cover this gap.

The bank will also assist sovereigns in leveraging their mineral reserves to shore up their currencies and become tradeable. Major interest has been expressed by institutional investors, other DFIs and private investors in engaging and becoming active stakeholders in the Bank.

SENIOR ANALYST - REAL ESTATE

Join BusinessDay whatsapp Channel, to stay up to date

Open In Whatsapp