FG inaugurates N5bn funding support for artisanal, small scale miners

FG inaugurates N5bn funding support for artisanal, small scale miners

Tuesday, August 29, 2017 11:03 pm

Dr Kayode Fayemi

The Federal Government on Tuesday inaugurated a N5 billion special fund for the development of artisanal and small-scale miners in the country.

The Minister of Mines and Steel Development, Dr Kayode Fayemi at the inauguration of the fund in Abuja, said the fund would boost operation of the miners.

The inauguration also witnessed the signing of a Memorandum of Understanding (MoU) with the Bank of Industry (BoI) for the management of the fund.

Under the arrangement, the ministry would contribute N2.5 billion as pilot support which would be matched by another N2.5 billion by BoI.

“Consequently, with this agreement, the ministry appoints BoI as the Custodian and Manager of the Nigerian Artisanal and Small-Scale Miners (ASM) Financing Support Fund.

“The purpose is to finance artisanal and small scale mining projects involving Industrial minerals, precious stones, precious metal (gold), dimension stone and such other strategic minerals in Nigeria.

“The fund will be used to finance the projects and other projects as approved by the ministry and BoI from time to time,’’ he said.

The minister said that the fund would be available in the form of term loans or working capital to be utilised for the purchase of requisite items of plant and machinery.

He said it would also be used for the payment of drilling, geological and other services related to mining business as may be required and working capital for purchase of materials and other expenses.

“The single obligor limit of loans to be granted under the Fund shall be from N100,000 to N10 million for artisanal scale miners and from N10 million to N100 million for small-scale miners.

“The loans would be made available to certified industry participants at a single digit interest rate of five per cent per annum, which is by far about the most attractive within our jurisdiction.’’

According to him, the ministry will match the BoI’s efforts with its renewed sense of patriotism, zeal and competence, to ensure the initiative leads to tangible success stories of artisanal and small-scale miners.

He said that the support would be able to transit into more established miners thereby boosting their capacity to participate in the development of the mining sector.

In addition, he said that the support would facilitate the creation of an enabling environment that would attract more international investment in the country.

Fayemi said the Nigerian Artisanal and Small-Scale Miners (ASM) Financing Support Fund, under the ASM scheme was designed to achieve some strategic objectives.

He said it was designed to achieve objective of playing a catalysing role in unlocking funding to the mining sector and provides provide alternative source of finance for Artisanal and Small-Scale Miners.

“It has the objective of integrating the artisanal and small-scale miners into the formal sector and enhance their growth and development in a structured manner in line with global best practice.

“Also, to spur productivity and job creation in the mining sector and facilitate value addition and promote the development of Nigeria’s solid mining resources in an environmentally friendly and sustainable way.

“The objective of the fund will be to attract investment capital into the sector and boost contribution of the sector to Nigeria’s economic growth.

“Also to help in harnessing Nigeria’s mining potentials toward achieving economic diversification and exports,’’ Fayemi.

In his response, the Managing Director of BoI, Mr Olukayode Pitan said the Bank was convinced that the fund would step up a rapid development in the mining sector.

Pitan said that fund would boost the operations of the miners just as a similar funding arrangement administered by the BoI boosted the country’s movie sector – Nollywood.

According to him, BoI is a pioneer in the area of funding mining activities where other banks are reluctant to invest.

He, however, said that the fund was not an aid but repayable loan by beneficiaries so that other miners would able to benefit from the fund.

“We will like to see in another one year most of those who are going to benefit from this scheme will have become so big that bank will be running after them to give them further support,’’ the official said.

Meanwhile, the Minister of State for Mines and Steel Development, Hon. Abubakar Bwari, would head the Project Management Committee, which would include 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.

Join The Conversation

What do you think?

This site uses Akismet to reduce spam. Learn how your comment data is processed.