As part of determined moves to prop up the solid mineral sector as a viable means of foreign exchange earnings, The Ministry of Mines and Steel Development, in partnership with Bank of Industry recently launched a N5billion naira Artisanal and Small-scale Miners (ASM) Financing Support Fund.
According to the Minister of Mines and Steel Development, Dr. Kayode Fayemi, the intervention in ASM mining becomes necessary considering the fact that about 80 percent of miners are artisanal and small scale miners.
Fayemi said: “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”
“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 FMMSD and BOI from time to time,” he added.
Stating the purpose of the loan, the minister said “The Fund shall 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, Working Capital for purchase of materials/other expenses.”
According to the minister, the single obligor limit of loans to be granted under the Fund shall be from N100,000.00 to N10m for ASMs and from N10m to N100m for Small Scale Miners, adding that 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.
The Minister disclosed that the scheme is structured in a way that it would play a pivotal role in unleashing the huge economic potential in mining sector to achieve economic diversification. He added that it would integrate 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.
He also decried the issue of fund constraint, noting that it constitutes a major albatross which according to him, they have been taking concrete efforts to address.
“Of these challenges, Limited Access to Finance is one of the most fundamental, which together with other factors has stunted our growth potentials in the past, and if left unaddressed would undermine our aspirations.
“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, Fayemi said.
Advising the beneficiaries to make judicious use of the money, the Managing Director, Bank of Industry, Olukayode Pitan, urged them not to consider the fund as a grant or their idea of national cake, stating the money was meant to ensure the development of the sector.
Speaking on the development, the President Miners Association of Nigeria (MAN), Alhaji Sani Shehu commended the efforts of the government. He also noted that it was not a commercial fund but a development fund, adding that the association would work closely with the Bank to ensure only serious miners have access to the funds.
According to Shehu, with over 600 mining cooperatives, they would be working to ensure that they are formed into clusters to ensure equitable access.