Steel ministry seeks bank funding for solid minerals

The Ministry of Mines and Steel Development has appealed to banks in Nigeria to fund the solid minerals sector with a view to boosting the national economy.

Obiora Azubike, Director of Artisanal and Small Scale Mining Department in the ministry, made the call while speaking to NAN on Sunday in Abuja.

He said commercial banks in South Africa, Canada and Australia were funding mining operations in those countries, adding that the bulk of their Gross Domestic Product (GDP) were derived from mining.

He noted that if banks could finance the mining sector in other countries, Nigerian banks should also participate in funding solid mineral sector in the country.

“In South Africa, banks are the key financiers of mining activities; even in Canada, they are supporting mining.

“But our banks are not funding mining sector, why,” he asked.

Azubike stressed the need to encourage banks to participate in developing the sector, saying that this would facilitate industrialisation, generate more jobs and additional revenue.

The director said that the World Bank, through its Sustainable Management of Mineral Resources Project, had trained bankers on ways to interprete the feasibility studies in the mining sector.

He said that during the training, series of meetings were held between some commercial banks, including the Nigeria-Export Import Bank, on the possibility of granting loans to miners.

Azubuike said the ministry initially felt that the banks did not understand the mining mechanisms.

He said it later became clear that the banks were only shying away from granting loans to miners because of the long gestation period of mining.

The director said that the ministry had invited bankers to its seminars and conferences to sensitise them on the need to extend credit facilities to miners.

“They said that if the same money is invested in other sectors, the returns on investment will be guaranteed and faster,” he said.

He, however, observed that if miners were given bank loans at their high interest rates, it would be quite difficult for the beneficiary miners to have a breakthrough.

“Banks should look at the mining sector and support its development because if the sector is properly developed, it will be in the interest of everybody,” he said.

The director commended the World Bank for its 120-million-dollar mining development grant, adding that artisanal and small-scale miners got 10 million dollars from the grant for their activities.

“The World Bank had actually committed money for the development of the mining sector. UNIDO is also doing something to assist the sector,” he said.

Azubike said that the Australian Government was also assisting the ministry in the training of its officers in new mining technologies.

While the Canadian government is presently sponsoring studies in some areas of the country’s mining sector via the World Bank.

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