Mining financing key to Nigeria’s future — SMDF

Executive Secretary of the Solid Minerals Development Fund (SMDF), Hajiya Fatima Umaru Shinkafi, has said Nigeria can only unlock its estimated $700 billion mineral wealth if it builds a strong and credible mining finance system.

Speaking at the launch of the Ore Reserve Development Forum (ORDF) in Abuja, Shinkafi, who was represented by Dr Martina Ananaba, head of minerals and project development, said the sector is gaining momentum under reforms by the Minister of Solid Minerals Development, Dr Dele Alake, with mining’s contribution to GDP rising from less than 1% to 4.6%.

But she warned that despite Nigeria’s vast resources, many mining operations remain unbankable due to poor geological data, weak reporting standards, and artisanal practices.

“The real challenge is not lack of capital. The challenge is a lack of bankable projects,” she said.

Shinkafi explained that ORDF was created after industry experts agreed in 2024 that Nigeria needs consistent ore reserve reporting, stronger technical capacity, and clear financing pathways to attract investors.

She said SMDF is already derisking early-stage projects, enforcing strict due diligence, and working with capital-market institutions to prepare credible mining companies for investment.

Highlighting recent progress, she noted that 867 mining licences issued in Q1 2025 generated ₦7 billion, signalling renewed investor confidence.

She urged stakeholders to use the workshop to design a practical Mining Finance Framework that will set standards, guide miners, and help financiers properly assess risks.

“If we build the right financing system, mining can become a true pillar of economic diversification,” Shinkafi concluded.

Chairman of the Geological Society of Nigeria, Uba Saidu Malami, said Nigeria’s mineral wealth will only translate into national wealth when the country scientifically qualifies its resources to global standards

He added that mining financing largely comes from capital markets, not banks, making internationally certified reports critical for junior mining companies.

Malami also highlighted links between natural resources and insecurity, stressing the need to mitigate risks while ensuring Nigeria assigns real value to its gold, diamonds, and transition minerals through reliable exploration and reserve reporting.

Also speaking, Mining investment expert and Mont Capital executive, Jon O’Callaghan, said Nigeria could build a mining industry bigger than oil and gas within 25 years, but only if the country attracts risk capital into exploration, not just mining.

O’Callaghan said Nigeria already has the right policies in place and the Federal Government has “done its job” by creating an enabling environment.

According to him, the missing link is investor willingness to fund exploration, which is the foundation of every successful mining industry.

“It’s not about government anymore. Without exploration, there is no mining. And without risk capital, there is no exploration,” he said.

“There’s a lot of money to be made in exploration, and investors need to understand that.”

He noted that the sector’s biggest financing challenge is building a system that allows investors to participate confidently.

“To address this, he revealed that stakeholders are now working with the Nigerian Exchange (NGX) and the Securities and Exchange Commission (SEC) to replicate global mining investment models”

He said the aim is to mirror the operational standards of the world’s top mining exchanges, the Australian Stock Exchange, Toronto Stock Exchange, and London’s AIM, to attract exploration funding into Nigeria.

“All we are doing is creating the same environment that works elsewhere in the world, to enable investors to invest,” O’Callaghan said.

He appreciated the organisers of the ORDF event and reaffirmed that with proper funding at the exploration stage, Nigeria’s mineral sector could surpass oil and gas within a generation.

The Technical Adviser to the Executive Secretary of the Solid Minerals Development Fund, SMDF, Mr Abdulmajeed Amussah, said the partnership between the Fund and the Ore Reserve Development Forum, ORDF, is designed to de-risk mining assets and move Nigeria’s mineral sector from informal operations to bankable, investment-ready projects.

He explained that although Nigeria is richly endowed with shallow deposits that artisans can easily mine, most of the assets are not developed to a level where they can attract formal financing.

Amussah noted that through its mandate, the SMDF is working to provide strategic funding and technical support that converts mineral potential into shared prosperity.

According to Amussah, a recent funding window for early-stage exploration revealed major capacity gaps, as fewer than ten applications met the required standards, despite the thousands of licenses held across the country.

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