Nigeria needs credible mining finance system, SMDF warns

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The Executive Secretary of the Solid Minerals Development Fund, Fatima Shinkafi, has warned that Nigeria will continue to struggle to unlock its estimated $700bn mineral wealth unless it builds a credible, transparent and well-regulated mining finance system.

Shinkafi, who was represented by the Head of Minerals and Project Development at the Fund, Martina Ananaba, said that although the sector is gaining traction under the reforms of the Minister of Solid Minerals Development, Dele Alake, many mining assets remain unbankable because operators lack proper geological data, internationally compliant reporting standards and structured project development.

She spoke on Tuesday at the launch of the Ore Reserve Development Forum in Abuja, according to a statement issued by the SMDF spokesperson, Idowu Jokpeyibo.

Shinkafi noted that mining’s contribution to GDP has risen from less than 1 per cent to 4.6 per cent, but warned that “the real challenge is not lack of capital. The challenge is a lack of bankable projects.”

She explained that the Ore Reserve Development Forum was established after widespread industry consultations in 2024, where experts agreed that Nigeria must standardise its ore reserve reporting, strengthen technical capacity and build clearer financing pathways if it hopes to attract institutional investors.

According to her, the SMDF has already begun de-risking early-stage projects, enforcing strict due diligence and partnering with capital-market institutions to prepare credible mining companies for investment.

Highlighting the sector’s recent momentum, she disclosed that 867 mining licences issued in the first quarter of 2025 generated N7bn, reflecting renewed investor interest.

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

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

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

He noted that mining finance largely originates from capital markets, not commercial banks, making internationally certified geological reports vital for junior mining companies seeking funding.

Malami also linked resource governance to insecurity, stressing the need to assign real value to the country’s gold, diamonds and transition minerals through credible exploration and reserve reporting.

Mining investment expert and Mont Capital executive, Jon O’Callaghan, said Nigeria could develop a mining industry bigger than oil and gas within 25 years, but only if the country attracts sufficient risk capital into exploration.

According to him, the Federal Government has already “done its job” by putting the right policies and incentives in place.

“It’s not about government anymore. Without exploration, there is no mining. And without risk capital, there is no exploration. There’s a lot of money to be made in exploration, and investors need to understand that,” he said.

O’Callaghan revealed that stakeholders are working with the Nigerian Exchange and the Securities and Exchange Commission to replicate global mining investment models used in Australia, Canada and the UK in order to attract exploration funding.

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

“All we are doing is creating the same environment that works elsewhere in the world,” he added.

Also speaking, the Technical Adviser to the SMDF Executive Secretary, Abdulmajeed Amussah, said the partnership between the Fund and the Ore Reserve Development Forum aims to de-risk mining assets and transition Nigeria’s mineral sector from artisanal operations to bankable, investment-ready projects.

He said that although Nigeria is richly endowed with shallow, easy-to-mine deposits, many licences remain dormant because operators have not developed assets to a stage where formal financing is possible.

Amussah disclosed that a recent SMDF funding window for early-stage exploration exposed major capacity gaps, as fewer than 10 applications met the required standards despite thousands of licences issued nationwide.

Nigeria is estimated to hold more than 44 commercially viable minerals across 500 locations, a resource base worth up to $700bn.

However, decades of underfunding, artisanal mining, weak governance and poor geological information have limited the country’s ability to compete with global mining hubs such as Australia and Canada.

The Tinubu administration has introduced several reforms, including value-addition policies, a new security architecture, satellite monitoring and strengthened export guidelines.

A business, investment, infrastructure and property correspondent currently with The PUNCH, Aina is a media professional with over three years experience

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