Nigeria wants more from solid mineral deposits

Nigeria's mining sector is set to receive a boost as the government focuses on increasing local processing of solid minerals and cracking down on illegal mining activities. The Nigerian government has made it clear that new mining licenses will only be issued to companies with plans to process minerals within the country, offering incentives such as tax waivers to attract investors. Cyril Azobu, a partner and mining leader at PwC, provided insights on the progress made in the sector during a recent interview on CNBC Africa. Azobu highlighted the government's seven-point agenda for solid minerals development, which includes initiatives like setting up mining corporations, partnering with multinational companies, and establishing mineral processing centers across the region. He pointed out that efforts to address illegal mining have also been intensified, with the government setting up over 12,200 mines nationwide to tackle the issue. Collaboration between government agencies and state governments has been crucial in addressing security concerns surrounding the sector. Despite these positive developments, Azobu acknowledged that investor activity in the sector remains subdued due to cautious behavior in light of Nigeria's economic challenges. The impact of foreign exchange fluctuations, rising inflation, and high interest rates have made funding for mining explorations difficult to access. However, the Solid Minerals Development Fund, in partnership with the African Finance Corporation, has established a collaboration to provide financing for exploration projects. By presenting bankable business plans and feasibility studies, investors can reduce risks associated with exploration activities. Although there has been a lack of significant investor uptake due to economic uncertainties, Azobu expressed optimism about the sector's potential and the engagement with foreign and local investors to drive economic development in Nigeria. While challenges persist, the government's focus on local processing, crackdown on illegal mining, and efforts to attract investment signal a positive trajectory for the mining sector in Nigeria.