CASH INJECTION Artisanal and small-scale miners will be able to apply for funding from the Federal Ministry of Mines and Steels Development and the Bank of Industry in Nigeria
The Nigerian Federal Ministry of Mines and Steel Development and the Bank of Industry have opened applications to the funding scheme for Nigerian artisanal and small-scale miners (ASM) in February.
In August 2017, the two entities signed a memorandum of understanding for the management of a N5-billion fund, the Nigerian Artisanal and Small-Scale Miners Financing and Support Fund, that will support local ASMs in the country.
The aim of the fund is to increase productivity and job creation by tapping into Nigeria’s mining potential in a way that brings about economic diversification, in an environment-friendly and sustainable manner.
Within the scheme, certified artisanal miners will be able to access loans between N100 000 and N10-million. Small-scale minerswill be able to access between N10-million and N100-million.
According to the Ministry, the fund “will play a catalytic role in unlocking funding to the ASM sector and will facilitate the integration of the ASM sector into the formal mining sector”. This integration is, in turn, projected to enhance the growth and development of the sector in a structured way – one that is in line with international best practice.
To make use of the fund, the artisanal miners need to be organised into cooperatives. They must also hold a small-scale mining lease or a quarry lease. Small-scale miners who are registered as businesses or limited liability companies may also apply, but they must also have a small-scale mining lease, quarry lease or a mining lease.
The loans will come with lowered interest rates of 5%/y, as opposed to the 21%/y lending rate of commercial banks, and a 0.5% processing fee. The money be available as a term loan, working capital or leasing facility and may only be used for purchasing machinery and plant items, or for payment for services related to mining business. Service payments will be subject to an audit of the operations to confirm the need for the services.
The fund will start at N5-billion and, as more beneficiaries make repayments, the fund is projected to grow. This will create additional room for new miners to benefit from the fund, according to the Ministry.