To boost the capacity of artisanal and small-scale miners to participate in the development of the solid minerals sector, the Federal Government on Tuesday launched N5 billion Nigerian Artisanal and Small-Scale Miners, Financing Support Fund to grant loans at single digit interest rates.

The Fund, which is operated by the Federal Ministry of Mines and Steel Development in collaboration with the Bank of Industry, would be available for only certified artisanal small-scale miners, constituting more than 80 per cent of the operators in the industry.

Under the terms of the memorandum of understanding signed on Tuesday in Abuja, the government would contribute N2.5 billion of the Fund, which would be matched by another N2.5 billion by BOI.Qualified artisanal miners would be allowed to access between N100,000 and N10 million, while small-scale miner could get between N10 million and N100 million.

The Minister of Mines and Steel Development, Kayode Fayemi, and the Managing Director/CEO of Bank of Industry, Olukayode Pitan, signed the MOU in Abuja on Tuesday.

Mr. Fayemi said the launch of the Fund was to address the challenge of insufficient funding and poor access to capital, which posed a major factor militating against artisanal and small-scale miners who account for the bulk of activities in the mining sector.

The Minister said the BOI would serve as the custodian and manager of the fund, to be given to the artisanal and small scale miners at five per cent interest rate.

He said with the appointment of BOI as the custodian and manager of the Fund it would facilitate financing of artisanal and small scale mining projects involving industrial minerals, precious stones, precious metal (Gold), dimension stone and such other strategic minerals in Nigeria as would be approved by the ministry and BOI from time to time.

The Minister said the Fund would be available in the form of term loans, or working capital, to be utilized for the purchase of requisite items of plant and machinery; payment for drilling, geological and other services related to mining business as may be required, among others.

Besides, he said proper funding would help to integrate the artisanal and small-scale miners into the formal sector, enhance their growth and development in a structured manner, and spur productivity and job creation in the mining sector.

Other efforts by the ministry to address the challenge of insufficient funding and lack of access to capital, include N30 billion from the mining sector component of the Natural Resources Development Fund and the $150 million from the World Bank to support the Mineral Sector Support for Economic Diversification (MinDiver) programme.

“The Solid Minerals Development Fund, SMDF, is now spearheading the assembly of a $600 million investment fund for the sector, working with entities as the Nigerian Sovereign Investment Authority, NSIA, the Nigeria Stock Exchange, NSE and others,” the minister said.

He said these efforts were a departure from the past, where only N352 million was released to the ministry, out of the N1 billion allocated to it in 2015.

In addition to the funding support from multilateral agencies, partnerships on technical cooperation, Mr. Fayemi said several agreements were also brokered or re-activated with foreign governments.

These include existing technical partnerships with the governments of South Africa, China, Australia, Canada, the United Kingdom and the United States of America in line with the framework of Africa Mining Vision, to develop mining.

Mr. Pitan said the BOI was convinced the fund would step up a rapid development in the mining sector, just as a similar funding arrangement boosted the country’s movie sector.

He said BOI was a pioneer in the area of funding mining activities where other banks have shown reluctance to invest.

The project management committee made up of BOI officials with expertise in mining finance and project supervision, would be headed by the Minister of State for Mines and Steel Development, Abubakar Bawa Bwari.

The committee would be responsible for appraising, recommending, disbursing, implementing and monitoring projects as well as recovering loans and interests from the approved projects.