Credible Mining Finance System Key to Unlocking $700bn Mineral Wealth — Shinkafi

Nigeria can only unlock its estimated 700-billion-dollar mineral wealth by establishing a strong and credible mining finance system.

This was stated by the Executive Secretary of the Solid Minerals Development Fund (SMDF), Mrs. Fatima Umaru Shinkafi, at the launch of the Ore Reserve Development Forum (ORDF) in Abuja.

Represented by the Head of Project Development, Dr. Martina Ananaba, Shinkafi noted that the sector has begun to gain momentum under reforms introduced by the Minister of Solid Minerals Development, Dr. Dele Alake, with mining’s contribution to the GDP rising from less than one percent to 4.6 percent.

She cautioned that despite Nigeria’s vast mineral deposits, many mining ventures remain unbankable due to inadequate geological data, weak reporting standards, and the prevalence of artisanal mining practices.

According to her, the major issue is not the absence of capital but the absence of bankable projects.

She explained that the ORDF was established based on a 2024 industry consensus that Nigeria needs consistent ore-reserve reporting, enhanced technical capacity, and clearer financing pathways to attract investors.

Shinkafi said the SMDF is already working to de-risk early-stage projects, enforce strict due diligence, and collaborate with capital-market institutions to prepare credible mining companies for investment.

She highlighted recent achievements such as the issuance of 867 mining licences in the first quarter of 2025, which generated seven billion naira in revenue—an indicator of renewed investor confidence.

Shinkafi urged stakeholders to use the workshop to develop a practical Mining Finance Framework that will set standards, guide operators, and help financiers properly assess project risks, stressing that a robust financing system can make mining a true pillar of Nigeria’s economic diversification.

In his remarks, the Chairman of the Ore Reserve Development Forum and President of the Geological Society of Nigeria, Uba Saidu Malami, said Nigeria’s mineral wealth will only translate into economic value when the country scientifically qualifies its resources to global standards.

He emphasized that mining finance is driven largely by capital markets rather than commercial banks, making internationally certified reserve reports essential, especially for junior mining companies.

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

Mining investment expert Jon O’Callaghan said Nigeria could build a mining industry larger than its oil and gas sector within 25 years if it successfully attracts risk capital into exploration, not just mining activities.

He noted that Nigeria already has sound policies and that government has “done its job” by creating an enabling environment.

According to him, the missing link is investor willingness to fund exploration, which forms the backbone of every successful mining industry. Without exploration, he said, there can be no mining; and without risk capital, exploration cannot take place.

O’Callaghan revealed that stakeholders are currently in discussions with the Nigerian Exchange and the Securities and Exchange Commission to replicate global mining investment models.

He said the objective is to mirror the operational standards of the Australian Stock Exchange, the Toronto Stock Exchange, and London’s AIM to attract exploration financing into Nigeria.

Also speaking, the Technical Adviser to the Executive Secretary of the SMDF, Mr. Abdulmajeed Amussah, said the partnership between SMDF and ORDF aims to de-risk mining assets and transition Nigeria’s mineral sector from informal operations to bankable, investment-ready projects.

He noted that although Nigeria is richly endowed with shallow deposits frequently exploited by artisanal miners, most assets are not developed to levels that qualify for formal financing.

Amussah added that a recent early-stage exploration funding window revealed major capacity gaps, as fewer than ten applications met the required standards despite the thousands of licences issued nationwide.

The Forum seeks to co-design a practical Mining Finance Framework that defines clear reporting standards, recommends appropriate financing instruments for each stage of project development, and creates an enabling policy environment for investors.