Exclusive interview with Olayinka O. Mubarak, Group Head, Solid Minerals and Metals, Large Enterprises Directorate, Bank of Industry in Nigeria. At iPAD Nigeria in November, Ms Mubarak is a panellist during a discussion on “Available financial support for a growing industry”.
1) Let’s start with some background on your company and your main activities in the mining sector?
I work for Bank of Industry (BOI) in Nigeria. We are the foremost developmental Finance Institution in Nigeria and our mandate as a DFI is to support quality projects with high developmental impact such as job creation and poverty alleviation and import substitution.
Our main activities in the mining sector is to provide financial assistance for the establishment of large, medium and small projects as well as the expansion, diversification and modernisation of existing enterprises; and rehabilitation of existing ones.
The Bank is gearing efforts towards increasing its support to the solid minerals portfolio. Also, the Bank’s advocacy role include advising prospective investors in solid minerals, presentation of papers on solid minerals at seminars and workshops. As part of its advocacy role the Bank in August 2015 successfully hosted the maiden edition of the One-Day Solid Minerals Sensitization Forum.
2) Why invest in Nigerian mining?
Nigeria is located in a geologically proven province and is perhaps the last remaining frontier for mineral investment in the region. With wide occurrence of minerals and a history of mineral production, Nigeria presents a rare opportunity for serious investors and that opportunity is worth exploring.
3) Any specific projects that you are involved in that you are particularly excited about?
We have handled several exciting projects but the ones that readily come to mind are:
An integrated steel project with a projected cost of approximately US$1.25Bn in Kogi State, Nigeria. It is a project that involved the conversion of iron ore to steel, it will reduce the importation of steel, it will bring about a major impact in Industrialisation in Nigeria. It is also expected to generate a lot of employment generation and alleviate poverty. The company currently employs over 2,500 staff and are planning to create an additional 500 jobs. This project implementation is still at the preliminary stages.
We have also supported the production of iron billets and re-bars from scrap metals. The total investment in these projects was over US$25m. They projects are fully in operation and have created over 700 jobs.
In addition we supported a project that utilises iron billets as raw materials for the production of 5.5mm wire rods. This project cost approximately US$28.81m. This projects has also created over 300 jobs.
We have supported a company that has backwardly integrated into the mining of Limestone required for production of cement glue. They will be the first company in Nigeria to manufacture Cement Glue and when fully operational should employ at least 300 staff.
A recent project that we are considering will produce wire rods from scrap metals. They previously imported wire rods for their nail production. However, with the commencement of production of wire rods, this will save foreign exchange earnings and create about 400 additional jobs.
4) What in your view are the main challenges in the Nigerian mining sector?
Main challenges facing the solid minerals sector in Nigeria include but not limited to the following:
• Inadequate Geological and Bankable data
• Inadequate logistical support
• Informal mining activities
• Inadequate skilled labour
• Access to adequate funding
• Lack of Infrastructure
• High capital requirement
• High risk and health hazard
• Weak Government regulations
• Unwholesome practices of Stakeholders
5) You are part of a panel discussion at the upcoming iPAD Nigeria Mining Forum on financial support for the sector. What will be your main message?
The mining sector in Nigeria is at the developmental stages with lots of opportunities. We encourage interested and serious investors that are interested in this area to approach us for support. We provide support to this sector in various ways including:
• Financial and business support services to companies engaged in the extraction and processing of solid minerals resources
• We provide medium to long term funding at very competitive rates
• We organised seminars and conferences for prospects and existing miners
• Our emphasis is on prudent project selection and management.
6) How necessary is a gathering such as the iPAD Nigeria Mining Forum for the industry?
The gathering will afford investors, Government, the financial community and other stakeholders a forum to come together to discuss the Nigerian mining sector with a view for all stakeholder to get a better understanding of the opportunities and challenges involved in the development of the sector and to propose pathway towards improving the business climate for sustainable investment and growth for the sector.